What is Debt Arbitration? By Paul Ritz Many people feel that they are sinking in debt and do not see any way to get out of it. Although the economy has been making progress, many people are still feeling the after-effects of the 2008 economic crises.
More People are Looking for Debt Arbitration Services Levels of over-indebtedness in America seem to have reached an all-time high. A lot of people are currently struggling to meet their monthly commitments and are living paycheck to paycheck. Companies offering debt arbitration services have seen a marked increase in clients.
What is Debt Arbitration? This is where a company assists you by negotiating a new repayment agreement with your creditors. They will generally attempt to get your creditors to pardon a portion of your debt so that your repayments are more manageable and to allow you a chance to repay your debt.
Who Qualifies? Basically you can apply for debt relief if you are not able to manage your minimum monthly installments. It’s not a way to wiggle out of your responsibilities though – it is meant for those that can genuinely not manage any other way. You can usually qualify for a financial hardship program if you have recently gone through a divorce, suffered a job loss or had your hours reduced or experienced an unexpected medical emergency.
Why Apply? If successful, your overall debt will be reduced – you will have a more affordable payment plan and won’t have to worry about not being able to meet your commitments. Having a professional arbiter will increase the chances of you getting a better deal and will make the whole process go more smoothly.
Why Not? There are also disadvantages – your credit rating will be negatively affected; you won’t be able to use your credit cards; you will have to pay fees for this service and it is likely to take a long time before the debt is repaid.
What to Look for in a Debt Arbitration Company The solution will only be as good as the company you choose. You need to choose a reputable, established company or you risk making your financial situation even worse. 1) How long have they been in operation? A company that has been around for some time is more stable and will have better contacts and relationships within the credit industry. They will also know how to approach the situation correctly and will be able to get the best possible deal.
2) Are they accredited? Accredited companies have had their competency validated by an impartial source such as the Better Business Bureau. Members of a professional association will also be held up to higher professional standards and will have a support network that enables them to keep abreast of new developments. 3) A good reputation – How a company has behaved historically is a good indication of how they will behave moving forward. Whilst a company can pull up its socks, it is better to avoid companies that have a reputation for bad customer service or those that are considered a little dodgy. If you feel that the company is dodgy, you might find that your creditors will as well. If the creditors do not feel that your debt arbitration company is reputable, they will probably not look favorably on their proposal. 4) Realistic promises – a company that promises that your credit rating will be unaffected or that promises a fast way out of your debt problem should be avoided. The process is going to be a lengthy one and there is no way that your credit rating will be unaffected. The only way to maintain a good credit rating is to manage your debt properly – applying for debt relief means that you are not able to do this. 5) A company that works with you – you are going to need to discuss your financial affairs with these people in a non-judgmental environment. You need to feel comfortable enough to discuss ways to get out of the situation you are in. They should be willing to help you – not only with this situation but with advice on how to avoid future problems. 6) Complete Transparency – you need to deal with a company that is completely transparent from the start. They should be upfront about the fees that you will pay, they need to be willing to explain how the process will actually work and, once the deal is in place, and they need to be completely transparent about what payments they make and exactly what happens to the money that you pay over to them. 7) After sales service – Will you be able to track your progress along the way and get an idea of outstanding balances, etc? Some companies have systems in place that allow you to access details of your balances online – allowing you to see your debt going down every month. Even if they don’t offer an online service, you should be easily able to request statements and balances.
Your Responsibilities with Debt Arbitration It is your responsibility to be as open and honest as possible from the outset. That way the company can do its best to get you the best deal. Once a deal has been made, you need to be certain that you stick to the repayment arrangement strictly – if not, you will be worse off than before. You should also try to make ad hoc payments in order to bring your debt down faster and learn to manage your credit better so that the situation is not repeated in future.
1-888-703-4948 www.nationaldebtrelief.com