Debt Arbitration

Debt Arbitration is the industry created around the practice of debt settlement. Debt arbitrators are third-party institutions that work on behalf of their clients to negotiate out-of-court settlements for old bills, invoices, lawsuits, liens, medical bills, utility bills, judgments, and other types of significant debt. Typically, debt arbitrators are in lieu of credit counseling as an alternative for bankruptcy.

The major difference between debt arbitration and credit counseling is the fact that debt arbitrators work independently on behalf of their clients, while credit counselors work on behalf of credit card companies. Debt arbitration itself is conducted through something known as debt negotiation. During this process, arbitrators negotiate a lump sum settlement for amounts owed to credit card companies - typically, at a significant discount to the actual amount owed. Clients then make more affordable payments to the debt arbitrators to pay off the remaining balance.

Debt arbitration is an increasingly popular option for consumers who are seeking ways to climb out from a mountain of credit card debt. By negotiating the balances of your credit cards and not necessarily the interest like options such as credit counseling, consumers can potentially settle their debts for less than they owe.

A few popular ways to come up with the money necessary for the debt arbitration are:

• Cutting your expenses is the first step one should take in order to accrue the savings necessary to settle your debts. By better budgeting and eliminating any superfluous or unnecessary expenses, one may be able to find the money you need in order to settle your unsecured debt.
  
  
• Income tax returns are very useful in debt arbitration. Though it is unlikely that an income tax return will be able to sufficiently fund your debt negotiation program, it can definitely help to shorten the overall timeline even if only by a few months.
  
  
• Withdrawing from a tax-deferred account like a 401(k) or IRA may not make sense for consumers given the potentially high opportunity costs, as well as the penalties associated with an early withdrawal but as a last resort this option is still available. Consult with a financial advisor before choosing this source.
  
  

The National Debt Relief Group can help you find the right solution with a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.

Debt Arbitration