Arbitration question

[DYLAN150]

I have been reading another site about arbitration. What's the advantage using this? Looks costly. Looks very costly for the creditor. Could that be the advantage? One person recommend using this sentence written below for a DV letter.


Somwhere in DV put, "If there is an underlying arbitration clause associated with this claim, I hereby exercise it, and waive your litigation rights to this claim, per the underlying arbitration clause."

[Pandora]

Dylan

May I ask a very simple question (although its probably been asked before... ) Why on earth dont you just file Ch. 7 and be done with all the nonsense of going back and forth with debt collectors / JD buyers and 1099 issues? For all the time and aggravation you're spending responding and researching on how to respond to them.. isnt it just easier to pull the trigger and have it done with?

I realize you're collection proof, however if I were in your shoes, I'd have filed long ago and washed my hands of it all.

Just an observation

[keepsmiling]

I totally get where Dylan is coming from. I'm thinking it might be cheaper than hiring an attorney and could be somewhat interesting as well.... and I suspect Dylan has some spare time.

I also wonder if it ultimately has an effect on your credit report, and if it often leads to 1099's that you have to pay tax on. Anyone? I think I asked this before but forgot the answer Ah middle age....

Personally I like the idea of dragging the collections people thru a bit of the hell they love to inflict. Seems only fair.

I'd love it if there were more discussion on this topic. Maybe even its own subforum.

[DYLAN150]

Pandora: Good question: If I file it will be a chapter 13, as quoted by 3 attorneys. Keepsmiling: Yes, I have alot of time to spend reading. In my old age that's about all I can do anymore or watch TV. If I could file a chapter 7, I would have already done so. I don't worry about my credit report anymore. I use cash for everything.

[treehugger1]

First, to the question at hand. Arbitration can be a very powerful tool for the debtor. Debtor Boards has a long-running thread dedicated to arbitration.

In my state there are more and more motions from defendants to stay lawsuits pending contractual arbitration. It appears these motions are being granted. And, why not? This also offers the lagging courts another method of moving the cases out of the back-logged court system.

The creditors asked for the Federal Arbitration Act, not debtors. Too bad that the FAA is now biting a few creditors and JDB's. Prior to recent credit card agreements, the arbitration clauses survived any defaults, and the arbitration agreements were also transferred to the JDB's who purchased the debt.

Some claim that there area a few arbitation forums allowed under the original contract who will not allow JDB's claims to be heard.

If one will not or cannot file a bankruptcy, why not educate yourself and use the rules in your favor? The financial industry does this all the time.

There are many reasons one might not file for a BK 7 in their middle-age years. This might be especially true for one in their mid-sixties, retired, with a large pension and/or retirement accounts; both of which are exempt under most state laws. The problem is that many middle-aged folks have retirement incomes that exceed the median income for a chapter 7.

Some folks who have not yet retired, but need to continue putting money into retirement and/or TDI's, might be crippled from doing so under a Chapter 13. In my case, I can finally put a large percentage of income into exempt accounts. Since I only have at most another five years of employment, why on earth would I give $70K+ to a chapter 13 if I have no other assets?

Each case is quite different. It helped me to discuss my situation with a CPA and look at the positive and negative consequences of a bankruptcy decision. So far, the worst I have had to deal with are a few judgments, garnishments, collectors, and JDBs. After 5-6 years, I have not even come close to paying unsecured creditors/CA's/JDB's what would have been paid in a Chapter 13 (at 100% payment plan based on my income.)

As I am approaching SOL on many of my accounts, I see a renewed interest in collection activity, and I find it interesting to discover all the weapons I was clueless about when I headed down the path to freedom of unsecured debt.

[DYLAN150]

It's kinda of funny, after being about 3 months past due on my credit cards payments, I wrote each creditor asking for reduced payments. I am talking about paying about 70% of the original payment. Not one creditor even replied. A year later, Chase wrote off my entire debt and furnished me a form called a 1099. I think I owed them about 14k. I could still be making payments to them at a reduced rate. A lot of the other creditors have sold the debt for 2 or 3 cents on the dollar. It's like they wanted it all, or didn't want to fool with it.

[treehugger1]

I was there at one point. I offered 100% payment over five years 0% interest as that is the very best they would get under a BK 13. They were not all that interested. I don't think the large national-class creditors care about the unsecured losses. Although, it sounds as if there may be some unsecured legal debt issues rearing their unsecured heads!

I was fortunate because I began to default in 2006/07. At the time, they probably didn't think the shit would hit the fan as it did in 2008. Now, with evidence of robo-signing (or false affidavits) at the unsecured debt issue, things might really get heated up. LOL

It is interesting that some creditors will issue a 1099 and others (sometimes the same creditor) will sell the debt for &.02 - $.03 on the dollar. There must be some point where they make a decision. I think either way the original creditor gets to take a loss.

[Pandora]

I understand the reasoning behind why some may not wish to file BK (either chapter) but I just thought I'd ask. Usually when someone is on SS pension, disability and military retirement- normally that is not a huge amount of money, relatively speaking.

Was just curious as to the "why's" of not filing is all...but I can also understand the flip side I suppose, to a degree. Arent retirement funds protected btw? I know ours was under ch. 13.

[HHM]

Just be a little leery of debtor-boards, there is some highly questionable interpretation going on in some of their information.

In the end, Arbitration is more of delay tactic, the debtor rarely, actually wins; and you will typically incur some costs if you take arbitration the full distance.

[treehugger1]

Thanks for the words of caution. I agree.

The folks on the board that I have dealt with related to arbitration are in Oregon, and they were quite happy to send me their case numbers. I verified their claims and also copied their motions for future reference. Precedence is pretty strong here among the various county cicuit courts. Circuit court judges are elected in this state, and in my little backwoods court, I think the judges are veyr happy to have past actions and precedence to help them with their decisions.

I suppose this is true in many states, and perhaps part of an attorney's job is to help "educate" the judges and help judges interpret the law.