Amex and Firstsource Advantage

I've had an American Express account since 2004. I had a gold charge which I daftly canceled because I didn't want to pay the modest annual fee. I was never once late with a payment.

American Express then converted my charge to a Blue credit card with an $5000 limit. I went through a period of 2 months after finishing college and before starting graduate school where I had no income and I was unable to make even the minimum payment on the card.

At the time I called American Express to discuss a lower payment and lower interest rates as well as the possibility of a forbearance given that I had a job starting in two months. They refused to budge on the payment or the interest rate and quite literally laughed at the suggestion of a forbearance.

Eventually, they added on so many fees and so much interest that I couldn't begin to pay my bills and pay what they wanted. So, I continually paid what I could afford (about $90-100/month), which Amex continued to apply only to interest and not to principal.

My account eventually went to Mitchell N. Kay for collections; I thought it odd that I would be in that kind of collection status despite regular payments. I sent them a DV and never heard from them again. I continued to pay American Express, but the balance kept adding up.

Finished graduate school. Economy ate my job. I ended up getting SSDI and a part time job. My health is not in a state that I can manage a 40 hour workweek at this point and my total income is around $700 a month after taxes are deducted from the wage I earn in addition to SSDI.

Yesterday, I received a settlement offer from First Source Advantage. This is the first contact I have had with them (I've ocassionally received calls from an Unavailable/Unknown number but they've never left a voicemail).

They offered to settle for 50% ($2218.48) in a lump sum. Obviously, I don't have anywhere near that right now. After living expenses, if I have $100 left it's something of a miracle.

I've never stopped paying American Express at least something every month. I can currently only pay them $50 per month, which I've kept up for a year.

I sent First Source a counter offer (via mail) of 25% ($1109.24) in a lump sum. I'm hoping they'll take the offer, because that's quite literally all I can manage unless they accept a 24-36 month payment plan.

It will cost me about $1100 after attorney's fees to file Chapter 7, so I figured it was worthwhile to try to use that to negotiate a settlement instead, but if they refuse I may have to file Chapter 7 if they make any move to sue.