October 22, 2019

Do You Want to Give Money You Don’t Owe to a Credit Card Company?

This is not a trick question.

I received this letter today from American Express regarding the balance owed by one of my Chapter 13 bankruptcy clients whose case was dismissed.  The letter acknowledges that because of the age of the debt, Amex cannot sue my former client, nor can they report the unpaid balance to the credit bureaus.  Yet they are giving him the opportunity to “settle” this debt for 45% of the balance.

Can you think of any reason why anyone would pay Amex anything on this stale account?  I can’t.  But I wonder how many people agree to make payments and possible waive the statute of limitations bar to collections.  If you get a letter with a notice that the debt is stale, don’t even think about making a payment.

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