Being in debt is not pleasant and if you do not respond to a debt claim against you within the stipulated time frame, your finances and credit score could be impacted badly.
In the past, many creditors walked away from debts, leaving money on the table because the debt recovery process in the Civil Courts is cumbersome, expensive, and time-consuming.
Creditors have historically written bad debts off because the cost to recover them gave a return of pennies to the dollar.
But businesses have discovered that there is another way to recover debt through Online Arbitration, which is a Civil Court approved process which is faster and much more cost-effective for the claimant.
Brief’s Online Arbitration platform is a form of Online Dispute resolution. The process is a simple six-step one. The plaintiff files their case through our platform and the defendant is notified.
Just like they would respond to a lawsuit, the defendant can then respond to the claim. An E-Judge is assigned to weigh up the merits of the claim on the basis of expertise and jurisdiction.
The judge then decides and may issue an award against you, which may be filed in court and reduced to an enforceable judgment.
What is the difference between a debt claim filed in court and one filed with Brief?
Aside from being a completely streamlined process that is 100 percent online, there is no tangible difference between a case being decided through online arbitration and in the civil courts.
It is a legally recognized process.
When you are sued for a debt in the Civil Court, you are given a stipulated time to respond to a debt claim made against you.
If you ignore that claim or fail to respond within that time frame, the court may issue a debt default judgment against you.
The same holds true for Brief’s online arbitration platform. Because it is a formal legal process, if you do not respond to the claim, the E-Judge will issue a default against you and an award can be recorded as a judgment against you.
The E-judge may also award additional fees against you to cover collection costs, interest, and possibly attorney fees.
What is a lien?
If you have defaulted on a debt claim and a judgment is issued against you, it becomes a lien on your personal property, including your home.
A lien is a legal right against assets that are used as collateral to satisfy a debt. If established by a legal judgment, a creditor may seize the asset subject to the lien to repay debt obligations.
The judgment creditor can present the judgment issued against you to the local sheriff, instructing them to seize and sell your property.
Put simply, a judgment against you could mean that you are forced to sell your home or other property to satisfy your legal obligations.
What is a wage garnishment?
If a judgment is recorded against you, the creditor can file a garnishment with your employer.
This means that a portion of your wages or salary will be garnished by your employer and paid to the creditor.
Garnishment orders can also target your bank accounts and any monies you may have deposited within may be seized by the creditor to make good for the debt.
A judgment against you will appear in county property records
If a judgment is issued against you, it will be recorded in the records of the county you live in.
This means that if you sell your property or even refinance it, you must pay the judgment in full from any proceeds you might make in the transaction.
How long does a judgement remain active?
It all depends on the state you live in, but the length of a judgment ranges from five to 20 years and more.
Judgments show up on credit reports for up to seven years, meaning that it can become difficult to obtain credit cards or obtain loans
Judgments also show up on background checks until the judgment expires.
What should I do if I receive a notification of a claim?
If you have been contacted by an online arbitration service provider, it is likely that a claim has been made against you.
Depending on the complexity of the case, you may also wish to get legal advice. Brief will also give you the option to settle the claim.
When a plaintiff opens a claim against you, they are given the option to enter an acceptable settlement range. This will often be less than the total amount of debt owed.
If you opt to settle, the claim ends immediately and you will avoid an award and possible judgment issued against you.
Need information about what you need to respond to a debt claim?
Have you been served with a claim? Do you need information on the Brief process?
Brief is a market-leading online arbitration platform in the United States. Our 100 percent online alternative dispute resolution platform helps businesses protect their contracts and agreements through online arbitration. Follow us on LinkedIn or Facebook for updates and news about online arbitration and more.
*Brief cannot and will not give legal advice on any matters, financial or not.