Firstsource Advantage Settlement Letter: American Express Debt Settled For 40%
This January 14, 2008 letter from Firstsource Advantage, LLC, a collection agency collecting for American Express, settles a $679.38 American Express balance for a single $272.00 payment due by January 15, 2008. That saved $407.38, or 60%. Lump-sum settlements often get the largest reductions, but results vary and settlement affects your credit.
What This Letter Shows
Firstsource Advantage, LLC (formerly Account Solutions Group) was collecting on an American Express account. The letter confirms that a one-time payment would settle the account in full. Personal details are redacted.
| Detail | From the letter |
|---|---|
| Letter date | January 14, 2008 |
| Collection agency | Firstsource Advantage, LLC, formerly Account Solutions Group |
| Creditor | American Express |
| Balance on the letter | $679.38 |
| Settlement amount | $272.00, one payment |
| Due date | January 15, 2008 |
| Reduction | $407.38 (60% of the balance) |
The Settlement Letter
See more examples on our debt settlement letters page.
Lump Sum Vs. Payment Plan
This offer had a one-day deadline and a single payment. Collectors often accept a lower total for a lump sum because they are paid right away. A payment plan is easier on cash flow but usually settles for a higher total and carries more risk if a payment is missed.
Who Is Firstsource Advantage?
Firstsource Advantage is a collection agency that collects past-due accounts for banks and card issuers, including American Express. If it contacts you:
- Ask for written validation of the debt within 30 days of its first notice.
- Confirm which creditor it is collecting for and the balance it claims.
- Get any settlement in writing, like this letter, before paying.
- You have rights under the Fair Debt Collection Practices Act. See debt collector harassment and your rights.
What To Know Before Settling A Debt
- Your credit is affected. Settled accounts are usually reported as settled for less than the full balance, and missed payments before a settlement also show on your report.
- Fees apply. Debt settlement companies charge a fee, usually a percentage of the enrolled debt, and under FTC rules they may only collect it after a debt is settled and you have made at least one payment under the agreement.
- Forgiven debt may be taxable. When $600 or more is forgiven, the creditor may send a Form 1099-C, and the forgiven amount can count as income unless an exclusion such as insolvency applies. A tax professional can tell you how it applies to you.
- Missed settlement payments can undo the deal. Most agreements say the creditor can go back to collecting the full balance if a payment is late or short.
- Results vary. Every creditor, balance and hardship is different, so no letter predicts what another account will settle for.