I’m Thinking of Bankruptcy Because of American Express. – Kendra

“Dear Steve,

8 years ago I got an American Express Card. Silly me. Got laid off… couldn’t afford to pay on the measly 300 i owed, I fell behind once and they charged me ridiculous fees, fell behind again…now because of the fees, and not paying…they start hitting me over the limit fees. I called to settle 4 years ago, and they wanted me to pay 1000 in full. No payment plan. Nothing to offer. I couldn’t do that. Fast forward to now. Get a phone call from a debt collection service to collect the debt of 2800.00!!!!!!! My limit was 500. Offered to be set up on a plan. No pay 2500 in full they said. I am at a lose with this. I have a god job now. I’m financially stable. But I have bills. Student loans, rent, car note. What am I suppose to do. I almost contemplated bankruptcy, because my credit is already shot to crap because of American Xpress (mid 500’s). But that would be my LAST resort. Any advice please??? Should I go see a finical adviser?

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Dear Kendra,

American Express certainly has the right to charge penalty interest rates and fees when you default. It’s quite possible that in all that time the balance has grown to that amount. However, it appears American Express might have sold the account and it is now with an outside collection agency or new owner. In that case there is room to potentially negotiate.

But with a credit score in the mid 500s it would appear there have been or continue to be some other unresolved financial problems that are dragging your score down. Can you fill me in on what is going on with those?

If you want a comprehensive review of your financial situation by an outside financial advisor I suggest people contact Damon Day. He’s a debt coach that gives great advice and offers personal consultations.

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Damon Day - Pro Debt Coach

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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.
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