Why I’m Grateful I Got Sued By American Express and What You Can Learn From My Experiences
by Nathan Rabin
An unexpected ring on my doorbell awoke me early one Sunday morning and I stumbled bleary-eyed to my front door and was greeted by a tall, strapping, sunglasses-wearing sheriff with an incongruously chipper expression clutching a sheath of papers.
“Are you Nathan Rabin?” the sheriff asked brightly before I responded affirmatively and he shoved a document in my hand reading, “American Express Vs. Nathan Rabin.”
“What was that?” my wife asked as she shook awoke.
“I think I just got sued by American Express.” I responded numbly, still trying to process what had just happened.
My psyche had a bifurcated response to this unexpected and unwanted visitor, this uniformed portent of doom. The logical, rational part of my brain processed the morning events as unfortunate but not entirely unexpected development. I had stopped paying my credit card bills. My credit card company sued me. It wasn’t that difficult to understand. The lizard part of my brain, however, was convinced I was doomed to live out my days in a debtor’s prison. Who needed logical evidence? A sheriff. Legal documents. A court case. Scary prosecuting lawyers. In my panic-stricken mind, it all amounted to a future locked in a Dickensian prison for perpetuity.
I flashed back to the phone call seven or eight months earlier where I had agreed to go into a debt consolidation program to handle what at the time seemed like an impossible and unmanageable level of debt. It’s telling that what I remembered most vividly about the conversation where I agreed to enter the debt consolidation program was not what the agent at the other end of the line but rather how he said it. I remembered less the specifics of the programs I was about to enter into less than the avuncular, reassuring tone in his voice that implicitly said, “Everything is going to be all right. You got yourself into a hell of a mess but we’re going to help you get out of it. It’ll be tough but you’ll be all right and we will protect you and make you feel safe.”
In the moment, I desperately wanted to believe that what the man said was true and that if I committed myself to the program and executed it honestly and faithfully then after three years in a scary and perilous and exceedingly expensive wilderness and about twenty thousand dollars in fees I would emerge at the end of the journey debt-free and ready to take control of my financial life.
As outlined by the nice-sounding man on the other end of the line, the road ahead of me would be incredibly difficult. He was not offering to settle my accounts quickly or cheaply. Even if I did everything the debt consolidation program asked of me, my credit score would be decimated. I would have to give up all of my credit cards and, in a flagrant violation of the American way of life, only use money I actually possessed. I was told that debt collectors would stop at nothing to get to me so I could expect a never-ending deluge of calls and letters from debt collectors and, yes, even the possibility, however faint, of legal action somewhere down the road.
The man on the other end of the line was not promising to pay off the accounts for pennies on the dollar. No, even if I did all that was asked of me, I would end up paying well over half of what I owed, albeit—and this is the part I really should have thought a whole lot more about before I took the plunge and signed on to the program—primarily to the debt consolidation group for legal fees and negotiating fees and structuring fees and any number of hidden costs I probably should have paid a lot more attention to at the time if I hadn’t been so hypnotized by the comforting gentleness in the man’s voice.
The journey that the debt consolidation program offered wasn’t perfect. It wasn’t ideal. Hell, it wasn’t even particularly good. From the outset, it was apparent that these people were parasites. I just hoped that they were parasites that would act in my best interests, that they would be bullies that would protect me from other bullies. I saw the debt consolidation program as the lesser of two evils. Sure, they were vultures benefiting from the naïveté and desperation of the poor and stressed but, at the very least, they had to be better than credit card companies and debt collectors, right? That’s setting the bar awfully low. I had no idea at the time how greatly I had over-estimated the integrity, honesty and morality of debt consolidation industry.
I had no one to blame but myself for my plunge into insolvency. In a fit of manic ambition in the summer of 2010 I bought a home, moved in with a girlfriend who would become my wife and signed a contract with Scribner to write a book about fan subcultures that would eventually be called You Don’t Know Me But You Don’t Like Me. It was a book I wasn’t sure I had the skill set or journalistic chops to write and the advance was modest enough that financially the book would be a break-even proposition under the best of circumstances once the considerable costs of touring the country following a band and going to myriad festivals and cruises were included. Yes, cruises. Weep not for me, reader, for I went broke in the stupidest, most self-indulgent and moronic manner imaginable. I halfway convinced myself that for my book about fan subcultures I needed to go on the Kid Rock Chillin’ The Most Cruise and Jam Cruise, that these were not ridiculous, unnecessary extravagances but rather essential sociological experiences related to my study of fan subcultures it was crucial for me to document.
So in 2010 I went on cruises and traveled to festivals and followed Phish for an entire summer as my bank account dwindled, my credit card debt accelerated and a crippling, rare, debilitating and uncharacteristic bout of writer’s block and professional insecurity resulted in me being unable to get anything usable out of the vast majority of the experiences from my first year of researching the book. A book I had set out to finish in a year now looked like it would take at least two years to research and write, and cost well over twice what I had originally anticipated. The payday for completing my book that would solve so many of my financial problems sank further and further into the future until it began to seem theoretical at best.
I had always prided myself on being responsible and well-organized but as the book I struggled to write slipped away from me I grew careless and overwhelmed. I was overcome with guilt and shame over having wasted so much money with so little to show for it. I felt like I had let down my editor and my agent and my publisher and the people I was writing about. It wasn’t until I forgave myself for fucking up so badly and so consistently that I gained the strength and focus to finish my book and begin the process of rebuilding my professional and financial life.
So I justified the expense, hassle and restrictions of the debt consolidation program in part as a steep if reasonable cost to pay, karmically speaking, for having been so careless in the research of my book. It would be tough, but what in this world isn’t? I just wanted to wipe the slate clean, to atone for my financial sins and be granted absolution. This was about more than just money: it was a spiritual yearning, a need to make what had gone terribly wrong right again.
When I enter the debt consolidation program late in 2011 I owed something in the area of thirty-six thousand dollars on six or seven credit cards against a life savings of a few thousand dollars, mostly wrapped up in the stock market, a losing game I never quite had the heart to quit playing. Between my mortgage, bills and living expenses, I barely had enough left over every month to pay the minimum due on each of my accounts, which made making any kind of substantial dent in that thirty-six thousand dollars damn near impossible.
The debt consolidation program offered to resolve my 36,000 dollar debt for 20,000 dollars over a three-year program that began, tellingly enough with the debt consolidation paying itself well over six thousand dollars for services before it even considered paying off any of my creditors. The idea was for me to stop paying off my creditors immediately so that after a year and a half or two years or two and a half years they’d be so desperate to recoup their money that they would settle for accepting twenty to twenty percent of what they owed. In the meantime my credit would be decimated, I’d be hounded by creditors and I would no longer be able to exercise my god-given American right to spend money I didn’t actually have.
Signing on to the program kicked off a solid year of living from paycheck to paycheck, incurring thousands of dollars in overdraft fees and bounced checks and more weeks than I care to remember when the balance of my checking account averaged somewhere in the area of negative four hundred dollars. Financially speaking, I was in quicksand: though the debt consolidation program diligently subtracted a little over five hundred and fifty nine dollars the thirteenth of any month, none of my credit card accounts were being paid off. I was falling behind on my other bills as well. I paid my mortgage later and later each month until I started to engender late fees for the first time. I had always prided myself on being financially responsible but now in the eyes of the world I was a deadbeat, a loser, a bum.
In a capitalist society we use money and status and class to keep score. By that criteria, I was a zero. I was substantially less than that. True, I had been a staff writer for The A.V. Club for fifteen years and was in the process of finishing and publishing my fourth book but American Express seemed patently unimpressed with my literary pedigree. They just wanted their fucking money and weren’t about to relent until they had it.
The debt consolidation program had promised to return control of my economic life to me for a steep fee. Instead, I felt more powerless and vulnerable than ever before. I came to see money as a poisonous, destructive force. I couldn’t imagine a future where I wasn’t constantly strapped, where I didn’t have to keep selling off my belongings to keep the lights on and food on the table. It was as if this life of perpetual financial panic was the only one I had ever known, that I’d never experienced a reality where on some days my only liquid assets were literally the spare change in the Gatorade jar at work. I began to feel as if my problems followed me around like Pigpen’s cloud of stink, that people would look at me and think, “Wow, that guy is completely fucked!” without even needing to know the specifics.
My mind is flooded with vivid snapshots from this period in the financial wilderness, like having a charge for a beer and a slice of pizza get declined at a pizza place in Brooklyn because the credit limit on the one card I still used on emergency occasions had shrunk to under seven dollars because my credit score was so awful or having to call my wife with a mouth full of Novocain and ask if she could pay for a double root canal with her father’s credit card because my debit card had just been declined. On Valentine’s Day.
It wasn’t supposed to be this way. When the sheriff showed up at my front door and completely upended my sense of security I was only five years removed from receiving a six-figure advance for writing a memoir for Scribner at 31 and only three years removed from traveling the country sharing my heartwarming tale of triumph over adversity in connection with the release of said memoir. When I spoke about how my obsession with pop culture helped me overcome a childhood of abandonment, institutionalization and despair to become a successful writer I felt like a fraud, since all happy endings are provisional, fragile and, on some level, illusory. They’re mirages that disappear in a poof more than sturdy homes to dwell in for perpetuity.
I was peddling a tale of triumph of adversity while convinced that I would forever be mired in adversity, that adversity had become my natural state. It’s hard to buy into yourself as a success story when, deep down, you fear that your success is neither merited nor real. It’s even harder to think of yourself as a success when you’re being sued by a credit card company, are mired in debt and hand-cuffed to a dodgy debt consolidation group for the indefinite future.
Being sued played havoc with my fragile self-esteem and sense of security. It felt as if the bottom had fallen out and that I had compounded the mistake of getting so deep into debt with the even greater error of hiring a debt consolidation group. I once viewed the debt consolidation group as my savior. Now I suspected I needed someone to save me from them.
Like many depressives, I engaged in apocalyptic thinking but when I told my therapist about getting sued by American Express her response surprised me.
“Yeah. The economy sucks,” she responded matter-of-factly in a way that quietly put everything into perspective. This was not some special punishment the universe had created solely for me. I was not being unduly persecuted by fate.
I had simply gotten in over my head like so many people before me. I was not alone. I was, to use a phrase that appears on the podcast often, one of many. Seemingly everybody was hurting financially. They just didn’t talk about it publicly, especially if that hurt took the terrifying, dramatic form of sheriffs and court cases and legal documents.
It’s easy to feel isolated and alone and singled out when a massive international credit card company files a lawsuit against you but I was never alone. I took enormous comfort in that.
In one of the more Kafkaesque developments of my case, I had to pay two hundred dollars to the city just to file legal papers defending myself: It cost me a big chunk of change just to show up in court to defend myself for being so broke I couldn’t pay off my creditors any longer.
For many Americans, debt is part of everyday life. When that sheriff showed up at my front door debt went from being an unfortunate but eminently bearable abstraction to a terrifying, concrete reality, from a constantly shifting and morphing sum of money that I would probably have to pay off at some point, maybe, in the future, to a terrifying reality that could very easily lead to my wages being garnished and my possessions being re-possessed. The not-so-subtle intimation of the sheriff’s visit that ominous morning was that the state of Chicago would take my shit by force if necessary because I had gotten myself into that bad of a bind.
During my first appearance before a judge at The Daley Center in Chicago I endured a scary gauntlet of metal detectors and case numbers and a glowering bailiff who broadcasted her contempt for humanity with every fiber of her being and a judge who looked exactly like Rod Blagojevich and regarded my feeble attempts to defend myself with the debt consolidation group’s help with an all-too-understandable combination of pity and irritation.
Over time I came to appreciate the banal comedy of the courtroom. It felt like I had a five-episode arc as a hapless defendant on a mediocre 1980s legal sitcom about a corrupt Chicago judge and the kooky courtroom he presides over. The wood paneling of the courtroom, the judge who looked exactly like Rod Blagojevich and spoke in a Chicago accent as thick as a slice of deep dish from Lou Malnati’s, the quietly enraged bailiff with her mouth fixed in a permanent frown, her eyes locked in a permanent scowl: it was a very Chicago kind of tragicomedy and I was just grateful that I was but a visitor and not a permanent fixture, a guest star and not someone locked into this dreariness day in and day out.
The debt consolidation group I had signed up with had “Law” in its name but that seemed to be the extent of its connection with the legal profession. During my dealings with the debt consolidation group, the phrase, “Now I’m not a lawyer, but” popped up so frequently and with such dispiriting predictability that it threatened to become a catchphrase.
It wasn’t until after I had been sued that I came to the troubling realization that it was in the debt consolidation group’s best interests to keep me in debt as long as possible. As long as I was still in the system and wrestling with outstanding debts the company could continue to collect fees but the moment I was debt-free the money train would end and those delicious charges would disappear. I had signed on with the debt consolidation group thinking it was the lesser of two evils. I was wrong. I thought I needed them to protect me from credit card companies. It turned out I needed someone to protect me from the debt consolidation company.
So I started opening the letters debt collectors sent me and was pleasantly surprised to find them filled with exceedingly reasonable offers to settle my outstanding debts for twenty five to thirty five percent of the original total. At this point a strange reversal occurred as the debt collectors I had considered the enemy I now came to see as allies with the same goal as me: ending my debt as quickly and cleanly as possible. I similarly came to see the debt consolidation group as a formidable obstacle intent on eking every last penny out of me and keeping me in debt as long as possible.
So I started calling up the debt collectors and settling with them outside the debt consolidation program, which wouldn’t even speak to many of my creditors until much further along in the process (i.e after the debt consolidation group collected all of its own fees). Little by little, I started scrounging up enough money to start paying off my creditors one at a time. It was incredibly liberating paying off a six thousand dollar debt for two thousand dollars. I began to see a sliver of light in a vast eternity of darkness.
I raised a few thousand dollars by selling off my stocks, received some timely aid from my wife’s family and received an additional windfall when we got married. I sold everything I could. Best of all, I was no longer spending tens of thousands of dollars researching a book I was, by that point, well on my way to finishing. I sure as shit wasn’t going on any more cruises, for professional reasons or otherwise. I was no longer careless. I was deliberate. I was focused.
I discovered that I was just as capable of settling with my creditors as the debt consolidation group was. There was no art or science to it, just basic common sense: it was ultimately just a matter of either accepting the offer on the table or proposing a settlement somewhere in the 25 to 35 percent range. I was overjoyed to finally be paying off my debts. It felt as if my financial karma was finally spinning in the right direction. The debt consolidation group warned me that if I settled with American Express too quickly it would make me a much more appealing target for lawsuits from my other creditors but if I paid off all my other creditors that would obviously not be a problem. I diligently began pulling myself out of a deep mountain of debt, one credit card account at a time until eventually the only account I had left was American Express.
I had presumably paid the debt consolidation group somewhere between five to eight thousand dollars for its negotiating prowess and legal expertise but if I had scrawled, “Credit card companies are dumb and bad and money should belong to everyone” on a piece of cardboard paper in red crayon and embellished the statement with flowers and hearts it would have represented only slightly less impressive a legal case than the one my debt consolidation group prepared for me. The judge—who I’m still halfway convinced actually somehow was Rod Blagojevich and not an uncanny lookalike—stopped just short of rolling his eyes and making the universal gesture for jerking off whenever I would stand in front of him and mumble the two or three sentences the debt consolidation group told me to say each time I’d appear in court for some minor matter.
My misadventures in penury ended not with a bang but with a whimper. When I received the final payment for a book I’d written about musical subcultures I was able to call up the opposing lawyers and settle immediately for seventy-five percent of what I owed (not a great deal, sure, but at that point I just wanted the experience to be over). The debt consolidation group had assured me that if I was willing to fight it out in court for five or six months they might be able to knock off five hundred dollars off that amount (while in the process collecting well over five hundred dollars in fees for themselves in the process) but at that point I just wanted the headache to end.
I look back at my descent into debt with incredible gratitude rather than bitterness. My relationship with money is a lot healthier and more functional now. I take profound satisfaction in being able to pay off my bills. I appreciate money like I never did before. I’m even grateful that the debt consolidation group set me on the road to being debt-free, even if I ended up doing most of the work myself.
Empathy is a wonderful gift. I found that my anger subsided when I empathized and identified not just with the other people being sued by American Express (of whom I imagine there are a great deal) but also with the opposing lawyer and even the credit card company suing me. The lawyer with the bad hair plugs did not have some special vendetta against me. He was just a schmuck with a bad job and cheap suits making the best of the shitty hand life had dealt him. And while I came to take a dim view of capitalism and particularly credit card companies during my misadventures in penury and extreme debt you ultimately can’t fault a credit card company for acting like a credit card company or a debt consolidation group for acting like a debt consolidation group.
I can’t even be mad at the people who worked for the debt consolidation group: they were just cogs in a machine that exploits the vulnerability and naiveté of the desperate and strapped. That empathy extends to not beating myself up over wasting a massive amount of money on the debt consolidation program. I was naive and overwhelmed and I made bad decisions out of fear and desperation. There’s no crime in that unless your ferocious inner prosecutor decides to make the case and after my experiences with American Express and the debt consolidation group I’m eager to avoid legal entanglements of any kind, be they metaphorical, psychological or symbolic.
Nathan Rabin is a previous guest on The Mental Illness Happy Hour, a staff writer for The Dissolve, the new film site from Pitchfork Media. He was previously the head writer for The A.V Club, a position he held for sixteen years. You can help him further escape a life of destitution by buying his new book You Don’t Know Me But You Don’t Like Me (preferably through the Amazon link on this site!)