Quick Answer: When a business fails and causes AmEx default, the cardholder faces collection efforts that may include attorney fees and settlement offers, but negotiation remains possible. The contractor should contact AmEx directly to verify if they still own the $6,000 debt before agreeing to any settlement terms with the law firm.
“Dear Steve,
i’m a contractor that used my amex c.c. for business. work is dead and i defaulted on paying the balance.
I am asked to sign an agreement from a law firm and pay 2,000 up front on a 6,000. balance and they are adding about 800.00 in court apperance fees,though we havn’t gone to court. I can’t afford the payments at this time what are my options please.
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
In the latest issue (Sep 11): You drive to the dealership to pick up the car. There is no car. There was never a car.
I write Your Money Actually most weekdays — actionable money information you will not find anywhere else, and the small decisions that compound. It is free, I sell nothing, and I take no money from any company I write about.
John”
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Dear John,
Traditionally American Express has been difficult to work with but like many other things in life, a compromise can only be worked out through negotiation.
It’s not unusual that since the account has been sent out to an outside agency or law firm that they are adding some fees to it.
The unknown right now is if the law firm is acting on behalf of American Express or AMEX charged off the debt and sold it to a debt buyer and the law firm is acting on behalf of them.
That could be easily clarified if you call American Express. If they still owned the account then you could attempt to negotiate something with them and attempt to reduce or eliminate the extra charge. But, don’t be surprised if they are not interested in doing that.
Now, all that being said, it sounds like the real issue is that some level of payment is just not feasible for you right now. Making a promise to pay and then not being able to make it will land you in a worse spot.
After paying all your other expenses and including saving $100 a month, how much do you feel you have available on a monthly basis to pay towards the AMEX debt?
Please post your responses and follow-up messages to me on this in the comments section below.
Dealing With Debt? Understanding your options is the first step. See how all your debt relief options compare — including ones most sites won’t tell you about. The Find Your Path quiz gives a recommendation based on your actual numbers, and the Scam-O-Meter checks any company’s complaint history before you sign. Federal Reserve research shows bankruptcy filers recover faster than those who don’t file.
So – Is it bad to have an AMEX credit card?
What does bad mean in this context?