I lost a substantial % of my income for approximately 7 months. It will be restored in March 06. Amex, however is demanding payment in full, and wish to proceed to collection and possibly law suit. They say there's no room for leniency. I know I owe them money and have offered to pay a smaller amount for a couple months and pay the balance when my pay is restored. They said they would take the smaller amount and still sue. Any suggestions? RP

This is not true legal advice,

But normally all collection agency will threaten to sue, but if they are getting part of their money and it looks like they will, normally they won't but still can.

But they do also know that if they get a garnishment they can get somewhere between 25 percent to 50 percent of your pay. So you may wish to think about thaat when figuring how tight you can make your budget.

If they just won't settle, I would still try and pay what I could. Then if it goes to court, you can show you made a good faith effort.

Then ASAP pay them off.

That's right. You're dealing with an overzealous collector.

I can, say, though, that from my Credit Experience I do know that Amex's guidelines for whether to keep the account or send it to an agency are a bit more stringent.

It may be that they do forward it on, but collection agencies are generally not granted judgments against individuals who are making payments.

They know this - so rarely even try (when timely payments are being made).

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Debt Management