Accepted Answer

Thanks for the information.

 

First, you will get late notices. If you wish, you may be able to make an arrangement to pay the back due payments.

 

The next thing that American Express will do (after after 3 or 4 of months) is cancel your card. It will also contact the 3 major credit reporting companies.

 

Next, most likely, your account will be sent to a debt collector. Below is a link to the Florida Attorney General's Office on how to protect yourself from debt collectors.

 

http://www.myfloridalegal.com/85256CC5006DFCC3/0/7CD1EF6DD790C14685256CC900560BD6?Open&Highlight=2,debt,collector

 

Finally, if American Express still doesn't get their money, they will sue you for the debt. If that happens, MAKE SURE THAT YOU ANSWER THE COMPLAINT. If you don't, American Express can get a Default Judgment in the amount of the debt plus late fees and interest (which multiplies rapidly). Once American Express obtains a Judgment, they can collect on it by garnishing your wages. They can't touch your retirement or IRA.

 

However, if you answer the Complaint and you get in contact with the attorney, you may be able to settle the debt for much less than is owed. These days, especially if you go to court and meet with the lawyer, you may be able to settle the debt for sometimes 50% of what is owed. You really have to push for that. More often, the company will settle for about 75% of what is owed.

 

If you settle and a Judgment is entered, you still have to work out the payment arrangements. Usually, the attorneys will want a chunk up front and then xxx per month until paid in full. Interest will accrue at the statutory rate in Florida.

 

If, however, you want to settle, but can't make the payments that the lawyer wants, you can go to court and ask the judge to allow you to make payments in an amount that you can afford. If the payments are reasonable, the judge will accept your offer and enter an Order.

 

The alternative to this, if applicable, is to file bankruptcy (either Chapter 7 or 13). A credit card debt is considered an unsecured debt. That means that it will be totally discharged in a chapter 7 bankruptcy.

 

BE VERY CAUTIOUS of these debt settlement folks who are flooding the airwaves these days. They make it sound like they can settle the debt and you will get out of debt quickly. They also charge a fee. But, your credit is still tanked. It may take several years to pay the debt, and the result may be no different than you can do on your own. In fact, if you file bankruptcy, your credit is also tanked, but you can begin to build it again right away. With a debt settlement, your credit is tanked until the deb is paid in full.

 

In time, you may wish to contact an attorney who specializes in debtor/creditor law or bankruptcy for a consultation. Sometimes the initial consultation is free.

I hope that you find this information useful, and that you press the GREEN ACCEPT button so that I may be paid for my work and receive credit for answering your question. Positive feedback, although not required is always appreciated. Also, a BONUS is also not required but is greatly appreciated.

Legal Disclaimer: The answer provided herein is for informational purposes only and should not be considered legal advice. No claim is made that I am licensed to practice law in the state or jurisdiction where this information is being provided and you should always seek legal counsel admitted to practice in your local jurisdiction for representation and advice on any legal matter.

 

Expert:	xavierjd
Pos. Feedback:	97.4 %
Accepts:
Answered:	8/11/2009

Attorney

17 years experience in all aspects of criminal law, landlord tenant, family law and small claims