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American Express Won’t Let Us Continue Our Payment Plan We Established. – Kim

“Dear Steve,

We racked up $25,000 in debt to American Express on just one card and paid it down to $19,000 before being unable to make the $483 minimum payment each month. This was primarly due to daycare costs after having our first child. Daycare costs between $200 and $165 a week here is Gainesville, FL.

We were sent straight to an attorney at this point by American Express (not a collection agency) and agreed to pay about $200 and change, a month with no interest. It was a temporary agreement for a 12 months term in hopes are situation would change after that, but after 4 months we switched bank accounts and provided the new voided check to the attorney by email to switch the auto EFT info on our payments.

After the due date we noticed the money hadn’t come out and sent another email, still nothing. Then my husband started calling and the attorney said it was too late we had been kicked out of the 12 month program and to another attorney. This new attorney refused to take the $200 and change payment unless we could promise to increase to $483 after 3 months. We explained over and over that this wasn’t realistic. Nothing was going to change our circumstances that much since there were two other cards we couldn’t pay but they had smaller balances and we aren’t eligible for bankruptcy due to having parents on a couple accounts with us. After speaking with an employee assistance attorney that is free through our work they told us to just agree to the three month plan becuase in front of a judge at least we could say we gave AMEX money as long as they would take it.

We called AMEX back and the attorney wouldn’t sign us up for the program because my husband woulnd’t lie and say that we knew for sure we could pay $483 in three months.

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While we were not home, but my brother was sleeping at our house a plan clothed man knocked on our door and asked if we were home. My brother in law said honestly we were not and the man handed my brother-in-law what looks to be a court summons but when you read it, it states that we have 20 days to respond in writing to the complaint.

There was no envelope and it clearly states we are in failure to pay and gives some of our debt information. It wasn’t in an envelope or given any effort to be covered. Isn’t this an invasion of privacy. Does this or the situation with billing during our 12 month program we were kicked out of go against the fair debt collection practices act? Do we have any recourse?

In Florida the head of household has some exemptions from garnishment so we are hoping to avoid my husband (the name on the card and I was just an authorized user) from being garnished. We have no disposable income and would lose o ur house if this happened.

Kim”

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Dear Kim,

It seems we have a number of issues to deal with and a problematic statement by the EAP at work. If this case goes to court the court will typically decide the case as a matter of law. If the facts are your husband had a cardholder agreement to pay and didn’t make all those payments then American Express can avail itself of remedies under the agreement and/or law.

It does sound like you got served and you can confirm this by calling your local court house and asking them if there is a case filed against you.

American Express has a reputation of playing hardball and taking no prisoners.

So let’s see what we can do here. I have a couple of questions for you.

  1. Do you have any other debt besides the AMEX account? If so, what is it and who’s name is it in?
  2. How much is your house worth and/or do you have a Florida homestead exemption on it?
  3. What is the goal you want to achieve; payment plan, debt elimination, etc?
  4. When you say you are not eligible for bankruptcy because parents are on a couple of accounts are you concerned about repaying the debt or a notation on their credit report?
  5. Do you have access to something you can sell or another way to raise money to settle the AMEX debt?

Please post your responses and follow-up messages to me on this in the comments section below.

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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