Today’s article, we will discuss how we can increase the chances of getting a charged off account removed using arbitration. Not only can your account be removed from the credit report, in some cases you can either get compensation awarded to you, or the lender will settle outside of arbitration. Getting a charge-off deleted and getting paid? What’s not to like about that!
In the world of credit repair, getting charged-off accounts removed (paid or unpaid) has become difficult at best. Since the COVID-19 pandemic, it has become even more difficult to get a charge-off removed. If any credit repair company says to you anything different, run the opposite direction! In recent months, credit repair professionals have been grasping at
straws looking for ways to help their clients to get these accounts off their credit report. It turns out that there may now be an answer in the original contract. Lenders often put arbitration agreements in their contracts to help prevent class action lawsuits. Credit repair professionals who practice Pre-Litigation (prepares disputes on factual items for intent to sue or arbitrate if accounts are not corrected or deleted per the FCRA) credit repair, have successfully leveraged arbitration as a tool to get these stubborn accounts off of credit reports, and have obtained some nice settlements for their clients as well. Today, we will discuss how Credit Wellness Solutions can help you with charge-offs using the power of arbitration.
What is Arbitration?
Arbitration is an alternative form of dispute resolution where a 3rd party hears both sides of the dispute and decides the best way to resolve the dispute. This form of dispute resolution is handled outside of the court system, and unless both parties agree, the decision of the arbiter is legally binding.
In most cases you do not need an attorney to arbitrate, however, consulting with an attorney is always wise to give you the best possible outcome. In order to arbitrate a charge off account, the original lending agreement must have an arbitration clause in the contract. Many times when a consumer wishes to arbitrate, depending on the strength of the case, the lender will often settle before the scheduled day, especially if the account has been settled or paid. Lenders will tend to fight if the charged-off account is unpaid, especially if there is a large balance. Even then, there are still options as you don’t have to arbitrate with the lender. In cases of credit reporting errors, it is also possible to arbitrate against the big 3 credit bureaus. Schedule a FREE CONSULTATION with us, to see if we can help you get those stubborn charge-off accounts removed.
What If A Debt Buyer Has Purchased The Account?
Debt Buyers typically purchase charged-off accounts for pennies on the dollar. They usually employ the use of external debt collection companies, or attempt to collect a debt internally as a sister company. For example, Resurgent Capital is the sister company of LVNV, one of the most common debt buyers we see on credit reports. When a debt buyer purchases a charged-off account
from a lender, they are bound to the original lending agreement. This means if your original creditor has an arbitration clause in the contract, the debt buyer must honor it! Debt buyers tend to be aggressive when pursuing debt collection. Debt buyers love to sue on defaulted debts, especially large debts, and typically just before the statute of limitation expires. Arbitration, can not only help get you the deletion you are seeking, but it can be a powerful defense mechanism if they attempt to sue you. Click here to read an article on the benefits of arbitration against debt buyers. Additionally, if you have debt buyers and debt collectors harassing you, we can help you uncover violations and get you up to $1,000 per violation. Click here to learn more about our debt collection audit service.
what are the benefits of arbitration?
Now let’s discuss the benefits of arbitration and compare it to litigation as well. To begin with I want to share an article my friend, and attorney advisor, Shiva, who does an amazing job of explaining the process. Arbitration has many benefits I will outline below and compare to litigation.
- Without arbitration the chances of getting the charge-off removed from your credit reports are slim to none.
- Whether we arbitrate against the creditor or debt buyer, or the credit bureaus, there is a good chance they will settle outside of arbitration, especially if it is a paid or settled charge-off. It’s almost like they pay you for the deletion! What’s not to like about that?
- If a debt buyer attempts to sue, you can file for arbitration to stop the lawsuit. Chances are you can get the debt buyer to settle for much less, and even get a deletion on your credit report. Arbitration to a debt buyer is way more expensive than a lawsuit, especially if they lose.
- Before you arbitrate, you can see some small credit score benefits where the creditor or credit bureaus are making small adjustments to the account based on the dispute (note, they may fix 1 or 2 things, but chances are the reporting will still be wrong). Even small credit score bumps can be greatly beneficial.
- You typically do not need an attorney to arbitrate. As a disclaimer, we are not a law firm, and you should at least consult with an attorney prior to any arbitration. If you become one of our clients, we will always consult with one of our attorneys before we arbitrate on your behalf.
- Arbitration is typically a faster process than litigation.
Arbitration VS Litigation
Arbitration
- You can win arbitration on simple credit reporting errors without having to be denied for credit.
- Faster process.
- You or the defense will not know who the arbiter is, or their tendencies of judgement.
- Arbiters tend to be more impartial and hear all the facts before giving opinion.
- More expensive for the defense.
- Legally binding, can net you the deletion and a nice cash reward if you win!
- Your credit repair professional, with a POA can represent you, you most likely will not need to appear.
Litigation
- Most attorneys will not take cases unless there are substantial damages due to the credit reporting errors such as being denied for a mortgage.
- Can take up to 2 years before your case is heard.
- Defense attorneys know the judges or how the circuits operate and leverage that against you.
- Not all circuit courts are consumer friendly, even if you have a strong legitimate case. Often the judge or court has a pre-conceived opinion regardless of the facts.
Hire Credit Wellness Solutions To Help You
Pre-Litigation credit repair is our specialty! We now offer arbitration services included in ALL of our credit repair packages! If you wish, we will dispute your charged-off accounts like we normally do, except once the credit bureaus or creditors do not correct the disputed errors, or delete the account from your credit report, we will take them to arbitration on your behalf. Chances are, we will get the account deleted, and they will
settle with us for a nice cash reward, or wipe out the debt. When we get to this point, you the only cost to you is the arbitration filing fee (They typically run less than $400), and if you are entitled any cash reward or settlement the fee is 20% of the settlement (other companies split this 50/50 with their clients) plus deletion fee if you are enrolled in our pay per delete plan. To get started, get your credit reports from Smart Credit (Smart Credit is required to enroll in our credit repair program. They have partnered with us to offer a 7-day trial for only $1), then schedule your Free Consultation. We will look over your Smart Credit report and give you a gameplan to improve your credit. We will work to improve your credit, dispute all your negative items, audit your debt collections, and represent you in arbitration if the credit bureaus and creditors refuse to fix or delete the errors on your credit report. Click the Buttons below to get started.
