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  1. #1
    Join Date
    Oct 2007
    Posts
    7

    Default 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?

  2. #2
    Join Date
    Jul 2006
    Location
    Ohio
    Posts
    1,126

    Default Re: Interest Rates

    Quote Quoting Strider
    View Post
    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?
    Yes, they can. Refer back to the paperwork that you received, with the itty bitty writing on it, when you received the card in the mail.

  3. #3
    Join Date
    Oct 2007
    Posts
    7

    Default Re: Interest Rates

    Does the same hold true if it goes to chargeoff? Does interest acrrue while it is in chargeoff? IN other words, if I wait 3 months and then start paying it off would I be in better shape in terms of payment terms?

  4. #4
    Join Date
    Jul 2006
    Location
    Ohio
    Posts
    1,126

    Default Re: Interest Rates

    Quote Quoting Strider
    View Post
    Does the same hold true if it goes to chargeoff? Does interest acrrue while it is in chargeoff? IN other words, if I wait 3 months and then start paying it off would I be in better shape in terms of payment terms?
    Chargeoff has nothing to do with you. It simply is a notation on your credit report, which explains how they've accounted for the debt in their own accounting system. It doesn't mean that you don't owe the debt or the interest.

  5. #5
    Join Date
    Oct 2007
    Posts
    7

    Default Re: Interest Rates

    Okay, thanks for the clarification.

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