Are you getting into debt? Are you unable to find a way by which you can repay your debts and give a boost to your credit score? Debt arbitration is a good process to get this problem solved. As the name suggests, debt arbitration is done with the help of a third party acting as the arbitrator. It is often helpful for people who are stuck in huge debts and are struggling to be debt free.
What is debt arbitration?
Basically, arbitration is a process used to settle disputes outside courts. In this process the two parties (debtors and Creditors) place their cases in front of a third party. The third party delivers the decision based on the facts, which both the parties must follow. This third party is the arbitrator. This process helps a debtor to settle the debt with the creditor.
The debt arbitrator will help the debtor with a repayment plan which will be acceptable by both the parties. An arbitrator works on behalf of the debtor. A good arbitrator negotiates with the creditor to reduce the debt amount by 40-60% so that the debtor can pay it.
You must realize that a creditor wants his money back and he also does not want to visit the court for collecting money. Hence, even if he gets half of the money after negotiation he will not deny it. The arbitrator works on this point and helps the debtor to repay the debt within a considerable period of time.
Arbitration could be sought by the debtors to reduce any kind of debt, such as medical bills, utility bills, lawsuits, invoices, lien and many more.
Tips towards successful debt arbitration
Here are some suggestions you can follow:
• Select the arbitrator with utmost care: First of all you must be careful regarding the arbitrator you select. Do not believe in anybody who makes false promises and coaxes you into believing that arbitration is easy.
• No guarantee of debt reduction: Do not give away all the information at one go. In reality there is no guarantee that a creditor will agree to reduce the debt. You and the arbitrator can try to do it and it will depend on the negotiation skills of the arbitrator as to how much your debt can be reduced.
• Be ready to compromise: You have to remember that when you opt for arbitration, you must be ready to compromise. Arbitration could be entered either voluntarily or by court order. Do not go to negotiate with the creditor with any kind of prejudice. Accept if the creditor offers a deal, even if it calls for a little compromise.
How do you choose a debt arbitration company?
• Go for a recognized debt arbitration company: When you go for arbitration, it is advisable that you opt for a recognized company. Try and do some research on the company, get feedback from people who have used their services and so on. Find out about the cost of their services and see whether or not you can afford to pay them that much.
• Do not choose companies with pretty big claims: Another important thing you must find out before getting the service from a company is whether or not they make pretty big claims of reducing your debt magically. Normally the companies which claim that they can reduce your debt fast are not to be trusted. It is a slow process.
• The company must have IAPDA debt arbitrators: You must also check whether or not the company you are selecting has IAPDA certified debt arbitrators. Such arbitrators are knowledgeable about who to approach, when to approach and how to proceed with the arbitration process.
• The company must be a member of BBB and Chamber of Commerce: Lastly, the arbitration company you are considering must be a member of the local Chamber of Commerce and the Better Business Bureau. If the company is a member to these organizations, then it is not recommended to work with them. The services provided by the company will not match the quality standards.
Arbitration works as a good alternative to legal hassles in case of delinquency. When it comes to selecting a debt arbitration company, always go for the one which is committed to deliver the best possible client service and support. Be wary of the fraud ones which can consume all your money.