AMEX wants me to settle!

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AMEXAT19
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AMEX wants me to settle!

Postby AMEXAT19 » Tue Mar 17, 2015 10:07 am

Hey guys, been a long time since I've posted in the form. I received my first AMEX (Green) when I was 19. Over the years had upgraded all the way to Platinum, now I'm 22 and filed BK 13 was dismissed now AMEX wants me to settle with First Source Advantage for half the balance. It's not in my best interest I feel to settle due to the 1099C and not sure how it would affect me. Furthermore, I do not wish to not settle because I want to regain membership someday. My ultimate goal would be to pay the balance in full and regain membership. What are y'all's thought?


luvbullmarkets
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Postby luvbullmarkets » Tue Mar 17, 2015 12:31 pm

Your best solution would be to pay the balance if full. Or at least pay the most you could afford at this moment and request for some sort of installment plan to pay off the balance in full. Charge offs also have an adverse effect on your credit report and stay on the report for several years. A charge off also will increase your tax liability since a 1099 will be issued. The charge off is considered miscellaneous income and is generally taxed at one of the higher income rates.
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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Mar 17, 2015 5:11 pm

I'm a bit puzzled here. Did Amex sell your Amex debt to First Source Advantage? Or FSA holds a different debt? Or Amex wants you to pay them in full satisfaction, but to only partially pay other old debts?

I know it's not unusual for Amex to 'strongly suggest' that a customer who has just gotten off the blacklist pay off very old debt Amex still keeps track of.
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AMEXAT19
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Postby AMEXAT19 » Tue Mar 17, 2015 9:34 pm

Luvbullmarkets, I could simply pay the full balance of roughly $2500 but I feel like I should get something for my money such as regaining membership and plus I lost a lot of MR point (23,000) so lots of sky miles. I could careless if they charge it off in my opinion if they aren't will to work with me in my terms because it's going to take 7-10 years for the BKbto fall off and the charge off can just take that time to.

CarefulBuilder14, AMEX sold my debt to FSA, originally I settled with FSA for less than half and then decided not to proceed, months later AMEX started sending me letters to settle through FSA exactly half of the amount in 12 installments

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CarefulBuilder14
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Postby CarefulBuilder14 » Tue Mar 17, 2015 11:50 pm

AMEXAT19 wrote:Luvbullmarkets, I could simply pay the full balance of roughly $2500 but I feel like I should get something for my money such as regaining membership and plus I lost a lot of MR point (23,000) so lots of sky miles. I could careless if they charge it off in my opinion if they aren't will to work with me in my terms because it's going to take 7-10 years for the BKbto fall off and the charge off can just take that time to.

CarefulBuilder14, AMEX sold my debt to FSA, originally I settled with FSA for less than half and then decided not to proceed, months later AMEX started sending me letters to settle through FSA exactly half of the amount in 12 installments


I would not expect a simple arrangement of "full payment in exchange for immediate readmission" to appeal to Amex. It is true that Amex will probably give you a card sometime in the future, since $2500 is a relatively small sum, but you could quite possibly end up waiting a decade or longer. Anecdotally, the lifetime bans seem to be reserved for much larger losses. The ban might be shorter if you pay something or everything now.

If they give you a card in the future, they may ask you to pay the old balance. They may not explicitly say that you need to pay the old debt if you want to have an account with them, but I've gotten the impression that it's "protection money" from having your account closed for no good reason in the future. I'm not exactly sure how accurate an impression that is, and would appreciate the experience of others.

If you want to have a card with them in the future, I'd pay in full now. The income tax due shouldn't be too onerous, though, if some of the debt is forgiven. The debt might not meet one of the requirements to exclude it from your income, but it's just ordinary income and there's no separate IRS penalty. So the taxes should be a lesser consideration.

There are no guarantees, but I expect Amex will look more favorably on you in the future if you pay now, rather than withholding all payment from them until they are willing to readmit you. Paying what you can says you're trying to be financially responsible. Trying to force Amex to give up something (instantly readmitting you) suggests less responsibility and more risk for them. After all, you have a recent bankruptcy and already departed from the original FSA settlement to which you agreed.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

AMEXAT19
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Postby AMEXAT19 » Wed Mar 18, 2015 5:11 am

CarefulBuilder14, thanks for that information I will carefully plan my next course of action. It irritates me because I don't consider myself a risk as if they would look at my past payment history I never missed a payment and plus the amount of changes I used to spend on the card, on year I spent over $30,000 and they gave me points for that. Also they irritate me because is also detailed on a card with BOA to the tune of $16,000 and personal loan with NFCU and they have yet to breathe a word, so I'm like AMEX chill like the others.

takeshi
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Postby takeshi » Wed Mar 18, 2015 8:48 am

AMEXAT19 wrote:CarefulBuilder14, thanks for that information I will carefully plan my next course of action. It irritates me because I don't consider myself a risk as if they would look at my past payment history I never missed a payment and plus the amount of changes I used to spend on the card, on year I spent over $30,000 and they gave me points for that.

None of that really matters when you have derogs and/or a BK. Your payment history is shot even with the positives as they're significantly outweighed by the negatives. How much you spent is also irrelevant.

That's precisely why the first piece of advice to those looking to rebuild is "address your derogs". They tend to have a major impact and will hold you back. AmEx isn't the source of your irritation. I've been through BK myself and it is a long, slow process but you can't blame the creditors.

AMEXAT19 wrote:Also they irritate me because is also detailed on a card with BOA to the tune of $16,000 and personal loan with NFCU and they have yet to breathe a word, so I'm like AMEX chill like the others.

Debt is debt. You may not like them taking action to collect but it's within their rights to do so regardless of what other creditors may or may not have done. Again, your irritation is misdirected.

AMEXAT19
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Postby AMEXAT19 » Wed Mar 18, 2015 9:52 am

Takeshi, thanks for that information I understand I was me who caused this, but info look back everyday and say if I simply paid late and struggled to continue to pay the minimums I wouldn't be in this situation. I only filed BK out of fear because I really didn't know what to do knowing that I never missed a payment in my life.

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CarefulBuilder14
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Postby CarefulBuilder14 » Wed Mar 18, 2015 1:15 pm

AMEXAT19 wrote:Takeshi, thanks for that information I understand I was me who caused this, but info look back everyday and say if I simply paid late and struggled to continue to pay the minimums I wouldn't be in this situation. I only filed BK out of fear because I really didn't know what to do knowing that I never missed a payment in my life.


Wasn't the bankruptcy judge a little more forceful about debtor education? I can understand the attorney just wanting a quick fee, but how much debt did you have to get approved for Ch 13? Was credit counseling not a requirement? I'm just surprised that at no stage did anyone point out to you that your debts didn't require bankruptcy.

To go from $30k annual spending on one card to bankruptcy, only owing Amex $2500 seems hard to comprehend. Were your balances on other cards much higher?

And even if you had no history with Amex, it might be hard to get credit with them this recently after a bankruptcy. Add in the $2500, and your best bet is really to address your derogs, as takeshi said.

And I'm not sure exactly what you mean about NFCU and the $16k with BofA being 'chill'. Do you mean they have given you post-BK credit? Did you burn them pre-BK? Or you got to keep the cash rewards on them?
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

luvbullmarkets
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Postby luvbullmarkets » Wed Mar 18, 2015 4:58 pm

AMEXAT19 wrote:Luvbullmarkets, I could simply pay the full balance of roughly $2500 but I feel like I should get something for my money such as regaining membership and plus I lost a lot of MR point (23,000) so lots of sky miles. I could careless if they charge it off in my opinion if they aren't will to work with me in my terms because it's going to take 7-10 years for the BKbto fall off and the charge off can just take that time to.


You seem overly concerned with the MR points. Since you missed a payment AMEX has the right to close your MR points account. This is explained in your cardholder agreement.

It is in your best interest to pay the $2500 balance in full. To prevent anything derogatory being placed on your credit reports for 7-10 years. No amount of MR points is worth damaging your credit.
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