The advice I gleaned from this forum was so helpful I wanted to share my successful outcome.
I stopped paying my Amex about 18 months ago because of major business problems. After interest and charges I ended 2012 owing Amex almost 50K. I called them every few weeks and had told them I was trying to work things out and they offered payment plans and such, but mostly the minimum payment was in the 10K range which wasn’t even a slight possibility. At that point I started reading online after considering bankruptcy and other options.
Eventually I started reading on this forum and started to think about debt settlement and other options. So my unpaid Amex went thru I think 3 different collection agencies. The first two were fairly rapid maybe the first was after four months of non-payment , then the next after another couple of months. I would call them once a month or so and tell them I couldn’t pay. They called a few times a day at the beginning and then less so. They’d stop for a couple of weeks after I called them. They also called my business partner a few times and my parents once. Not really much of a problem.
After further reading on this forum, I started in a version of the “scorched earth” policy.
About a year ago I just stopped all communication. My debt went back to Amex and then to a third collection agency and I never spoke to anyone for the last part of 2013 and the first half of 2014. Amex never sold the debt and every so often I would receive letters to settle for 60% with two years of payments. This was probably offered for almost a year. Maybe 4 months ago I received a settlement letter for 40% over two years. Then 2 months later a letter offering 30% to be paid over two years.
A month after receiving that offer, I borrowed some money to try to settle. The debt was back with Amex and I think I was calling a center in India. I offered about 15% as that was about all I had and then offered a bit more.
They immediately said they could only settle for 20% and they stuck with that.
They offered me a month to come up with the 20% and I decided to accept. I came up with the 20% and settled. It seemed a fair outcome and was a relief. And was sort of an anti-climax as it was a short easy discussion. They sent me a settlement letter saying debt was settled and they will cease collection activity.
This worked for me as I didn’t have the money to settle til recently. I have a feeling letting time pass only improved my bargaining power ( and I’m sure the “scorched earth” showed them I was not intimidated). It was sort of empowering as I had always paid all my bills on time. In fact in the 20 years I’d had Amex card I don’t think I was ever late. Once I didn’t have the money and accepted that and told Amex it became easier and I mostly stopped worrying about it. I was always polite and cordial, and everyone I talked to was professional to me. I actually feel great about the whole process.
So the advice I got from this forum , for what it’s worth, is if you’re trying debt settlement take your time, be polite but firmly resolved. Realize time is on your side and be patient. Don’t talk to collection people very often and when you do simply state you can’t pay and not much else. And for me settling for what was affordable was a great relief. Maybe I could have waited and settled for less but I feel it all worked out fine. There’s lot of great advice on this forum so do lots of reading. Most important to me was to realize my financial failings were just a series of mistakes and happenstance and not to feel embarrassed or miserable about them. Also do it yourself as learning to deal with your messes provides great life lessons.