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BB Owes American Express $40,000, She Can’t Pay It, Bill Collectors Are Starting to Call


“Dear Steve,

I’m in approximately $80,000 of credit card debt with an unfortunate and sudden drastic change in finances due to situations beyond my control.

I owe American Express $40,000 along with other credit card debt. I have never been late on my payments except this month.

American Express along with a few more creditors has already begun to call me. I have not as of yet returned the calls.

I’m pondering bankruptcy or perhaps some sort of credit counseling or debt consolidation plan? Do I just write each creditor explaining my situation?

At this point I only have approximately $500 dollars a month and just one of my American Express accounts requires a monthly payment of $516.

Please help, I’m desperately awaiting your advice.

What would you suggest I do? I inquired about bankruptcy and was advised I’d need to wait perhaps 3-6 months as bills are behind. Suggestion?????


Dear BB,

It is amazing how people are really as good to creditors as their last payment. Whatever has caused this sudden and drastic change was not expected or planned for but it has now left you in a very difficult situation.

American Express is a difficult company to deal with and their bill collectors have limited tools to use to really help you to get out of debt. The pressure they apply and approach to their debtors actually does more to drive people into bankruptcy as crazy as that sounds.

There really isn’t any reason to write to your creditors. If you have been late on a payment, they already know that. Besides a preemptive letter to your creditors seems to go nowhere and vanish into the ether.

You are much better off explaining your situation, nicely, to the collector on the phone when they call.

If your situation is temporary and you will be able to return to your previous financial standing in a couple of months then you’ve got some other options but from the way I interpret your question it sounds as if this is not a temporary reduction in income and it is more dire and long-term.

I am surprised that you were told to hold off on bankruptcy unless you were using your American Express cards up to recently. It would not be the best scenario for you to use credit cards you include in bankruptcy within 90 days of going bankrupt.

I would seek a second opinion from another bankruptcy lawyer in your area and ask for a free bankruptcy review.

In the meantime you should consider not sending any more payments to the credit card accounts you can’t afford to pay. This will damage your credit report and lower your credit score but there is no upside in draining any money that you may have currently on hand that may be needed to make necessary ends meet or to pay for bankruptcy when you file.

With credit card debts of $80,000, your monthly minimum payment on those accounts is about $1,600, and that $500 is not going to be enough to please all of the creditors. Any repayment plan at that level is almost certainly to fail.

If bankruptcy is really in your future then throwing good money after bad is not going to accomplish a thing. But that does not mean you can go out and party with that extra cash. Save it up to go bankrupt.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

  • let the new presdent pay all of our bills we are going to live in a new country and he is going to be our new king so let him pay our bills that is what most american think he is going to do anyways

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