adversary proceedings

[ddye01]

In fall of 2009, I made several charges on my AMEX card. I had laser eye surgery for $3000 (in Oct.) and made several other charges that brought the total of my card to $7000. This is no different than any other card I had. I have a long standing history of major purchases.....thus me filing Ch 7.

At wits end, and finally realizing that I was in way over my head. I consulted a Debt sebtlement company. They, of course, promised me the moon. They instructed me not to pay any of my creditors (this would reduce the chance of debt sebtlement) and they began drafting my account for their fee of $850 per month for the first 4 months. Well, after a couple months of the phone calls increasing (not stopping like they promised). I finally knew that this was not the way to go.

In Jan. of 2010, I made one minor payment to all of my creditors ($50). I know this wasn't the amount required, but I wanted to send something. I was working 2 jobs (my wife stayed at home with our twins). My hours were cut on one job and my second job gave me a pay cut and reduced my hours. My income dropped tremendously. My wife found a job and went back to work in March. My income was still lower than before. I finally filed for Ch 7 on June 1. My discharge date is Aug 30th.

Amex sent a letter to my attorney saying "they may consider filing a dispute to discharge" saying that I made these charges with no intent to pay back and "didn't even make a single payment." This is not true. Although small, I did make the one small payment. It is true, I made the charges. But then my once manageable monthly payments....could no longer be made. Then I consulted the debt sebtlement company with no luck. Then, I lost my income. I made the small payment.....then ended up filing Ch 7.

What should I do? My attorney said I had two options....
1. Ignore the letter and see if they actually do file. These charges were outside the 90 day period.

2. Contact them for a settlement.

The attorney for AMEX is wanting an explanation for the charges and then no repayment. Should I write them and explain as I did here or wait it out?

thanks

[BCA2009]

Hopefully someone with direct experience will reply. But I would ignore them and wait to see what happens. Anything you tell them will be used against you at an AP. They are probably just making a last chance effort at getting something from you. All it cost them was a letter.

There is no guarantee that they won't refuse any offer and file an AP anyway.

I'd play the odds and wait them out.

Good Luck.

[ddye01]

Thanks for the reply. As of now, my gut feeling is to wait it out. However, I was just wanting to see other's opinions.

[despritfreya]

Ignore the letter. Nine times out of ten the letter is a bluff. If and when a TIMELY complaint is filed and served, you can negotiate a settlement.

[tobee43]

if it makes you feel better...i would fax the letter to your attorney and see what they say.

amex should not be attempting to collect a debt while you r in bk from what i understand....so run it by your atty...i would!!

good luck!

[blockhead]

Ignore the letter. Nine times out of ten the letter is a bluff. If and when a TIMELY complaint is filed and served, you can negotiate a settlement.

I (well my attorney) ignored one of those from Amex attorney (Becket and Lee in PA) - was about $2K - never heard back from them. Amex seem to pore over the charges made unlike any other CC company.

[SMinGA]

Send the letter to your atty, as well as your explanation of the chain of events - which the atty should already be aware of. Let the atty advise you.

Not legal advice, but my '2 cents' worth, the fact that you made 4 x $850 payments to the settlement company works in your favor. You were trying to do something. Unfortunately, it would have been better if that $850/mo had been doled out to your creditors.

[ddye01]

The letter was from the attorney beckett and lee. It was sent to my bankruptcy attorney first, not to me. My attorney asked me to explain what happened (again, they were already aware of this). Beckett and Lee's letter of course makes me out to be a criminal by "not making a single payment." My attorney has advised me to either 1. ingnore the letter and wait it out. Or 2. make a settlement offer.

I think I will wait it out. I only have 2 weeks to discharge and they gave me Aug 23rd as a date to respond. I am hoping that since these charges were 9 months before my filing.....they will let it slide. I also got a letter from another attorney from Wells Fargo.
They sent a threatening letter stating "we ran up $5000 in cash advances". It was for overdraft protection on our checking account. It sucks when you lose a job. You do what you can to survive and feed your family. Then to have Aholes keep threatening you. Needless to say....the Wells Fargo attorney has shut up. My attorney simply emailed them and told them that it wasn't pure cash I took out, but money used for living expenses due to the loss of my job. At least they went away. Hopefully the same will happen with Beckett and Lee and AMEX!!!!

[ben1381]

I had more than twice the amount of charges you mentioned(over 17K) with Amex and nobody from Amex has said a word and the 60 day period for filing objections has expired so I wouldn't worry too much.

[ddye01]

Were your charges over a period of time? I probably had a balance of 3k and then it went to 9k. They said that spending "wasn't consistent with my account history".

I often wonder if they have retained attorneys who write these intimidating letters on the hope people cave in from the get go?

[daytona]

You should be fine...you didn't run the charges within 90days of BK...I guess they can give the "dispute" a try, my guess is the BK judge will not side with them.

[tobee43]

amex is very odd... we had 4 accounts with them. firstly, they claimed the full amount in each of our names...(spouses).... on our credit report ...so when i listed them on the petition i listed the FULL amount with a KICK on top of them...as well as UNKOWN...

my attorney said that overkill...and that as long as they were listed on the petition the amount didn't matter that much.

we owed them i think approx 15k between all 4 cards...it was one of the LAST cards we using B4 filing and the trustee didn't say a word...although we waiting almost a year before filing.

[newbie2]

if it makes you feel better...i would fax the letter to your attorney and see what they say.

amex should not be attempting to collect a debt while you r in bk from what i understand....so run it by your atty...i would!!

good luck!

Amex sent the letter to the OPs attorney. That's perfectly legal to do so.

[ddye01]

Our trustee didn't say a word. Nobody showed up at our 341 meeting either. This attorney at Beckett and Lee said the file "just showed up on his desk" last week. Again, I wonder if these "files" just show up to different attorneys and they make an attempt to get money based on comission? Kind of like debt collectors.

I had read that it is very hard to prove that someone had no "intent" of paying back a debt. I hope that the fact that I did consult a debt settlement company proves that I was at least making some effort to get out of debt. (Although it was a poor choice and I would NEVER recommend it to anyone!)

[tobee43]

Amex sent the letter to the OPs attorney. That's perfectly legal to do so.

ahhh...i missed that somewhere...(not hard for me to do nowadays with my brainfog!).

yes, i agree...they can send the attorney anything they want.