Hello, For 3 years I am in debt for about $9,000 with different creditors. Not much has progressed in my credit situation: I have not settled with any creditors yet, due to my current financial situation. A few weeks ago I received a notice from MBNA's lawyer that an arbitration claim was filed against me. It also says that if I don't pay MBNA and file with the forum a written response, an award may be entered against me. The total owed is $4,117.12. I am scared and very concerned about this situation. I would appreciate inputs on how to deal with this situation. As far as the other creditors, will my credit improve if I pay them? Some wrote-off my account. Thank you.
Respond to the arbitration claim when it arrives! When you receive the arbitration claim, read it! All of it. They(NAF) will ram you through a "document hearing" whether you respond or not. You do NOT want to let them obtain a default award against you. Once you do respond, though, you will be deemed to have participated in the arbiration--which is fine if you wish to fight them. And, you can fight them and drive their costs way up by demanding a participatory hearing(see the claim) along with "findings of fact and conclusions of law." You could demand(through your submission) that an arbitrator rule that a state court of competent jurisdiction first find if there is an enforceable contract between you and MBNA. But right now, go to arbitration-forum.com and read the NAF code of procedure as it relates to the hearing format. Find also, the last date of activity on this alleged account and/or the default date. They might be attempting to collect on a claim outside the statute of limitation. What state to reside in?
Whoa, nelly! Does your credit card agreement provide for arbitration against you for unpaid balances? If not, they cannot force you to arbitrate and probably would not be able to enforce any arbitration award. Double-check that agreement.
agreement, yes, but let them produce it! If/when NAF sends a claim of arbitration, they MUST attach the agreement containing the arbitration clause to the claim. They are betting you will be bowled over by it and cave giving them a default award. If there wasn't a dispute on the account and you simply stopped paying, and it's been over three years since default and the claim, you may be in a good position. If the account was opend before '99 then you are in an even better position. An objection or "stay" is critical. You must do all you can to thwart the arbitration proceeding. A Consumer fraud attorney might be able to step in and "stay" the proceedings, pending a court action to prove contract.
Arbitration might also be blocked due to bias on the part of the arbitrator. See this, which also contains a number of summaries of debt collection violations, illustrating how they fit under FDCPA: http://fairdebtcollection.typepad.com/ "... National Arbitration Forum disqualifies its appointed arbitrator My firm is defending an arbitration claim filed with the National Arbitration Forum ("NAF") by CACV of Colorado, LLC ("CACV"). NAF appointed an arbitrator, Coralie Kupfer, that had ruled on twenty previous claims brought by CACV, and had entered an arbitration award in all twenty cases in CACV's favor. Based on NAF rules involving conflict of interest or bias of an appointed arbitrator, I requested she be disqualified from the case on the basis that she was being paid by NAF, and that NAF has a heavy incentive to rule in favor of collection agencies that bring a high volume of claims with NAF. I argued this inherent bias is supported by her track record of ruling in CACV's favor on every single CACV claim she has heard. NAF has responded by disqualifying her. A new arbitrator has not yet been appointed. ..."
