The Different Sides To Debt Management

I am yet to come across someone who has never incurred a debt

, be it for a sip of Coca Cola, or even a breath of air in a healthcare institution. Debts are an everyday reality, without which life would seem bland and tasteless, in a weird way though.

Statistics reveal that consumer debt in America amounts to $2.5 Trillion, a startling figure that naughtily equates to an average of $8 100 owed by every single person on the mainland, including children too! If you are one of the 'not so much of shock cases of debt' then you could want to know about how best to settle any debts you have.

As we have all come to learn, most debts end up with a letter of summons effectively requiring you to pay off a debt, plus notifying you of the commencement of legal action if nothing is done about clearing off the debt. Naturally you will have to consider your reasons for not actually paying off any debts owed, as it is this reasons that will determine your next course of action. Say you have failed to do so because of a genuine inability to pay.

In such a case the only real option will surely be debt negotiation. Debt negotiation is the best way to settle a debt in which you have no reason whatsoever to withhold payment, and sometimes it might be a compulsory aspect of any contract signed between you and your creditor.

Debt negotiation is made up of two different parts, both of which avail to you as options towards alternative dispute resolution (ADR). Mediation is the first method of ADR and you should be pleased to know that it is private and confidential.

The mediator chosen does not necessarily have to be a professional in the field to which the dispute relates. He/she's responsibility is to make sure that both parties gain a better understanding of their disagreement. Sometimes minor details prevent us from reaching agreement with people we might be at loggerheads with, it is purely natural.

Arbitration, on the other hand, is completely different in the way it operates. Arbitration is generally a consequence of a contractual term the parties to the dispute agreed to, maybe as a form of dispute settlement in the event of an altercation.

In this way it ultimately gains the force of law and becomes a compulsory alternative to settling an argument. The chosen arbitrator must be an impartial adjudicator who has no association whatsoever with the parties concerned. However, one interesting feature of the arbitrator is the fact that his decision, is binding. This means, after the inquisitorial process of questioning, the decision handed out by the adjudicator becomes final and both parties are bound to it.

If at all you chose to fight the case in court then you must be prepared to pay the legal costs. But after the case is done it would be nice for you future aspirations to seek debt counseling.

Debt counseling helps in the transitional process soon after a lengthy legal battle to put you back in shape. Without it you will soon fall into a spiral of debt, one from which you might never emerge alive.

by: Joel Hambit

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