Credit Card Interest Rates
My wife had lost her job and my business has had the worst year it's had in a long time. Thankfully, we are getting back on our feet but we have left a wake of bad debt issues to clean up. We are doing everything we can to avoid bankruptcy and want to pay what we owe. About half the cards we had, have been sent to collections and 2 of them have been charged off. One of them is an Amex card, it has a $6000 balance and was referred to a collection agency. Most of the collection agencies we worked with have worked with us, they have given us a reasonable interest rate and a monthly payment we could handle. This one has not.
At first they told us our only option was to settle the debt, they would take $4000 and call it even. Since we didn't have that much we asked if we could setup a monthly payment plan and they said it was not possible, it was against Amex regulations. We said we would be willing to pay the full balance due if they would let us pay monthly and they said it wasn't allowed. Well, when we told them for the 4th time on the 4th call that we did not have $4000 to pay it off and had no chance of getting that much, he asked us why we wouldn't want to just setup a payment plan.
We started talking to him about that but he is insisting that they have to stick with Amex regulations even though the card is not with Amex anymore and we must pay it back at the interest rate we had with them. Since we were so far behind, the interest rate is 29.99%.
My question is, can a collection agency charge us that much interest? If we don't pay it off or come to an agreement, does the debt still accumulate interest as a chargeoff? In other words, would I be better off letting it go to the next step and then paying it off?