American Express Corporate Card

[kb584]

I've read similar posts here on AMEX Corp cards, which have helped, but don't exactly answer questions to my situation.

I will be filing for a Ch. 7 soon and I'm looking for some advice on what to do with AMEX.

Among two other credit cards, I currently have an AMEX Blue card with a balance of $1k which has never been late, although was closed by AMEX in the beginning of the credit crunch. I also have a Corporate AMEX card with a good history through my employer. The Corp card is tied to my SSN, the bills come to me, I file an expense report, wait for the check from my employer, then pay the AMEX bill personally.

I have heard that if you include an AMEX in a BK or DMP they'll blacklist you and you won't get another AMEX for a very long time, so I was originally planning on paying off the 1K on my AMEX Blue and making sure I had a 0 balance on my Corp card when I file. Then a lawyer told me it didn't matter whether I included the AMEX in my BK or not; that AMEX would see my BK anyway and keep record of that even after it fell off my credit history. With that, he suggested I not worry about paying off the 1K and just include it since the result would be the same.


So, in this situation my questions are:

1 - Would it be beneficial for my future with AMEX to pay off that 1K on my AMEX Blue? The AMEX Corporate isn't an absolute necessity through my employer, some others use a personal credit card for purchases since the end result is the same (file an expense report and pay the bill). Although, I am looking for a new job and would like to keep my options with AMEX as open as they can be in case my next employer requires an AMEX Corp card.

2 - If I do pay off the 1K on my AMEX Blue thus not including it in the BK, then keep a zero balance on my corp card while I go through the process, will I be able to keep my AMEX Corp card open?

3 - Similar to #2, can I exclude the AMEX Blue from my BK, continue paying the bill after discharge and keep my Corp card open?

[justbroke]

First, you need to be careful when you pay AMEX prior to filing. If you payback that $1,000 (or even $600) within 90 days of filing, that's a preference and the Trustee will just take it and re-distribute it amongst all unsecured creditors.

Yes, AMEX does like it when you owe them nothing and have been bankrupt. What they don't like is when you BK them and they are stuck with thousands of dollars in bad (noncollectable) debt.

I'm unsure if your corporate card will be affected if you keep it clean, but some of that depends on how much liability your company has with the card. It seems like you should be okay with the Corporate card. Entering BK with a $0 balance on the AMEX Blue will certainly put you in a better light with AMEX.

Trust me... as I did this from experience. Don't BK the Corporate Card -- include it as a creditor in the filing -- because if they cancel it, it may be difficult to get back without it being a "corporate responsibility" card. There's a slight difference between corporate guarantee and corporate responsibility, as the former just promises that the corporation will pay "authorized" charges.

[backtoschool]

I agree with what justbroke said. I would like to add the following things to think about:

1. If you have zero balances on the cards, as justbroke said, you will not have to include them in your filing which is a good thing. Amex will get a notice though since they do account reviews every month, and when they get the notice, they may close your card.

2. You cannot pay the balance off of the blue card at this point because that is a preferential payment that will be clawed back by the trustee, so you are in a catch 22 there.

3. Amex has a policy of taking you off of their black list if you pay in full what you owe them. So, after your bk you can pay them the $1,000 and try to work out an agreement for them to keep the cards open. They have a special program for this.

[olivies]

DH had a personal Amex, which we included, and a corporate Amex from his employer, not included. His personal Amex had all of a $500 balance. His corporate card was set up like yours: submits the charges, gets the check from his employer, and then pays the amex with it.

When we filed a 13, Amex did nothing. Didn't blink.
When we let that dismiss and filed a 7 instead, Amex immediately cancelled his corporate Amex card.

The rep at Amex said it's because of the laws and they can not even accept a payment from him on the corporate card if he's in a bankruptcy even though he's not including that corporate card in his bankruptcy. But that can't be the truth because they had no problem letting him use it and make payments on it when in the 13 (although he only used it 2-3x I believe- just for corporate travel or software purchases).

I say it's BS- they didn't cancel it with the 13 because they were getting some money from us, and were only canceling it with the 7 as a way of saying "well screw you" back.

[justbroke]

The rep at Amex said it's because of the laws and they can not even accept a payment from him on the corporate card if he's in a bankruptcy even though he's not including that corporate card in his bankruptcy. But that can't be the truth because they had no problem letting him use it and make payments on it when in the 13 (although he only used it 2-3x I believe- just for corporate travel or software purchases).

They can't take payments while the automatic stay is in place. That remains in place until the discharge is entered. There are many differences between a Chapter 7 and a Chapter 13. A Chapter 13 is basically a "pending" bankruptcy that takes years to complete and receive a discharge. The Chapter 7 is near instantaneous (3-4 months) discharge, so creditors are much more wary.

He can re-apply for the corporate card (or re-instate it) once the case is discharged.

[kb584]

Wow, a lot of good info here. Thanks everyone for the quick responses!

The preferential payment idea is a little concerning to me now on the Corporate card. Does the same apply with payments I've made on the Corporate card? (paying off full balance each month) I normally have around $1K to $1.5K per month on the corporate card that I pay in full every month. When I file, will these payments be retrieved and re-distributed, leaving me with a balance on the Corporate card and forcing me to include it in the BK?

[backtoschool]

The trustee may try to claw back those payments. In that situation, an argument would have to go before the bk judge that those payments were mandatory as per your corporate card agreement, etc. It would probably go before the bk judge, and your company card administrator might have to get involved. It would be best not to use the card while in bk or for 90 days before you file.

[justbroke]

The preferential payment idea is a little concerning to me now on the Corporate card. Does the same apply with payments I've made on the Corporate card? (paying off full balance each month) I normally have around $1K to $1.5K per month on the corporate card that I pay in full every month. When I file, will these payments be retrieved and re-distributed, leaving me with a balance on the Corporate card and forcing me to include it in the BK?

For the Corporate card, they are business expenses. Unless you're saying that you're using the Corp Card for personal expenses?

[backtoschool]

For the Corporate card, they are business expenses. Unless you're saying that you're using the Corp Card for personal expenses?

Even if they are business expenses, justbroke, the trustee may try to erroneously claw them back and it will have to be handled with some paperwork etc, to prove that they are business expenses.

[justbroke]

Even if they are business expenses, justbroke, the trustee may try to erroneously claw them back and it will have to be handled with some paperwork etc, to prove that they are business expenses.

I agree.

[kb584]

They are both business and personal expenses, justbroke. So it sounds like my best bet is to zero the balance on the corp card, and wait 90 days. Anybody know how long creditors normally go before taking action on bad debt? (I know it differs between cases)

[backtoschool]

They are both business and personal expenses, justbroke. So it sounds like my best bet is to zero the balance on the corp card, and wait 90 days. Anybody know how long creditors normally go before taking action on bad debt? (I know it differs between cases)

Amex will send you nasty robocalls right away, and maybe some mail, but nothing severe. Most creditors wait 6 months to a year before filing any law suits. Some creditors never file lawsuits at all. Of course as with anything ymmv.

[IBroke]

Talking about preferential payments:

Is it true that a payment made on your behalf by a third party is NOT considered preferential because the funds for the payment didn't belong to you?

[justbroke]

Is it true that a payment made on your behalf by a third party is NOT considered preferential because the funds for the payment didn't belong to you?

It is a preference and is treated as a gift. However, if it was a business expense, that's legitimate to pay.

[Flamingo]

As to your corporate AMEX, you may need to check with your employer as to your situation because if that is closed out by AMEX your employer will be informed as the card was obtained for you on your behalf, even on your credit, from AMEX as an employee; thus, a "corporate" (business) AMEX. You will also need the agreement that you signed with your employer as to obtaining that card because if you file bankruptcy, you may need to inform your employer. That clause could also be in your Employment Contract if you are manager and above and have a contract agreement for employment. But if that AMEX gets closed and you don't inform your employer, they will find out from AMEX...best of luck to you.