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    Weak Case or What?

    My BK lawyer called me today and said that American Express (rewards card through Costco) is in his words "saber rattling". They're claiming they want to hear back from my attorney about the account.

    Here's the timeline. Debts being disputed (informally) occurred between April and June of 2010. Date of BK filing, March 30th, 2011, 341 Meeting May 5th 2011.

    So......about 8 ~ 9 months between using the card and filing. Seems like a good period of time according to everything I've read.

    I did use their card for a cash advance which was (I believe) $9,000 to get a small business started. If the business had done half as well as I was "sold" on it doing, paying this back would have been no problem.

    Does this sound like a "scare tactic" to you folks?

    #2
    It's not just a matter of how much time has passed since the cash advance.

    Some of the other issues include your financial condition at the time of the advance, how long you continued to make the payments, and whether or not there was an extenuating circumstance that triggered your filing.

    For instance, if your income level at the time of the cash advance was ample (enough to cover all your expenses including the payment req'd on the cash advance), and if you made your monthly payment for several months and then unexpectedly got laid off or suffered a medical catastrophe that forced your bk filing, then you may want to have your attorney respond to AMEX. If the facts of the case are such that AMEX would have difficulty establishing fraudulent intent, then the sooner they become aware of those facts the better. If they know their chances are slim, they won't file.

    But, presuming you have a defense, if you do nothing and they file an AP, then you're stuck with the bill to defend against it. You win, but you also lose because of the attorney fees. It's a waste if you can just do away with it all by responding now.

    If you don't have a defense that your attorney can lay out now, then you can ignore it and hope they don't file. And if they do file, you decide what to do then.
    There are two secrets for success in life:
    1.) Never tell everything you know.

    Comment


      #3
      Originally posted by debee View Post
      It's not just a matter of how much time has passed since the cash advance.

      Some of the other issues include your financial condition at the time of the advance, how long you continued to make the payments, and whether or not there was an extenuating circumstance that triggered your filing.

      For instance, if your income level at the time of the cash advance was ample (enough to cover all your expenses including the payment req'd on the cash advance), and if you made your monthly payment for several months and then unexpectedly got laid off or suffered a medical catastrophe that forced your bk filing, then you may want to have your attorney respond to AMEX. If the facts of the case are such that AMEX would have difficulty establishing fraudulent intent, then the sooner they become aware of those facts the better. If they know their chances are slim, they won't file.

      But, presuming you have a defense, if you do nothing and they file an AP, then you're stuck with the bill to defend against it. You win, but you also lose because of the attorney fees. It's a waste if you can just do away with it all by responding now.

      If you don't have a defense that your attorney can lay out now, then you can ignore it and hope they don't file. And if they do file, you decide what to do then.
      debee gave very good advice. I'd like to know what business. I got hooked into a pyramid scheme when I was young. Took me to the cleaners. Now there is no time limit on Fraud, and this creditor could claim this and the look back can be years, so the 90 period is NOT in stone. It is an advised look back. Getting a cash advance for that kind of money is a huge red flag. At this point, I would have your lawyer talk to them. Take his advice first, and perhaps settle for half with a reaffirmation for that amount. The Court would look favorable on that, I am sure. 'Hub
      If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.

      Comment


        #4
        Got a copy of the letter American Express Attorney's sent.

        I bought a $4600 watch (PayPal charge, easily traceable by seller's name), $3200 inventory for my store and assorted purchases of $1037. These occurred between April and June 2010. No cash advances.

        The watch seller is a "grey" market Rolex dealer. I've bought about five watches form him over the years, worn them for a while and then soldeach one for an average profit of around $500.

        I had just opened a mattress store that was "supposed" to make a LOT of money in May 2010. In July 2010 I had to go to the emergency room with an irregular heart beat which was diagnosed and resulted in surgery ( Cardiac Catheter Ablation) being performed in October 2010. Because of my inability to function at 100% the store barely survived and made just enough money to pay my essential bills.

        The watch was sold to pay bills, the inventory was sold and the various purchases I don't really know what they were.

        I'm thinking AE looks at it this way.....luxury watch purchase, new furniture (inventory but they don't know), a couple of payments, then nothing.....looks like, smells like....fraud.

        I could either:

        1. Have my attorney send them a letter outlining my health issues.
        2. Hope it goes away.
        3. If they file an AP, defend myself with the medical records. I "think: I could handle this and save the Lawyer's fees........
        Last edited by tah; 06-22-2011, 07:28 AM.

        Comment


          #5
          Sent this info (above) to my Attorney....Here's his reply.

          "I don't plan to do anything--if I did so, I'd have to charge you and I don't think they'll pursue anything anyway--just saber rattling"

          He's a GOOD Attorney and handles all the personal and business BK's for a VERY reputable firm here in Richmond, VA.

          I don't think he'd not respond hoping for an AP and more fees. Just not that kind of guy. He generates PLENTY of billable hours without manipulating cases for more money and fees.

          Think I'll just have to go with his advice for now.

          Comment


            #6
            Originally posted by tah View Post
            I did use their card for a cash advance which was (I believe) $9,000 to get a small business started.
            In your first post you indicate you took out a 9K cash advance. Miscommunication, I guess.

            Since you didn't use the card for a big cash advance, that reduces the risk of an AP.

            Good luck to you. Keep us posted.
            There are two secrets for success in life:
            1.) Never tell everything you know.

            Comment


              #7
              Originally posted by debee View Post
              In your first post you indicate you took out a 9K cash advance. Miscommunication, I guess.
              Yeah, sorry about the bad information. I don't have the records anymore and couldn't remember exactly what I had done.............

              Comment


                #8
                It's not a problem. Stay healthy.
                There are two secrets for success in life:
                1.) Never tell everything you know.

                Comment


                  #9
                  If they do file you still can offer them a settlement (which would likely be less than the cost to defend). You just wont be in as great a position to settle as you are now. Its always the decision of respond to their scare letter with a lowball settlement offer now, and hope they take it, but you are out that money. Or, ignore as your atty (and most from what I ve seen!) reccommends, and hope they dont file. But again, if they do, you can still settle for less than full amount...just not as lowball as if you d offered to settle now.

                  Comment


                    #10
                    Originally posted by sh9730 View Post
                    Its always the decision of respond to their scare letter with a lowball settlement offer now, and hope they take it, but you are out that money. Or, ignore ....
                    There's also the option of responding with a letter as outlined in my posts. It's not always an extra cost (depends on the arrangement made with the attorney) and it's cheaper than a lowball offer and/or a defense.
                    There are two secrets for success in life:
                    1.) Never tell everything you know.

                    Comment

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