Q: What is a debt negotiation and debt arbitration?

A: Debt arbitration is a legal proceeding, similar to small claims court, in which a "disinterested expert" (i.e., an arbitrator) hears the case of the debtor and his creditor, and makes a ruling on how they should proceed (i.e. how much the debtor should pay the creditor, and the terms of the payment, etc.).

Sometimes, the term "debt arbitration" is also used to describe the process of using a professional debt negotiator - aka a "debt arbitrator" - to negotiate an out-of-court settlement. These debt arbitrators are not "disinterested," but rather, they work on behalf of the debtor.

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