corporate AMEX and bankruptcy

sosilly81

Hello
I am considering bankruptcy.
I have a corporate amex charge card which I use for travelling with work extensively. It's in my contract of employment that I need one of these to do my job.

The card has my name and my employers name on it. I get billed every month and put in an expense claim to cover the costs.

If I go bankrupt will I be able to keep this card? Because if not I'd lose my job. In which case I will try the IVA route.

Has anyone been in a similar position or know the likely outcome?

Many thanks

Cobalt77

Well, if you are actually paying the bill yourself directly and then getting reimbursement, it looks like the card is in your name personally (if it were a true corporate card, your company would be billed directly)

If it were a credit card you would probably not be able to keep this card. However, Amex is a rather unique case in that it's a charge card.

So, you actually need answers to 3 questions:

1. Would Amex allow you to keep the card if you went BR? (Probably not, as they would consider you a higher risk. The only exception could potentially be if your company agreed to act as a guarantor)
2. Would the OR allow you to keep the card? (Well, as it's a condition of your job and you only use it for work expenses you have a very strong case - my gut feel says a sympathetic OR would let you keep it provided it was only used for work expenses and you provided statements on request)
3. Would your company allow you to keep your job if BR? (Unless you are working in financial services, accountancy, law etc, you should be okay - unless it's written into your contract of employment you can't be BR)

So, the pivotal question is the first one - it all hinges on whether Amex will let you keep your card. And this will really depend on how valuable Amex values their relationship with your employer.

Next questions:

1. Without naming your employer, are they a large organisation with lots of staff who use Amex cards?
2. How valuable are you to your employer? (i.e. if you were to explain your situation to them, would they perhaps help you with your approach to Amex?)
3. Is there any chance your company could issue you with a normal "corporate" Amex/other charge card which they pay directly? (this would be a brilliant option for you, as it would potentially solve all of your problems)

HTH

sosilly81

Hi Cobalt,

Thank you so much for your advice.

To answer your questions:
1. The employer is a worldwide organisation with about 100000 staff. In my particular division there are 300 of us. Maybe about 50 hold these cards.

2. I like to think I'm valuable. I'm a top performer in my role and it would take 2 years to train someone else. but nobody is irreplaceable. Add to the mix that I received a written warning in September for misusing the card. (GAMBLING which got me in this message. )

3. I seriously doubt it. They are pretty inflexible with procedures. And it's all sap based expense claims.

Not looking good. I have a iva application in progress but I think apart from this bankruptcy would be best bet. My girlfriend is devestated as we were planning a baby which we can't have now and she's 37. If I do the iva it will be 5 years and her biological clock is ticking. Hence bankruptcy may save us a couple of years.

tiggerbodhi

We had these some time ago, the full debt is with the Company, just Amex send you the bill monthly, some proof to see if it is "yours" is to look on Equifax/Noddle to see if it appears.


I do know that if you fail to pay it, Amex chase the company not you, so its not you having credit it is the company you work for.

sosilly81

Thanks Tiger
Sounds promising. Although my mate at work is always late paying and amex always call his work number to chase.

Cobalt77

tiggerbodhi wrote: »

We had these some time ago, the full debt is with the Company, just Amex send you the bill monthly, some proof to see if it is "yours" is to look on Equifax/Noddle to see if it appears.

I do know that if you fail to pay it, Amex chase the company not you, so its not you having credit it is the company you work for.

This is the confusing part. To clarify, sosilly81 do you actually personally pay the monthly Amex statement from your own funds and then claim it back on expenses, or do you pass the statement over to your company and they pay Amex? Also, can you remember if you ever signed any kind of Amex application or did your company just "sort out" a card for you?

The reason I ask is I initially thought the same as tiggerbodhi, but "corporate cards" are usually billed directly to the company who then settles them - whereas you appear to be paying the bill then reclaiming it.

However...... it may be that Amex, as a charge-card, works in a different way.

If you can confirm the card is definitely a corporate one and you have no personal liability, then you are home and dry. Reasons:

1. If it's a corporate card, there is no reason to even tell Amex about any personal BR (unless you have signed any kind of agreement with Amex to the contrary) and Amex won't credit check you as it's a corporate account
2. Once you explain this to the OR, the OR shouldn't be remotely interested - as the card is simply being used to cover expenses relating to your employment
3. Equally, there is no reason to mention your BR to your employer - unless your contract of employment dictates otherwise

If I were in your position, I would try to get something in writing confirming you simply have a corporate card which is exclusively used for your employer's business expenses. Then, if you do go BR, you have something you can send the OR which should be enough for them to totally ignore the Amex card.

Hypothetically speaking, if it were me, I may perhaps contact my employer's personnel/accounting department and say to them something like:

"I'm in the process of getting a mortgage/re-mortgaging. In order to work out how much the lender will let me borrow, they will be looking at my outgoings to determine my affordability. Is there any way you could put something simple in writing just to confirm the Amex card is a corporate card which is only used for business expenses and isn't my own personal card?"

Ask them to put this on letter-headed paper and address it to you (your reason is: "I'll be using an independent mortgage broker, and so we don't know who the lender will be yet")

But, you'll need to be sure you aren't personally liable before asking for this. If you are personally liable, there is a high possibility the OR would get the Amex account closed. This why you need some kind of documentary proof confirming it's a company card, otherwise the OR will start investigating - which may open up a can of worms.

HTH

sosilly81

Thanks again cobalt.

I just rang American express who confirmed there is personal liability on the card.

So I guess I'm screwed.

sosilly81

So in a nutshell. I'm torn between bankruptcy and iva.
I have no assets except for a 1600 pound car which I would be unlikely to lose as I need it for work. Therefore BR is my preferred choice but obviously don't want to lose my job, hence looking at IVA.
But if I take the IVA route is it the same story with the amex anyway?

silvercar

There is a piece missing in this jigsaw.

Amex require a reasonable income and an exemplary credit record, I can't see any company that requires its staff to hold an Amex not having come across Amex refusing to issue a card with personal liability to a potential or existing employee.

Either the company must have some leverage with Amex (maybe issuing cards with no personal liability to some people) or have an alternative card acceptable.

It makes no sense for Amex to be effectively able to dictate who works for the company.

Cobalt77

sosilly81,

That's a bit of a pain, and I wonder if all the other staff are aware they have personal liability for the company's expenses debts? (not really an issue in the "old days", but now dangerous as a lot of well known companies have become insolvent recently)

In fact, I'm not even sure it's legal for any company to insist staff must accept personal liability for corporate debts (expenses or otherwise) as a condition of employment?

The usual practice is either for an individual to pay expenses personally (by own cash, credit or debit card) and then claim reimbursement from the company or to have a "company" credit card - in which case the individual charges business expenses to the card and the company ultimately pays the bill directly.

Given your situation, it would be wise to find out if your company can legally insist you must only use one method of payment for expenses which exposes you to personal liability, as opposed to you paying these business expenses by any other means (cash or debit card) and then claiming reimbursement?

My gut feeling is they can't. If you can get this confirmed by a solicitor / employment lawyer / trade-union expert it places you on a more solid footing, as your company would be risking an unfair dismissal/constructive dismissal situation - and really, it's fundamental to your decision of whether to go BR vs IVA.

If you have home or car insurance, check if you are paying for legal expenses cover. This usually gives you free telephone access to a qualified specialist solicitor. If you are in a union or have a trade body, they will sometimes provide free advice too. Finally, most solicitors will provide 30 minutes free advice if you ask for it.

I just had a quick Google for "30 minutes free legal advice", and this employment law firm came up on the first page of results: http://www.setfords.co.uk/services-for-individuals/employment-law/free-30-minute-employment-law-consultation/

For clarity, I have absolutely no connection of any kind to this firm - nor am I recommending or endorsing them - so do your own research. It's just that as your situation is quite unusual, it would be prudent to get advice from an expert who specialises in this kind of complex employment law. Since you have a (relatively) straightforward legal question, it should be something an experienced employment lawyer can answer in a few minutes - and certainly within your 30 "free" minutes.

Once you have an expert opinion, it will make your BR vs IVA decision a lot easier (then again, I'm not an expert on IVAs, and you may be equally stuffed with the Amex card if you go down the IVA route: http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Individualvoluntaryarrangement/IVAcredit.aspx )

My situation was similar in some ways to yours (aside from the gambling bit, lol). I decided to go BR because I wanted to get back on track as fast as possible, and both BR and IVA tend to ferck up your credit rating in a similar manner.

As you probably know, if you go BR and have no appreciable disposable income at the end of each month ( < £20 ) then you won't get an IPA. And if no IPA is put in place before you get discharged in 12 months' time, then you'll have dodged the bullet and won't need to pay a penny back to your creditors ever. In fact, some people choose to cut their overtime/reduce hours/take a lower paying job/become a student/go on the dole for 12 months to avoid getting an IPA. The very worst you'll get under BR is a 3 year IPA, which still shaves several years off an IVA.

If you do decide to go BR, be aware you may also get a BRU extending some of the bankruptcy restrictions beyond 12 months if gambling was the reason for your BR (e.g. if you did get a BRU, you couldn't be a company director, borrow more than £500 without telling the lender you’re bankrupt etc while the BRU was in place. More info here: https://www.gov.uk/bankruptcy/restrictions )

Based on the brief information you've provided, a BR could be viable if you are able to pay your expenses by another method (cash or personal debit card) and then reclaim them - or if your company gave you a "proper" corporate credit card.

But I cannot stress enough the importance of getting as much solid personalised advice as you can before making any decisions of this nature. In addition to getting legal opinion, also talk to StepChange and/or National Debtline (both are totally free services)

Hope that gives you some more food for thought. In the meantime, I'll send DebtDoctor (one of our resident experts: http://forums.moneysavingexpert.com/member.php?u=223640 ) a PM to see if he has any thoughts about your situation.

HTH

JCS1

Many years since I was involved in corporate AMEX admin for work, but the ones we had were joint and several liability between the employee and employer