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Sued by Amex in California


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Good morning all, I'm new and have been reading much about amex, and arbitration. reading the fine print on the CC agreement is sometimes "yeah,yeah,yeah", until you come to a place like this and see there's a good reason for these things. Thank you!

 

ok so Amex just served me yesterday and I want to be timely and not have a judgement against me just yet. I've been reading arbitration may be the best thing for me? Maybe not.

 

My debt is for 23Km it was 30K but over the past 8 months I've been paying it down to 23K.

 

Back story:

I had an IT consult business which took a turn for the worst, when the economy feel in 2008 or so, and I had to reinvent myself. I started selling collectibles onn ebay and have been supporting ym family this way for several years now. I made the mistake of using Amex to support paying my distributor for my inventory and my monthly faul in full grew to about 8K a month. I was able to pay this off each month. I started hitting a"spending limit" with Amex but was told I had no stated limit, but each month I'd hit an invisible limit at about 32K so I wasn't able to use it at that point so I would pay it down and be able to use it, I put some of the debt over on pay over time so I could continue using it.

 

One month I was late on my payment, I believe I was 20$ late or something close, but the put a freeze on my spending ability until I was caught up.

 

Things happen and when this happen I had to use the cash from sales to pay the distro to stay in business. The feed the family, then the excess would go to amex to pay it down. Still unable to use the card they then lowered my credit limit to 20K and I was still unable to use and my paying ability went way down as I had to use that money from sale to 1) pay the distro, 2) Feed the fmaily, 3) pay amex.

 

Amex cancelled my account and sent it to a collector, I forget the name but I was still paying amex each month any amount I could and in the past 8 months have paid it down 8K. They don't care they want their money. I understand this. can't give what I don't have.

 

Then I receive letter from attorney to contact them and I forget to as it sat on my desk in a pile until I was served yesterday.

I called the attorney sung me and tried to see about payment plans, I said I could commit to 400$ a mnth for sure and then proceeded to tell him my back story as I did above. He sai he will talk to his liason and come back in a moment, he said that 400$ a month wasn't much and it would take about 5 years to pay off.( better than not right?)

BUT NOW he would have to consult with his client about the allegations of invisible spending limit I stated and then get back to me about it when he could. I said let's just work on payment plan and he said he couldn't until he looked into the m,atter more.

 

I asked him so basically your saying you're blowing me off and I'm going to just have to go to court? He said he couldn't give legal advise and to consult my attorney and then basically hung up.

 

After initial upset, I say down and started researching and came upon this site.

 

Suit is filed by Law Office of Sara J Hamilton P.C. for American Express Ccenturion Bank, a Utah Bank.

I have 30 days to file written response. ourt filedin is here in San Diego so I assume that's where I file my response to go to ARB?

So here's more info on me:

I work for myself, slef employed..

 

Last years net income AFTER taxes was approx 10K-15K, I'll have to look it up, but I have a lot of write-off as my home is my place of business and things add up for running the business, gross income is over 100K but with inventory all bills paid and halth insurance net is what I stated above.

 

I own NO Property.

 

I have a bank account that has little money in it at any one time.

 

I use paypal and it's debit card for monet transactions unless I have to transfer money tot he bank to pay bills

 

I owe a Toyota Highlander outright, it's the family vehicle.

 

I am paying on a new toyota truck which is also the work truck for IT stuff(what's left of it) and also a fmaily vehicle(dbl cab).

 

My Questions:

 

Should I do arbitration?

or go to court?

I'm familiar with small claims as I've had to sue to get paid as well, and a judgement is something that is on your CC report until it is paid correct? and then 7 years after right?

 

Summer time is slow for sales of my kind but I'm still putting money towards the debt, as much as I can when I can.

 

My thoughts or assumptions after reading on here for several hours is with arbistration I am basically buying some time?

 

If I go through JAMS for arbitration, amex has to pay for it? Or I can get their fee's waived as I was just approved for Medi-Cal, californias low income health insurance, so courts site says I can qualify because of that for fee waiver. Same for JAMS?

 

So opting for ARB I understand it will start to cost AMEX more moeny to deal with me, and they may drop the collection? if so what is put on my CR? A charge off?

 

If they continue with ARB, they run up the bill and if we go through ARB will that give me an avenue to ask for a payment plan or what?

 

have read much on here but I am still alittle unsure of what ARB does for me and what happnes if it actually happens.

I think I understand there is a judgement still but how is it different than going to court?

 

Should I file some STAY on the court until ARB is granted? Will ARB be granted with JAMS when I call them and file for ARB?

 

Any help is much appreciated.

 

I do well with visual so an outline of what I should/need to do would be appreciated, I will be reading the ARB forum next after lunch and try to figure more out on my own. Thank you.

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That is a large debt by an aggressive original creditor.  They will have the paperwork to prove this case.  AMEX also will follow you into arbitration. The tactic of invoking arbitration to scare them off due to the cost of it won't work with AMEX.  They don't care about the expense.  In fact given the long wait to get into court in CA due to the heavy dockets they may opt for arbitration quickly to get to their money faster.

 

Invoking arbitration does not give you leverage to get a new payment plan with a creditor that will willingly follow you into it.  Settling may be your best option if BK isn't.

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Well the good news is you can take them into arb, and in California, they pay your fees.  You don't have to pay them back even if you lose.  So this may very well be a deterrent for Amex. to arb.  The amount is high, they usually do follow consumers into arb for that amount, but you really don't have anything to lose by doing so.

Go to the JAMS website.  look at the quarterly they have posted, and see how many times amex has went to arbitration, how many of those cases were settled, dismissed, or awarded.  That would give you a good idea on what to expect. at the very least it would buy you time to settle, or gather money to get a good pay off rate, etc.

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thanks for the responses!

BK wouldn't really be good for me as with BK from my understanding and talking to a BK attorney, it wipes out any unsecured debt such as other CC's which I have an need. I use those to run my business and ish I would have done a revolving CC instead of AMEX.

 

So no BK for me as the ONLY debt that is a problem right now is AMEX.

 

Ijust want to continue making payments or whatever I can get, I don't have a lump sum of money to give them. Period. We are essentially living sale to sale and they can follow me around as much as they want but they will only get what I can afford to give them. My wife and I are not legally married so they can't touch her. I can put my money in her bank acocunt if need be.

 

So trying to negotiate a settlement, will that also get me a payment plan?

 

I'm not really trying to run from this, I'm willing to pay but I'm in a financial hardship way but I know I owe, and I'm ok with that.

 

One question that wasn't answered is once the debt is paid after the judgement, is it removed from CR? or does that happen after 7 years after it was paid off?

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That is a large debt by an aggressive original creditor.  They will have the paperwork to prove this case.  AMEX also will follow you into arbitration. The tactic of invoking arbitration to scare them off due to the cost of it won't work with AMEX.  They don't care about the expense.  In fact given the long wait to get into court in CA due to the heavy dockets they may opt for arbitration quickly to get to their money faster.

 

Invoking arbitration does not give you leverage to get a new payment plan with a creditor that will willingly follow you into it.  Settling may be your best option if BK isn't.

 

Thanks Clydesmom, approx how long is it to get into court or get a date for court in Ca?  My thought is this, go ahead and answer the summons and start the court date process, but then as the date gets closer opt for ARB? can that be done?

Thereby givng me more tie to pay this down.

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Well the good news is you can take them into arb, and in California, they pay your fees.  You don't have to pay them back even if you lose.  So this may very well be a deterrent for Amex. to arb.  The amount is high, they usually do follow consumers into arb for that amount, but you really don't have anything to lose by doing so.

Go to the JAMS website.  look at the quarterly they have posted, and see how many times amex has went to arbitration, how many of those cases were settled, dismissed, or awarded.  That would give you a good idea on what to expect. at the very least it would buy you time to settle, or gather money to get a good pay off rate, etc.

 

ok most for amex were settled, some were abandoned, some where dismissed and few were awarded after hearing.

 

Settleed would mean what? they settleed for a lower amount? would they also settle for payment plan?

 

thanks

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Thanks Clydesmom, approx how long is it to get into court or get a date for court in Ca?  My thought is this, go ahead and answer the summons and start the court date process, but then as the date gets closer opt for ARB? can that be done?

Thereby givng me more tie to pay this down.

 

In small claims court 2 years or more.  It might be faster in state court which is where your case is likely to be given the size of the debt.  

 

You would need to opt for arbitration from the beginning.  In some states if you participate in the legal process you give up your right to arbitration so you want to know if that is the case in CA.

 

BK wouldn't really be good for me as with BK from my understanding and talking to a BK attorney, it wipes out any unsecured debt such as other CC's which I have an need. I use those to run my business and ish I would have done a revolving CC instead of AMEX.

 

So no BK for me as the ONLY debt that is a problem right now is AMEX.

 

Once your other creditors find out AMEX has sued you (and they WILL find out) they will do one of two things:  close your account(s) out right or balance chase you to much lower credit limits.  Defaulting on one creditor leads the others to hit the panic button.  You should be prepared to lose other credit lines or have them significantly reduced.

 

So trying to negotiate a settlement, will that also get me a payment plan?

 

Maybe.  There is no way to predict if they will enter into a new payment plan.  The only way they are likely to agree to it on a debt that large is through a consent judgment.  That would mean if you default again they don't have to sue you they only have to file the judgment with the court.  Think VERY carefully before you agree to that and make sure you understand all the terms.

 

One question that wasn't answered is once the debt is paid after the judgement, is it removed from CR? or does that happen after 7 years after it was paid off?

 

The judgment is a public record and even if you pay it off it will remain for at least 7 years post satisfaction unless you can get AMEX to vacate it at that point.

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Small claims lawyers are not allowed, so it's a civil case and anon amos says 12-18 months. how long does it take for ARB to take place?

 

can anyone else validate Clydesmom statement about the other creditors?

 

HOw do I find out about the Defaul;ting ARB if I answer a Summons?

 

How shoudl I proceed with asking or getting ARB? Do I need to answer the summons so the court knows I am going with ARB?

 

If I go with ARB is a judgement on my CR that the other creditors will see as well?

 

I need my other CC's to continue to run my small ebay biz to support my family, I need my truck for work and I need the family vehicle to to use for family.

 

how will paypal be affected with this as well? or will they be affected? I use a paypal debot card which is basically only good if you have money in your account.

 

Just not sure what to do here.

 

Anyone have any suggestions as to what I should do?

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Small claims lawyers are not allowed, so it's a civil case and anon amos says 12-18 months. how long does it take for ARB to take place?

 

Can be as short as a few months.

 

can anyone else validate Clydesmom statement about the other creditors?

 

Read this:  http://www.creditcards.com/credit-card-news/default-some-cards-lose-all-1585.php

 

HOw do I find out about the Defaul;ting ARB if I answer a Summons?

 

Search California law on arbitration.

 

How shoudl I proceed with asking or getting ARB? Do I need to answer the summons so the court knows I am going with ARB?

 

Yes, you have to answer the summons or they get a default judgment.  You file a motion to compel arbitration.

 

If I go with ARB is a judgement on my CR that the other creditors will see as well?

 

Yes.  Once a creditor wins the arbitration award they have it affirmed by the court as a judgment.

 

Anyone have any suggestions as to what I should do?

 

Go to www.consumeradvocates.org and locate a consumer attorney.  Most do a first consult for free.  You are in WAY over your head and have far too much riding on this to go it alone.  

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Yes.  Once a creditor wins the arbitration award they have it affirmed by the court as a judgment.

 
 

 

Go to www.consumeradvocates.org and locate a consumer attorney.  Most do a first consult for free.  You are in WAY over your head and have far too much riding on this to go it alone.  

 

Thanks Clydes mom, when you say I'm in way over my head it sounds so...Bad. I mean there are no debtors prisons and all they can do is hurt my credit for at the most 7 years after the judgement is paid off correct?

I mean what can they do to me really? they can't get what I don't have. So much of americas ego is based on money and credit that when people start dealing with these things they freak out. So I'm really just trying to remain calm and deal with it the best I can.

as far as getting an attorney, I can't really afford one. The one attorney told me BK was 1500$, and to talk to the plaintiff and "make this go away" amicabley is 7K and he said sounds like you can do that due to money. Which he is right.

 

When you say way over my head, I know I'll be up against an attorney who's whole life centers around making people pay and feel like ****, but really, what is the worst they can do to me? they can't take my kids, they can't really take my car or a truck I am paying on curently right?

Just mess up my credit for a number of year. I'm had Charge offs before and cleaned my credit up over time twice before. How is this different, otehr than I am going to court and possibley being judged against?

 

is there a form to ask for an extension to find an attorney? I may go to legal help here in San Diego for thoseof us who can't afford an attorney.

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@Sued by Amex

 

You need to find out how long a judgment lasts in CA and if it can be renewed.  For instance, a 10-year judgment that can be renewed means the creditor has 20 years to get the money.

 

You need to find out if your income can be garnished due to the fact that you're self-employed.   Will you always be self-employed?

 

Judgment creditors can put liens on property, so you need to read up on liens.

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1. Yes other creditors will either lower your credit limit, or cancel your cards if you get a judgement. Questionable if you just have this account charged off, as I believe it is already charged off. They don't know about the suit against you, and it will only show if you get a judgement.

2. You need to elect arbitration in your 1. Answer, or 2. In a motion to dismiss and petition to compel arbitration from the start. If you engage in litigation, you could use your right to arb.

Arbitration can take anywhere from 6-8 months, to a couple of years. Depends on how many hearings you have, how many objection, and disagreements you have. They will do a time table for things like when all discovery must be in, hearing dates etc. in the beginning.

Yes they will settle for a lesser amount, and it will say on your credit report "paid, settled for a lesser amount"

For the best settlement, they would want it in a lump sum.

They will usually take payments, they will probably want more than you feel you can afford.

Part of arbitration you could negotiate a live able payment plan.

You could probably settle now, but they do have the goods on you, so they probably won't budge much on how much in payments they are willing to take.

If you do arbitration, it gives you a small amount of leverage in that they will not want to spend a whole lot of money, they would give more leeway in payments to get it out of arb.

It will cost them 2 k before you even get an arbitrator. Another 2-5k for each hearing. The more objections you have, the more hearings you have. California is the only state where they cannot be awarded the costs of arbitration should it go to the end.....unless they can PROVE you arbitrated in bad faith. It is not bad faith to elect arb, that's part of their contract.

You will end up paying this debt, arbitration is just a stradegy to give you a bit of leverage to get them to work with you.

If you want to do arb, I would file a "Motion to dismiss, petition to compel arbitration" in leiu of an answer, because it saves you the filing fees of an answer which can run 200.00 or more. I do not know if California charges for motions, they may.

Filing with JAMS should not cost you anything when you submit the paperwork, and they know you are from Cali.

There are many here that are not big fans of arbitration, especially in California, as the rules of civil procedure are pretty consumer friendly compared to other states.

Research the pros and cons of doing it both ways, and @calawyer and @Anon Amos should weigh in, they know the California rules much better than I do, and have helped hundreds of people here with their knowledge.

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@Sued by Amex

 

You need to find out how long a judgment lasts in CA and if it can be renewed.  For instance, a 10-year judgment that can be renewed means the creditor has 20 years to get the money.

 

You need to find out if your income can be garnished due to the fact that you're self-employed.   Will you always be self-employed?

 

Judgment creditors can put liens on property, so you need to read up on liens.

 

@BV80

I DO NOT owe any property unless  my toyota highlander is considered.

I intend on staying self emplyoed for the rest of my life.

and I am NOT RUNNING from this, I INTEND on paying this but need to do so on terms friednly to my budget, No as for the 10-20 years I don't intend on taking even 4. I want to pay this off ASAP, but again I am NOT running. So once the debt is paid within 4 years, as soon as it's paid it can theoretically last only 7 more years on my CR correct?

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1. Yes other creditors will either lower your credit limit, or cancel your cards if you get a judgement. Questionable if you just have this account charged off, as I believe it is already charged off. They don't know about the suit against you, and it will only show if you get a judgement.

2. You need to elect arbitration in your 1. Answer, or 2. In a motion to dismiss and petition to compel arbitration from the start. If you engage in litigation, you could use your right to arb.

Arbitration can take anywhere from 6-8 months, to a couple of years. Depends on how many hearings you have, how many objection, and disagreements you have. They will do a time table for things like when all discovery must be in, hearing dates etc. in the beginning.

Yes they will settle for a lesser amount, and it will say on your credit report "paid, settled for a lesser amount"

For the best settlement, they would want it in a lump sum.

They will usually take payments, they will probably want more than you feel you can afford.

Part of arbitration you could negotiate a live able payment plan.

You could probably settle now, but they do have the goods on you, so they probably won't budge much on how much in payments they are willing to take.

If you do arbitration, it gives you a small amount of leverage in that they will not want to spend a whole lot of money, they would give more leeway in payments to get it out of arb.

You will end up paying this debt, arbitration is just a stradegy to give you a bit of leverage to get them to work with you.

If you want to do arb, I would file a "Motion to dismiss, petition to compel arbitration" in leiu of an answer, because it saves you the filing fees of an answer which can run 200.00 or more. I do not know if California charges for motions, they may.

Filing with JAMS should not cost you anything when you submit the paperwork, and they know you are from Cali.

There are many here that are not big fans of arbitration, especially in California, as the rules of civil procedure are pretty consumer friendly compared to other states.

Research the pros and cons of doing it both ways, and @calawyer and @Anon Amos should weigh in, they know the California rules much better than I do, and have helped hundreds of people here with their knowledge.

 

Thank you @shellieh98,

in answer to your response,  I plan on paying this debt, I am NOT running from it, I owe and I accept that. Always intended on paying and paid more just before I was served yesterday.

I'm not too worried about losing any more credit cards if they close or lower limits but I just don't want them to demand it all at once and cause me more problems like amex.

 

In "2. In a motion to dismiss and petition to compel arbitration from the start."

Is that instead of the answer or AS WELL AS Answer?

I just want to make sure I do this right so I don't accidentally default. Will JAMS tell me what I need to do to file for ARB? and tell me what forms to fill for the answer?

Or should I just answer as well as "2. In a motion to dismiss and petition to compel arbitration from the start."

 

and what is Motion to Dismiss? To dismiss the debt? or Dismiss the court appearance?

 

When you say objections, is that me saying I object to something and want it worked out better? Or they object?

 

"many here that are not big fans of arbitration, especially in California,"

as in many on this board? Lawyers looking at what is happening? Spying ont he consumer and lsitening in? Or?

 

Thank you!

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@Sued by Amex yes 7 years and 6 months from the date it was charged off. Don't let it go to judgement, that will start a whole new entry in addition to the one there that says judgement. It will report for 7 years 6 months, but when it is paid, it will add paid to the line.

 

@shellieh98

ok you say don't let it go to judgement, but if I go to court or ARB it will get a judgement or a settlement correct? So in court you get judgement in ARB you can be judged eventually or Settleed or dismissed correct?

 

What I am asking is once the debt is paid, even if it was a judgement it only stays on for 7 yrs, 6moths once the deby/judgement is paid, correct? or does judgement do something different once it is paid off, it shoudln't saty longer than 7 years ne paid off.

 

I know judgement means much worse than settlement, so I'd rather not have that.

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No judging here, when I say you will pay, it's not because I think you should, or that you even owe it, it's only because they are original creditors, they have everything they need to win. That's all. The question is how much can they get. Look they make money hand over fist with late fees, interest, so I say you really don't owe everything they say anyway. If you can come out of this paying the least amount, then it's great!

No JAMS will not tell you anything until you initiate arbitration. They have nothing to do with the court case. You have to get it out of the courts juristriction, and you do that by the motion.

The motion is instead of an answer. You could do both, but there is no reason to pay the 200+ it will cost to answer the suit. IF the motion is denied, you will have additional time to answer.

Steps are outlined in the thread posted in the arb forum.

1. Send a letter to the plaintiff that says you are electing arbitration per the credit agreement to settle this dispute, you elect arbitration with JAMS, it is the proper forum.

2. Do an online search for the credit agreement. It has the terms, and the part about arbitration.

3. Write up your motion, file it with the court BEFORE YOUR ANSWER IS DUE, include a copy of the credit agreement, and the letter you sent the plaintiff.

4. Send the plaintiff a copy of everything you filled with the court.

You have to file a proof of service with the court, and include it with the stuff you send the plaintiff. Send everything to the plaintiff certified mail return receipt requested.

A sample of the motion you could use as a template is posted in a lot of threads, I will see if I can link it in a moment.

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The motion is instead of an answer. You could do both, but there is no reason to pay the 200+ it will cost to answer the suit. IF the motion is denied, you will have additional time to answer.

Steps are outlined in the thread posted in the arb forum.

1. Send a letter to the plaintiff that says you are electing arbitration per the credit agreement to settle this dispute, you elect arbitration with JAMS, it is the proper forum.

2. Do an online search for the credit agreement. It has the terms, and the part about arbitration.

3. Write up your motion, file it with the court BEFORE YOUR ANSWER IS DUE, include a copy of the credit agreement, and the letter you sent the plaintiff.

4. Send the plaintiff a copy of everything you filled with the court.

You have to file a proof of service with the court, and include it with the stuff you send the plaintiff. Send everything to the plaintiff certified mail return receipt requested.

A sample of the motion you could use as a template is posted in a lot of threads, I will see if I can link it in a moment.

 

"You have to file a proof of service with the court, and include it with the stuff you send the plaintiff. Send everything to the plaintiff certified mail return receipt requested."

 

Proof of service to whom?

Let me clarify:

1) send letter to Plaintiffof opt to ARB with JAMS, sent certified mail with return receipt.

 

2) Write up your motion, file it with the court BEFORE YOUR ANSWER IS DUE, include a copy of the credit agreement, and the letter you sent the plaintiff.

does the letter included for court include the returned receipt or just a copy?

 

3) The send ANOTHER letter to plaitiff a copy of everything you filled with the court.(IE motion to dismiss and petition to compel arbitration?)

 

4) "file a proof of service with the court" what proof am I filing with the court? Proof that I sent the letter to plaintiff to do ARB?

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If arb goes the the end, and you don't settle there, the arbitrator will give Amex an "award". The plaintiff must then take it back to court to turn that into a "judgement". You could still settle even then before they took it back to court.

Here is a sample motion. I have one out there but can't find it at the moment, this one is essentially the same. But the correct verbiage title is a motion to dismiss, and petition to compel priviate contractual arbitration. ( having trouble linking)

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@Sued by Amex

 

I wasn't accusing you of running.  You asked how this was different other than going to court and judgment rendered against you, and I responded with what might happen if there were a judgment.

@BV80 I wasn't saying you were accusing me of anything was just clarifying as sometimes people don't read the whole thread. that's all. I'd already stated I wasn't running and planned on paying, just want to be able to pay in a way that's affordable and best opportunity for me to save some credit or at least have the least amount of damage for the shortest time. IE 7 years.

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@Sued by Amex

 

I just wanted to make sure that you knew I wasn't accusing of anything.  :-)

 

That being said, you have the choice of compelling arbitration or fighting this out.  I believe you said that the amount of the debt is around $23k.   Amex might follow you into arbitration for that amount.

 

CA has some very debtor-friendly rules and laws.   Even OC's have to abide by those laws. 

 

 

@calawyer

 

@Anon Amos

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