I have been with Freedom Financial since early 2011. Have paid $7400 into a settlement acct ($1050 per mo) since May.
I have 8 creditors. FDR has reached a settlement with Advanta and Capital One. I’m not sure when the Advanta Payments will be completed, but the Capital One payments are supposed to be completed April 2012.
We have 6 additional accounts outstanding with a combined balance of $48,000. The remaining creditors are Chase, American Express, Discover, CitiBank, Sears, and another Capital One.
We have now received a summons from a law firm on behalf of American Express for $10,000. We have had no contact with AMEX or the law firm on advice of FDR.
A written response to the summons is due at the end of this week (which FDR does advise we respond). FDR says we don’t have enough money in our account right now to make AMEX an offer (Our settlement account balance shows $732.)
I have called FDR several times to inquire if they have made any contact with Amex or the lawyer and they keep putting me off saying they need more time. I don’t think they have had any contact.
After a couple of years of unemployment, my husband is presently employed. His company provides a business AMEX for company expenses, so AMEX knows all his work info, that he is employed etc. Our other creditors probably don’t have that info in their files since we were self employed for the 5 years prior to 2010.
I am concerned that the path we are on is leading to a pay garnishment, plus we have these other creditors looming out there as well.
I just don’t know what to do, and after reading a bit on your site about FDR I am concerned that the debt settlement approach was not the best idea. What do you advise we do at this point?
The absolute max we could devote to paying off creditors right now would be $2000 per month, and that would be close to a hardship. If my husband loses his job over this, it’s going to feel like the end of the world. Thanks in advance for your help.
The only debt relief provider that can stop a creditor from suing is a bankruptcy attorney. I must admit that chain of events you’ve given me sounds a bit perplexing. FDR advises you respond but what is the response going to be?
It seems you did have an agreement with American Express and did break that agreement by not making minimum payments. American Express seems to be attempting to enforce their right under the agreement by taking you to court. If you lose it could end in a judgment and even possibly a wage garnishment.
It seems the path you were on was working for you but this suit by AMEX may change everything. It might not even be the last suit you’ll face since you have a number of creditors waiting in the wings.
Before this gets out of hand I would advise you to click here to find a local bankruptcy attorney and meet with them. Only then can you best understand the pros and cons that bankruptcy may mean for you.
I also urge you to get some specific advice from FDR about this suit and ask them what the possible outcomes are if you lose. You need to be well informed so you can make the best decision for you on how to proceed.
I’ll contact FDR and direct them to this post and ask them to comment.
Please post your responses and follow-up messages to me on this in the comments section below.