How Long Does an American Express Settlement Take?

If you’ve stopped paying on your account because you got laid off or were in an accident, it may be difficult to catch up on all of your bills. When you’re trying to eliminate your debt or experiencing financial hardship, an American Express settlement might be the right choice for you. This gives you an opportunity to negotiate a lump-sum payment for the remaining balance on your credit card.

American Express Settlement

The time it takes to close out an American Express settlement varies from customer to customer. It is one of the toughest companies to settle with, especially since you almost always have to work with an assigned collection agency. It would be a wise decision to enlist the assistance of an attorney specializing in debt collections.

American Express History

Settling with American Express is not like most credit card companies because prior to November 2008, it was not a bank holding company structure. It converted specifically to qualify for Treasury Department assistance under the Troubled Asset Relief Program (TARP). This program allowed the United States government to begin the bailout of U.S. banks in financial distress.

This is important because of the distinctions between the different methods of collection by creditors. American Express doesn’t sell off its accounts but does assign bad debt to attorneys and debt collectors. It doesn’t matter if the delinquent account is 20 years or 10 years. However, other major credit card banks have been known to sell their delinquent accounts to the highest bidder.

The other thing to keep in mind is American Express retains a list of account holders who have defaulted. They aggressively pursue delinquent accounts and it’s unlikely you will be able to get another credit card again after you have sought out a debt settlement.

As it stands, American Express has a few repayment programs that can help you get back on the right track if you are not behind yet or even if you’re a month late on your payments. It’s recommended that you speak with a representative who can explore your options before you dive into American Express settlement because once you move forward, you can’t go back.

Settling With American Express

American Express settlement typically requires a lump sum payment that is less than your current outstanding credit card balance. The payment is given in exchange for the company settling your debt. You might be able to pay your settlement over a six to twelve month period but a single payment will give you the best opportunity for significant savings.

There are a few things you’ll need to do before you settle your debt:

Stop payments – If you haven’t already, you will need to stop making payments on your account. Credit card companies will not settle with you if your account is current. Unfortunately, you need to wait for American Express to reach out to collect the delinquent debt. The silver lining is the longer you go without a payment, the better your odds they will accept your first offer.

Setting aside funds – You’re going to need to set aside a significant sum of money in order to pay off the American Express settlement. This could take you several months, depending on your current assets or how long it takes you to secure the funds. Some ways to gather enough money include selling your personal possessions, tax refund, or borrowing it.

Work out an agreement – Consult and work toward an agreement on your American Express settlement. This proposal should be a percentage of your total balance. The terms a debt collector for American Express agrees to will be contingent on the amount, financial situation, and your credit history. They don’t always accept the first offer. Be prepared.

Professional consult – Even though they don’t sell their debts, American Express still hires debt collection specialists to handle their delinquent accounts. Since you won’t be dealing with them directly, consider contacting a debt settlement attorney. An expert can either direct you or advocate on your behalf.

Negative Side of Settling

While this may seem like a quick fix to your overwhelming credit card debt, there are some negatives to settling:

  • Your current credit card accounts may end up closed, meaning you won’t be able to use them.
  • This is not the most ideal path if you plan to open another credit card in the future. Other credit card companies may view the debt settlement negatively.
  • You won’t be dealing with their internal collection department because American Express doesn’t have one.
  • It’s going to lower your credit score, lead to late fees, penalties, and debt collection calls.
  • Even though you should save money with a lump-sum payment, there is a chance you’ll wind up paying more money over time for interest and fees.

If your financial hardship is only temporary and you’ve not yet fallen behind on your payments, speak with an American Express customer service agent to explore the possibilities.

What if You Can’t Pay Right Now?

Even as you’re trying to settle your debts, don’t forget to be realistic about the amount you can afford to pay. Keep your current bills and additional expenses in mind. Paying off your American Express credit card is only a single piece of the financial pie.

If you examine your current cash flow and determine you won’t be able to follow through, reconsider the settlement. It’s better to be honest than to be disillusioned. If you miss a payment, then you lose credibility.

Settle Your Debt

If you’ve lost your income and have fallen behind on your credit card payments, a settlement might be your best option. Work with a debt counselor to evaluate your current financial situation. They will help you understand the pros and cons of an American Express settlement.

Not only that but by working with a financial expert, you receive the best advice and guidance to help you become debt free over a period of time. Additionally, learning healthier money habits prevents you from getting back into a bad debt situation, while allowing you to prepare a better future.

About Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

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