Amex Bewitches Bankruptcy Filers

I cannot figure out what dirty secret American Express has on consumers filing personal bankruptcy. Every single client who wants to file for bankruptcy and has an American Express card always wants to “keep it.” They tell me – “I want to get rid of all my other credit cards – but can I keep my Amex?” In fact, one prosepctive client refused to file for bankruptcy protection because he would have to destroy his American Express card. So he’d rather be $40,000 in credit card debt than tear up a 5 cent piece of plastic with virtually no more charging power? I always say no, you can’t keep the card. You don’t want the card anyway – what you really want is the title of CEO and run the entire company. According the Wall Street Journal, American Express Co.’s Chief Executive Kenneth I. Chenault received a total compensation valued at $16.8 million in 2010. This amount includes a base salary of $1.9 million and a cash bonus of $2 million. The reason he got so much cash – you and I are spending lots of money on Amex.

For a time, I was growing concerned that American Express was the skeleton in everyone’s closet – that if cancelled – a consumer would face public flogging, heckled on billboards and embarrassment for decades. Heck, the card isn’t accepted in all the places Visa and MasterCard are accepted anyway. Fact is, American Express is just like every other credit card or “charge” card company. It is listed in the same Schedule in a personal bankruptcy, in the same class as Citibank Visa, Chase MasterCard, and every other unsecured creditor. Furthermore, bankruptcy prohibits you from favoring one creditor over any other when each is in the same class. So you can’t say, “I pay Amex $1000 and not pay Citibank Visa $1000.” If you can break the Amex-trance – here’s an experiment – don’t pay your Amex bill for 2 months – and see how friendly they are when you tell them you don’t have money to pay them. I think that should break the spell.

Bennett Cunningham is a Bankruptcy Attorney licensed in Texas and is a former Investigative Reporter for the CBS Television Station in Dallas. Mr. Cunningham has garnered 7 Regional Emmy Awards, including the Best Investigative Reporter in Texas 2 years in a row, as well as several National Awards for his exposés into the mismanagement of taxpayer dollars and government waste.

This blog is not meant to give you legal advice. If you need to seek legal advice, you should consult a licensed attorney in your jurisdiction.

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