Debt owed to past employer – taking legal action

August 20th, 2009 by Questions

I had a Amex corporate card from my past company I worked at and used the card for many personal purchases given the benefits of collecting points, etc. Due to my horrible spending habits I racked up quite a balance on the card over the past 2 years. I was not being charged interest and had no problems and made payments as I went along, but not enough. Amex requires payment in full but for some reason, they didnt bother me about it and I ignored it as well.
Now, I was recently laid off from the company (for different reason entirely) and subsequently the card cancelled. Because I cannot pay the balance on the card given my financial situation, my past company is taking legal action to recover the amex balance. I had assumed that I would be liable for the balance to amex but it seems that my past employer is responsible for it (?); very confusing at the amex card agreement says otherwise.

Would filing for bankruptcy get rid of this debt I owe to my past company/amex? We all think bankruptcy is for credit cards, loans, etc, but does it apply to my situation as well? Because I do not have any real assets, the legal case from my past employer will likely end up as wage garnishment for a long time (after i find new work). Will bankruptcy stop this? Is my past employer looked upon as a `creditor` like any other credit card company for example trying to recover debt owed to them?

thanks for your help

Posted from: Ontario


One Response to “Debt owed to past employer – taking legal action”

, A licensed trustee said:

Most “company issued” credit cards are guaranteed by your employer. That means if you fail to pay the balance your employer is helpd responsible. In turn, they have the right to pursue you for any persoanl charges you placed on the card.

It sounds as if you agree that you used the charge for personal expenses – I suggest you contact your old employer and consent (agree0 to the amount of the debt and set some repayment terms. At least this will save you the legal costs that they are going to add to the detb if they have to take you to Court to recover their money.

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