The Arbitration Strategy
Many credit card agreements contain mandatory arbitration clauses. When sued, invoke it to force the case out of court. Arbitration costs the debt buyer $1,500-3,000+ in fees. Many drop cases rather than pay.
How to Invoke
File a motion to compel arbitration citing the clause. Attach the agreement (available from the CFPB credit card agreement database). The court must grant the motion if valid. The case is stayed or dismissed.
What Happens in Arbitration
The debt buyer must pay filing fee ($1,500+) and the arbitrator's hourly rate. Many refuse to pay and the case dies. If they proceed, you raise the same defenses.
Frequently Asked Questions
How do I find if my agreement had an arbitration clause?
Check the CFPB database at consumerfinance.gov. Or contact the original creditor for the agreement.
Can the debt buyer waive it?
They inherit the original terms and cannot unilaterally waive the clause. But if you participate in court without raising it, you may waive it yourself. Raise it early.
Does this strategy really work?
Yes. Consumer attorneys report high success rates. Debt buyers rely on mass court filings. Forcing individual arbitration destroys their business model.
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