A move from California to Texas (and a pay cut… though cost of living decreased, credit card bills/car loans did not!) is putting us in financial strain. We just had our second child and I am still paying on the medical bills 3 months later.
We’re not yet *behind* on anything, but one of our bills is really making it hard to get ahead. I feel like we are treading water, just barely – and sometimes not even that. I’m part-time job hunting but with two children, it has to be a job after my husband gets off work so I don’t have to put them in care.
We have an American Express account with a balance of $35K. The monthly payments on it are about $700 – when our new rent here in Texas is $1000, you can see these two are a large chunk of our monthly income. Is debt settlement with something like this an option? Without that card payment I can knock my other cards out for good (and fast!) but I don’t know if that is a good idea or not. I don’t have a savings and I am pretty tapped otherwise.
American Express is one of the absolute worst creditors to work with. They are also known to routinely not work with debt settlement companies nor accept debt settlement offers. See “AMEX Won’t Accept My Settlement Offer. What Do I Do Now? – Michelle.”
One option that would help you to avoid bankruptcy would be to stop paying AMEX, focus all your money on the smaller debts you can knock out, and as long you are friendly and nice to the AMEX collection people and flow through the normal collection process you’ll have about six months before they sue you. Once you get rid of the other debt you can make repayment arrangements with American Express. If they refuse to work with you at that point consider going through a credit counseling company or evaluate bankruptcy at that point.
If you are unwilling or unable to face the American Express collection activity while you execute this plan then you might just have to leap ahead to bankruptcy.
For answers about what bankruptcy would mean for you, please find and meet with a local bankruptcy attorney.