As a consumer, you are always at a disadvantage when dealing with a credit card company or other lender.
As a consumer, you are always at a disadvantage when dealing with a credit card company or other lender. They have included so much fine print in the Credit Card agreement that it is almost impossible to know exactly what your rights are when it comes to dealing with your debt. One of the most common clauses in credit card agreements are the arbitration clauses.
An arbitration clause basically says that if a dispute arises that you cannot go to Court. Instead you must have your dispute resolved by an Arbitration Panel. And who pays the Arbitration panel? In most cases it is the credit card companies. Do you think you can get a fair Hearing there?
An advantage to bankruptcy is that we are able to go around the arbitration agreement. Several Courts have ruled that Arbitration agreement does not apply in a bankruptcy adversary proceeding. This means that you as a Consumer can actually get your day in Court. Below is some information on recent Arbitration suits from the National Association of Consumer Bankruptcy Attorneys.
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Adversary procedure—Effect of arbitration agreement: The courts in three cases denied a motion to compel arbitration of the debtor's claims in an adversary proceeding. See In re Anderson, --- B.R. ----, 2016 WL 3365480 (S.D. N.Y. June 14, 2016) (case no. 7:15-cv-4227), appeal filed, In re Anderson, Case No. 16-2496 (2nd Cir. filed July 13, 2016) (the bankruptcy court did not clearly err in refusing to compel arbitration in the debtor's proposed class action to recover for a credit card issuer's alleged violation of the discharge injunction in continuing to report, as charged off, credit card debt that had been discharged in bankruptcy); In re Ellswick, 2016 WL 3582586 (Bankr. N.D. Ala. June 24, 2016) (case no. 1:15-bk-41196; adv. proc. no. 1:15-ap-40048) (the court denied the debtor's motion to compel arbitration in an adversary proceeding asserting that a debt collection's proof of claim violated the Fair Debt Collection Practices Act where the creditor attached to the claim a statement of account information required by Bankruptcy Rule 3001(c)(3)(A) for open-end and revolving credit transactions, but the debtor contended that the underlying debt was not open-end or revolving); In re Walker, 551 B.R. 679 (Bankr. M.D. Ga. June 17, 2016) (case no. 5:14-bk-51982; adv. proc. no. 5:16-ap-5010) (the court denied the creditor's motion to compel arbitration of a debtor's adversary proceeding asserting that the creditor, by repossessing the debtor's motor vehicle postpetition, committed common-law conversion and statutory trespass to personalty, where the debtor's claims were predicated on the assertion that the creditor's conduct violated the automatic stay).
