topic Re: PFD letter for $26K AMEX Charge Off in General Credit Topics

PFD letter for $26K AMEX Charge Off

Anonymous — Tue, 04 Sep 2007 20:48:20 GMT

I have a $26K American Express charge off that has been with a CA for almost two years now. Last payment was made to AMEX in Nov/Dec 06. I live in CA and the SOL is 4 years so I would be at the half way mark of this timeframe around Dec 07/Jan 08. The CA contacted me by letter about it 3 weeks ago to offer an unspecified less-than-full settlement amount. Other than that letter I only hear from them every 3-4 months. I have a few questions:

1) If I do a PFD letter to AMEX how much of the $26K should I offer?

2) Will sending the PFD renew their interest in pursuing collections effects/judgements against me? How would they know if I would be worth suing? I have no substantial personal assets other than a $22K 401K and an old paid off car worth less than $4000. I have no mortgage

3) Has anyone had any luck with such a large PFD with AMEX?

My husband and I want to buy our first home but know that this charge off is our only obstacle. Any advice to help me remove this charge off is greatly appreciated. Thanks for responding!

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Tue, 04 Sep 2007 21:00:10 GMT

Do you have the means to pay the debt or at least 50% of it now? I usually start at 50% but the older the collection the lower the % I offer. So for your 2 yr old collection I would offer 50%. Now if it's with a CA you would be getting ONLY a removal of the CA TL not of the AMEX TL.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Tue, 04 Sep 2007 21:12:08 GMT

The charge off is with their in-house CA - NCO Financial somewhere in New England. It's still reported as AMEX on my CRs not as NCO Financial. When they first took over the account in Feb 06 a rep called me to offer a $15K settlement amount which of course I couldn't afford. If they offered to take a little more than half would it be reasonable to offer $10K now?

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Tue, 04 Sep 2007 22:09:17 GMT

Your offer would be much more likely to be accepted if you were going to make the payment all at once.

Re: PFD letter for $26K AMEX Charge Off

CreditDrama85 — Tue, 04 Sep 2007 22:23:35 GMT

HA, sending any kind of letter will raise a red flag and renew their interest. i tried this with amex and got a letter next week from an attorney saying basically i had 60 days to pay the remaining balance or be sued. good luck. i will never carry an amex card again. they suck. i am so glad i opened accts that are in good standing with reputable banks (wells fargo, cap 1, and discover). amex simply wasnt there when i needed them.

also, i have seen several posts on this site about amex demanding irs info/taxes from cardholder and their accounts being suspended/frozen until the request is met. that is insane. get out before its too late.

Re: PFD letter for $26K AMEX Charge Off

scorepower — Tue, 04 Sep 2007 22:57:12 GMT

In california they can garnish wages, etc, especially with AMEX. I had a similiar situation where i owed them $2K. They told me i had to pay otherwise they can garnish and take any means necessary to collect their money. I was young and scared of the action they could take so i paid. I'am in excellant standing with them now. I'm surprised with $26K, they haven't pursued this more aggressively. I would be cautious to send red flags to them.

Re: PFD letter for $26K AMEX Charge Off

Takunda1 — Tue, 04 Sep 2007 23:38:39 GMT

As far as I know AMEX does not do PFD's. Depending on what your scores are you may still be able to get your first home but I bet your lender will insist you pay amex off first or they'll include it somewhere or somehow into your mortgage.

The truth is no company is going to let 26K just fall of because of SOL, if they haven't come now they will come. I strongly suggest a payment plan that terminates all interest and fees until you r agreed upon settlement is reached. Some companies do a 5yr monthly payment plan, I would recommend that.

Good Luck.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Wed, 05 Sep 2007 04:09:36 GMT

The reason it went to charge off status is because I tried to proactively use a credit counseling service. I signed up in Dec 05 b/c the monthly payments of $2500 were killing me. But instead of agreeing to a payment plan AMEX said NO. It seemed they rather it become a charge off then agree to accept the proposed $500-$600 dollars a month through the counseling service. It wasn't my intention to let it become delinquent. Prior to that I had scores between 675-690. AMEX didn't seem willing to work with me even though I wanted to pay them.

I was under the impression that I wouldn't be able to get a mortgage without taking care of this first. Has anyone had experience with a mortgage company that would work with borrowers in my situation??? If so whooo??

Re: PFD letter for $26K AMEX Charge Off

Platinum25 — Wed, 05 Sep 2007 12:34:52 GMT

I doubt any mortgage company will give you a loan with an outstanding CO that is 26K. That looks like to them, on paper at least, that you cannot satisfy your credit accounts and they will either deny you a loan altogether or give you an interest rate so high you'd be a fool to take the loan. Work with AMEX or the CA to get a settlement worked out. As of now I wouldn't even worry about a PFD. If you're looking to buy a house I'd be more concerned with at least showing a PAID status on your CR rather than OPEN.

On the other hand, I don't understand why people keep knocking AMEX. All they are doing is trying to get money that is due to them. Maybe they are pursuing more aggresively then they should be but 26K is a lot of money. I'm sure if someone owed you (not directing this at anyone in general) that kind of money you wouldn't be taking to it very lightly. Maybe they don't work with consumers as easily as other creditors do but AMEX has always had that image of being "better" than everyone else. But to get pissed off at them for making sure you didn't lie on your application (to protect their interest in the credit they extend) or for pursuing an outstanding debt owed to them is unfair. Do I agree 100% with the F/R process?? Not entirely. If they want to do it they should do it right in the beginning or within the first year. I've had them for 2 years now and have had multiple CLI's with no F/R. I guess I'm just one of the lucky ones...for now.

Re: PFD letter for $26K AMEX Charge Off

autofly — Wed, 05 Sep 2007 18:08:23 GMT

ChiTownTimmay wrote:

On the other hand, I don't understand why people keep knocking AMEX. All they are doing is trying to get money that is due to them. Maybe they are pursuing more aggresively then they should be but 26K is a lot of money. I'm sure if someone owed you (not directing this at anyone in general) that kind of money you wouldn't be taking to it very lightly.

But to get pissed off at them for making sure you didn't lie on your application (to protect their interest in the credit they extend) or for pursuing an outstanding debt owed to them is unfair.

AMEN!

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Wed, 05 Sep 2007 21:38:32 GMT

autofly wrote:

ChiTownTimmay wrote:

On the other hand, I don't understand why people keep knocking AMEX. All they are doing is trying to get money that is due to them. Maybe they are pursuing more aggresively then they should be but 26K is a lot of money. I'm sure if someone owed you (not directing this at anyone in general) that kind of money you wouldn't be taking to it very lightly.

But to get pissed off at them for making sure you didn't lie on your application (to protect their interest in the credit they extend) or for pursuing an outstanding debt owed to them is unfair.

AMEN!

I have had nothing but good things to say about Amex. I too, think they are a little on the "tight" side- but again, at some of the CLI you can get up too- I don't see what the problem is. Now freezing your card on a business trip is bad though but I have only heard of that from one person. As far as financial review- I think if more CC cos would do it we wouldn't have people get into trouble like some of us did.

Re: the PFD or etc- I would tread lightly on this. I would talk to the loan officer and find out what they want. Of course- they are going to want to see it is PAID. Therefore, before I would EVEN begin to sniff in their direction- I would be ready to PIF before you talk to them (or at least three lump sum payments) I would definitly be ready to do a PFD- but again, be ready to PIF before you even talk to them.

this one is a tricky situation. Wait some more for some of the mods to answer you.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Wed, 05 Sep 2007 22:02:53 GMT

I actually liked AMEX until the whole counseling service issue. They refused to deal with me after I enlisted the counseling services help (not that they actually helped me). It's not that I didn't want to pay them. Believe me I had and still have all intentions of settling the debt but they didn't want to work with me on payments and then the CA started calling demanding PIF. I was in the middle of planning my wedding and couldn't fork over $26K.

I also have this posted in the CC forum and now I'm getting conflicting answers. Some people are saying I still could get a mortgage since they got 100% a year after foreclosing, BK and so forth. So now I'm confused. Can I apply for a mortgage with this charge off looming over me? Will companies still work with me since my parents will be gifting 20% down payment to us? Does anyone had a similar experience with such a large outstanding debt when apply for a mortgage??

Re: PFD letter for $26K AMEX Charge Off

sl — Wed, 05 Sep 2007 22:47:24 GMT

Things have changed since this, however, we we bought our house 10 years ago we had about $10K credit card debt with income of $80k. To qualify for the note, we had to pay the 10k down and write a letter for the two lates that were on our report.

With today's market, I can't venture but if you did get approved it would most likely be with a subprime lender.

Good luck and keep us posted.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Wed, 05 Sep 2007 23:13:15 GMT

A decent lender is going to be concerned. Also- 100 % financing is being frozen right now. The big thing is- you have a collect- not just a reg. debt that is 26K. I can't imigine any reputuable and good for you lender that is going to let you finance and walk out of closing still w/ a 26K delinquency. If they did- I would tell you to run- because the lender is not looking out for you and is probably a junk lender.

IMHO- I would make sure that you have everything in order. 6 mos savings. A minimum of a 10% down payment. All CC's PIF and utils under 7%. Any baddies that you can get rid off, PFD or GW do it. Then- sigh- if you are ready after that- get ready to settle a PFD w/ Amex for 50% in a one, two or three time payment. They are going to balk at doing it- but you never know till you try. The reason that I suggest it in this order- is that you will be in prime negotating postion esp. w/ your 10% down ready and credit all spruced up.

Again- I would not even sneeze their way until you know what you want to do. Reason is- it is a large sum. It will be ok however- you will figure it out.

I am going to quit posting till the mods answer you. They will have the best answers.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Wed, 05 Sep 2007 23:15:56 GMT

Also- a lot of mainstream lenders will not let a parent "GIFT" money to you. I think some programs do- but up to 10% and it has to be heavily documented saying that it is a gift and never will have to repaid back from them.

Re: PFD letter for $26K AMEX Charge Off

sl — Thu, 06 Sep 2007 12:55:34 GMT

I would aso try calling AMEX Executive Offices and speak with an Executive Assistant. I did that and had wonderful results. I had a dmp account with them showing as 120 days due and they would not budge even when it was paid in full. They worked with me and I got the TL deleted. PM me and I will give you the name and phone number of my contact. Sometimes you need to go to the highest level to get thing accomplished.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Thu, 06 Sep 2007 13:09:29 GMT

Would be 1/2 way
You reset the SOL when you made a payment.
You really need to work this out before dealing anything with a home purchase-
They will sue you if you don't.

"Last payment was made to AMEX in Nov/Dec 06. I live in CA and the SOL is 4 years so I would be at the half way mark of this timeframe around Dec 07/Jan 08.:

Re: PFD letter for $26K AMEX Charge Off

sl — Thu, 06 Sep 2007 13:14:31 GMT

True by making a payment you restart the SOL, however, my biggest concern on this one is the amount owed. The OP has a good chance of being sued by AMEX for this amount and a judgement slapped on her. That is why I say to work with them and see what they can work out.

Re: PFD letter for $26K AMEX Charge Off

Anonymous — Thu, 06 Sep 2007 15:56:48 GMT

How will paying it off now affect my FICOs? I just pulled my Exp one yesterday and it was 622. Also if I make a few large payments will they want the account PIF or do I have a chance of negotiating paying only a percentage of the $26K? AMEX has tacked on about $4K in interest since the account defaulted. Do I need to pay that too? My CR says $17K of the balance is past due.

Also, I have a 401K with about $24K in it. I know I shouldn't but would cashing it out (in spite of the penalties) to pay this off make sense?

Re: PFD letter for $26K AMEX Charge Off

sl — Thu, 06 Sep 2007 16:06:11 GMT

At this point, I would not be worried about my fico. I would be more concerned about a judgement against me. They want their money but do not want to take you to court if at all possible, because of time and the extra burden on them.

Most companies will work with you even you keep your payments on track and they are not just a small amount.