I can't pay my American Express bill in full, need advice!

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
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kap
 
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I can't pay my American Express bill in full, need advice!

Postby kap » Sun Nov 03, 2013 8:38 pm

Not sure that I am posting in the correct area but here is my problem.

Long story short I do a little automotive work off the books in my free time and was getting parts together for my next customer. I bought many non returnable items using my gold card.

The customer backed out at the last minute and now I'm stuck with the bill. And yes I know I should have seen the risks, but I screwed up and thought this would be a promising job.

I have been a member for a little over a year and just received a letter the other day that I have 14 days to repay in full or I will be turned over to collections.

This is simply not an option. I have paid off about $1000 of it however I still owe a little over $5000.

I am mainly worried they will see it as fraud as I have never charged more than $1500-$2500 a month on the card.

After talking with amex I feel like there is nothing I can do other than be turned over to a collections agency and deal with them since I can just not pay it back in the plans that amex has offered me. (about $1600 every 2 weeks)

And not that I would want it to come to this but I also do not really have any assets that I could sell to cover the debt either.

Any suggestions on how I can sort this out without getting into legal trouble?


MemberSince99
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Postby MemberSince99 » Mon Nov 04, 2013 2:42 pm

Take out a personal loan that you can pay back over time.

Sell the parts on eBay for whatever cash you can raise back for now. Use the money to pay on it.

In the future, either let them provide the parts or get it in writing that they will pay you and if they don't, turn THEM over to a collection agency (not really but be prepared to take them to court to enforce payment). Not preaching, just trying to let you know how not to get burned again.

Obi-dan
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Postby Obi-dan » Mon Nov 04, 2013 2:53 pm

I don't know the specific laws for NC but for the most part there is no real legal trouble. You may get taken to court and have a judgement filed against you but it's not like you will be thrown in jail. Plus they are taking the collection route so no legal proceedings in your immediate future. If you can't settle with AMEX and you can't avoid collection the next decision is to either settle with collectors (which should be more favorable than AMEX) or to ignore them and wait out the SOL and the 7 years on your report.

Best of luck.
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MemberSince99
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Postby MemberSince99 » Mon Nov 04, 2013 4:27 pm

I really have to kind of disagree here. No they can't throw you in jail for a debt, but they can get a judgement on you and if you don't cooperate in letting them at your assets and income, they can throw you in jail for that (contempt of court). As djrez pointed out they won't come beat down your door in the night and waterboard you screaming which cave is he hiding in schweinhund, but if you get pulled over there will be a warrant on you and off to jail you go. So in a round about way it is possible to get jailed for debt if you don't play ball with them.

Amex is a funny animal I think. Some it seems they turn over to an agency, Zwicker is one I saw used doing searches on the net about it, and others they keep in house. My debt they kept in house and never went to a third party that I know of (or the third party never contacted me to my knowledge).

It's always a risk they will come after you and no one can really predict when it will happen. It just depends on the agency, and how much they think they can get out of you and how close is it to the SOL (in your case it's a ways off no doubt). But I don't think I'd rest easy here as they can come after you at any time and serve you with a nice lawsuit.

As mentioned you can try to wait it out and see what happens maybe you can negotiate with them, but it's always treacherous water to be in.

My own personal experience with Amex was they never did a thing to me. When the SOL was about to run, they sent me one of their infamous letters saying how if I paid the debt, it would improve my credit with Amex and my credit score. I thought at the time that's ridiculous I stiffed you so I'm a scumbag, what does it make me if I pay you just above a scumbag? I assumed they wouldn't give me a card again so what did it really matter. Likewise it would have had no bearing on my credit score whatsoever unless of course they deleted it, but they weren't offering that. (That's one of the reasons they were sued last year was from their claim that paying these collections improves your credit score - simply paying them does not in any way affect it though it might look better on a manual review but the point is, it does nothing for your score....).

As far as being served, they can get a process server or a local sheriff depending on your state's laws. In my state, I had a very aggressive agency, named Wolpoff and Abramson at the time, hot on my tail. They attempted to have me served at a former address where I no longer lived and hadn't lived for years, simply guessing and hoping I might be there. I know because it was my mom's address - I had moved back in with my family after I lost my job after 9/11 which was a big part of triggering the eventual credit issues (along with me not knowing how the economy works, and being ignorant how dumb revolving debt is and other factors, so some of it was my ignorance and thus fault). She emailed me one night that a man had knocked on the door asking for me and when she told him I didn't live there (which was true) and asked what he wanted, he said he was a process server. I was like wow is that aggressive. I kept a careful eye on the CCAP system in my state after that looking to see if they somehow got around the service, but they didn't, and I had seen a lawyer, who advised me to wait until they served me then come see him and he'd negotiate with them for me, since in his words they don't have a suit until they serve you. Fortunately they never got me, but it freaked me out.

Anyway sorry to ramble hopefully some people find this interesting and useful. I don't advise living this way it's hell take it from me, I did it. I don't ever want to do it again I carry NO revolving debt, I simply won't do it. Hard to get in trouble that way.

Obi-dan
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Postby Obi-dan » Mon Nov 04, 2013 4:46 pm

Just to clarify, if you do get taken to court you certainly want to attend so as to not get found guilty in absentia. That could conceivably lead to a contempt of court warrant. If you go to court ad have the judgement filed you set up payments. The courts are usually very reasonable. I work for a non-profit as a financial coach and I have seen the courts setup payments for as little as $25 a month. Granted it is for the rest of your life but no debtors prison or anything.

There has been some info written about this. From what I can tell, there have been some issues in Ohio where people have been jailed but from what I have read it is more fines than unsecured debt that is leading to contempt warrants for ignoring a judgement.

My point was don't panic, deal with whomever you have to deal with, it will more than likely be a collection agency.

And like you Member, I find this stuff interesting. I am by no means an expert and many here know a lot more than I and I am certainly not giving legal advice, just my two cents.
Cards:
Chase Sapphire Preferred
Marriott Rewards
Citi Hilton
Barclay Arrival
AMEX BCE (member since 95)
Chase Freedom
Discover It
Wells Fargo Platinum
Barclaycard (Apple)
Local Credit Union Visa (buy local!)


FICO Scores:
TU: 824 (Aug 2014)
Experian: 789 (Aug 2014)
Equifax: 807 (Aug 2014)

CC Deville
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Postby CC Deville » Mon Nov 04, 2013 5:45 pm

Call them and ask if you qualify for the Pay Over Time feature. Most of the charge cards have this option for some purchases.

Your next option is to do a balance transfer of the balance on one or more of you Visa or MasterCard accounts. Do not open a new Visa/MasterCard/Discover now to try to do a quick balance transfer as sometimes it can take weeks for the transfer to go through (this is especially true with Chase).

Other than that...as MemberSince99 said, you could try to get a personal loan from your local bank or credit union to pay off that balance.

And not to beat you while you are down...but lesson learned. You should look into getting a business credit card so that this does not happen again.

MemberSince99
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Postby MemberSince99 » Mon Nov 04, 2013 10:17 pm

I would be willing to bet that they will not go for the Pay Over Time feature at this point. They offer that to people they think are in good financial shape and can pay them back fairly quickly. I've read accounts of people falling behind and Amex takes the feature away. So to ask for it when you can't pay them in full, is very unlikely to work. It sounds like they just flat out want to get paid at this point. And it would not shock me even if the card gets paid in full if they do some AA on the account when it's all said and done. The relationship from a business standpoint seems damaged at the moment, and if he can pay them off in a few years I'm sure he can get back in pretty easily, but for now, knowing Amex, they are just looking to get paid and then it's very possible they will shut him down for a bit.

whit
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Postby whit » Tue Nov 05, 2013 9:02 am

see if you could apply for a slate card from chase, hopefully Amex hasn't placed anything on your reports yet

get that approved so you can balance transfer the bulk without fees within first sixty days

then pay that off within 15 months.

if you can't get approved for the cc, I would highly suggest going to a family member like mom, dad, siblings before going to personal pay day loans

if you can't do either, can't recoup your losses via eBay as member suggested then you're SOL (not statute of limitations) and will have to take the hit

it's not a pretty hit either but it will be lesson learned for any future off the books deal (you still can get $$ up front for the parts so at least if they change their mind it's their money that's stuck)

also maybe a contract just so you can recoup lost time spent too

whit
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Postby whit » Tue Nov 05, 2013 9:07 am

also credit unions do personal unsecured loans still, so it may be worth it to
go there if you want to pay off in time with interest

kap
 
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Joined: Sun Nov 03, 2013 8:17 pm
Location: NC

Postby kap » Tue Nov 05, 2013 12:52 pm

Thanks for the advice. I have a friend who went through something similar about 5 years ago. He just ignored the collections agency for the 7 years or whatever the SoL is. But he also owed about 5x as much as I do and he recommends not doing what he did just because it was a miserable 7 years for him.

I have looked at getting a personal loan to cover it, but my credit score right now is only about 650+- so I'm not sure what I would be able to get.

As far as family goes they are fairly tight with money and a loan from them is not likely. I have a brother who would probably loan it to me but I'm sure he would want me to pay him back almost twice as much.

I will look into doing a balance transfer on my discover card but that would still only cover about $2000



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