Credit Cards that Dispute

[MajorMike]

We just got a letter copied to us from our Attorney saying that we incurred charges on our AMEX card within 90 days of filing in the amount of $4800. The card was a corporate card in the name of the company that I used to work for but NOT a company card. I was responsible for all payments and they were supposed to be made in full each month. Obviously we couldn't make them and this is where we are. I got a letter from Amex saying that these charges are non-dischargable and that the company listed is not listed in my BK documents anywhere. This is because I just bought things with the card and paid it off each month. I called them a few months prior to filing to let them know I was no longer with the company. Apparently they didn't put that in their records. Nonetheless, do any of you know what could happen now. My attorney only sent the letter but hasn't called me yet to get my story. The attorney for Amex is saying that we have until January 28th to reply and that if they don't hear from us by then, they will proceed with litigation. Please help! We're in a panic! We can't afford to pay the $4800 but will they work something out, or do they become a priority debt? Any help would be appreciated!
Thanks!

[MajorMike]

Oh, and we're already confirmed! Don't they have to appear at the 341 to object? I didn't think they could after confirmation. Anyone?

[MajorMike]

98 Views and nobody has any advice?

[silverlotus]

Get on the phone with your attorney. Only he can tell you what the rules are about that and how you should reply. And you're paying him right? Make him earn his money!

Otherwise, common sense tells me to get proof that you haven't been with the company for the amount of time you claim if that makes a difference. Also, it's my understanding (and that doesn't mean squat!) that purchases for basic living expenses were not as much of a problem as say, a 50" plasma but a creditor could still contest it. A creditor can contest anything I suppose.

Amex is horrid to work with. We had them years ago and they were JERKS. We missed one payment on accident and they were threatening to do everything but loot our apartment. They tried to trash our credit and everything else. We paid it off immediately, closed it and told them in no uncertain terms where to stick it. I am not surprised they're playing hardball. But that doesn't mean you can't win against them.

Other than that, I have no advice. Sorry.

[rrockinggramma]

You are in a chapter 13 and so the trustee and your attorney and amex will probably move them up in the order of things so my suspicison will be that they will become a priority debt, much like a secured debt. However, the trustee and the judge may have something to say about that because it is a credit card and they don't like it when 1 card gets more than another. The other issue I think you have to contend with is the funding of the plan. If that debt becomes a priority then my guess is that that 4800 will be added to your payments, but spread out. So your payments may go up a bit. And no, creditors have until their bar dates to object. They don't have to appear. Obviously talk to your attorney but my suspicion is that AMEX won't get the whole 4800.00 But I definitely would be looking for receipts or a way to account for exactly what that money was spent on, just to cya.

[aa06a47]

We just got a letter copied to us from our Attorney saying that we incurred charges on our AMEX card within 90 days of filing in the amount of $4800. The card was a corporate card in the name of the company that I used to work for but NOT a company card. I was responsible for all payments and they were supposed to be made in full each month. Obviously we couldn't make them and this is where we are. I got a letter from Amex saying that these charges are non-dischargable and that the company listed is not listed in my BK documents anywhere. This is because I just bought things with the card and paid it off each month. I called them a few months prior to filing to let them know I was no longer with the company. Apparently they didn't put that in their records. Nonetheless, do any of you know what could happen now. My attorney only sent the letter but hasn't called me yet to get my story. The attorney for Amex is saying that we have until January 28th to reply and that if they don't hear from us by then, they will proceed with litigation. Please help! We're in a panic! We can't afford to pay the $4800 but will they work something out, or do they become a priority debt? Any help would be appreciated!
Thanks!

Not sure I truly understand what the company you worked for has to do with the card. If your previous employeer "guaranteed" payment, then they may be the one holding the bag. You might be well off to include them in the bankruptcy....unless you plan on working for them again.

[MajorMike]

When I applied for the card, I put the company I was working for on the application and they put their name under mine on the card but never asked for a tax id or proof it was even a real company. They're saying that this debt was incurred within 90 days of our filing ( it was 80 days or something ) I don't mind paying them but the trustee already said that my payment is over what I can afford. My attorney said he'd cut $100 off the food expense on my schedule so it looks like I can afford my payment. I can't imagine them trying to increase it when on paper it looks like I can't. I'm only paying 5 percent to unsecureds and that is the lowest I can pay. We don't have zero percent in our district. It isn't allowed. So, if this becomes a priority debt, that's fine. I just wondered if this thing will go to court??? Like I said, our attorney hasn't called me or questioned me on it yet. Maybe he just copied me on the letter but will take care of it with Amex. I guess I'll wait to hear from him?

[rrockinggramma]

well chapter 13's are all about compromise. I bet if your attorney doesn't object then the trustee will. Could be that AMEX is just making a power move. I seriously doubt that the trustee will let them get away with it. Have you talked to your attorney yet?

[AboutToBK13]

If the Ch 13 has already been confirmed, and the date for filing claims by CC's has past, is sounds like AMEX is SOofL.

I personally did not think that CC's had much of a leg to stand on if they miss the proper dates for claims, etc.

[MajorMike]

The date for filing claims has not passed

[rrockinggramma]

Then they should file a claim for the amount they feel you owe. Their issue is that they want to be paid at 100 percent. LOL Don't think that will happen. Hopefully you can talk to your lawyer tomorrow and find out what he thinks. Keep us posted!

[CindyLou]

If you don't mind me asking, what were the charges for? Were they luxury items or travel, or were they living expenses or bills? That will probably make the difference.

[MajorMike]

sold the gift cards to pay bills but it won't look like that to them, obviously!
so, if that's the case...what can happen?

[CindyLou]

so you used the amex to buy gift cards? Ok, then it will probably depend on where you purchased those gift cards.... Grocery Store, Wal-Mart, or upscale Department Store. Also where the purchases in whole dollar amounts that would clue them in on that the purchase was for a gift card.

I was thinking also that in a chapter 13, I thought that there were certain debts that would usually not be dischargeable in a 7 that were dischargeable in a 13, which includes questionable charges and cash advances. Have you asked your attorney that question?

[FreshLikeADaisy]

Not sure I truly understand what the company you worked for has to do with the card. If your previous employeer "guaranteed" payment, then they may be the one holding the bag. You might be well off to include them in the bankruptcy....unless you plan on working for them again.

Hrmm, the last time I had a corporate Amex (2002?) it was my credit and my debt. I had to have it because I traveled extensively for work. I gave the company an expense report, they cut me a check, I paid Amex. I'm pretty certain that's standard, at least it was for me every time I had to get a corporate card for travel.

But it would have been my job if I hadn't paid, even though the liability was mine. There was a guy I worked at the time with whose girlfriend was supposed to be paying his bills with his money but was actually shopping; he didn't find out about it until one day he comes home from work to find the sheriff proceeding with eviction and his stuff getting carried out of his apartment. Literally. She had been hiding all the late notices and eviction letters, etc. and had been depositing his expense checks but not paying Amex, even though he used it daily for travel. His corporate Amex was up to $8000 and he came very close to losing his job, not because the company had to pay but because Amex sends the company notices whenever anyone is late and it looks really bad. (I think they play hardball at the corporate level as well.) Fortunately our boss and the local HR rep stepped in and he was able to work out a payment plan with Amex, but it was touch and go for a couple of weeks while they figured out what to do with him. The girlfriend disappeared -- literally disappeared -- within a day or so of the sheriff eviction, and one can only assume she had her next "boyfriend" all lined up for just such an event. Sheesh.

Another company I worked at had employees with corporate Amex cards that were constantly being used for personal purchases, etc. This was back in '99 during the tech boom. They sent all employees pissy emails about corporate card misuse from time to time, and at one point there was (according to this email) a 29% default rate on our company's accounts with Amex. Well, that company no longer exists, but it was a situation where, when the company folded, marshals came and padlocked the doors at all the offices across the country on the same day; management had raided the assets and there was nothing left, not even to pay expenses or issue paychecks or pay health insurance, etc. It was a bad scene. One of the assistants who used her corporate card to pay travel expenses for temporary employees (at the specific demand of management) got stuck with a high balance when the company folded, over $4k if I remember correctly. I never heard the outcome of that beyond her getting stuck with having to pay it, but I'm pretty certain it was technically her debt and not the folded company's.