Emotional Stress & Psychotrauma

Today's consumer household is bombarded with credit card application/ offers and many households will collectively have more than half to a full dozen accounts. In many instances, MBNA and FIA card services will issue multiple solicitations and multiple cards, to single individuals, and also to their spouses. When households fall into financial difficulties and get behind on credit card account payments, it can be to much more than just one or two accounts. Transferring account balances results in a musical chairs version of moving account balances from one to another. Perhaps the entire suite of credit card accounts within the household may fall into default. If there are $5-10,000 limits on these cards, the household could easily be facing $20-200,000 in revolving credit debt.

Many normal American households are lulled into the social norms of credit cards and debt. Everyone has a credit card, or so we think. How many of your neighbors do you think own their homes free and clear? Ask any American, and the answer is clear, we believe in making the mortgage payment! The same is true with credit card accounts.

The dark side of living the American Dream with credit card accounts is when sh*t happens in life. A financial hardship, a sudden loss of a job by one spouse or both, investments gone bad, or even a medical emergency can trigger sudden financial hardships. And in today's debt-laden households, that trigger can result in delinquent credit card accounts. If these happen to be MBNA or FIA Card Services based, those consumers may very well be swept down the Wrongful Arbitration path.

The psychological hit of losing a job, or a large investment, or catastrophic illness, will not sway FIA or MBNA. They will aggressively mount collection efforts. When those fail, we contend there are thousands of cases where MBNA / FIA used the National Arbitration Forum to rubber-stamp an Award, and then converted the potentially illegal award, into a Money Judgment. If they are able to identify any assets that can be turned to liquidity, they will then cause the local Sheriff to seize your money.

This does sound like the IRS, doesn't it? In the case of the IRS, Courts have frowned upon this behavior.

Court Awards $10,000 for Emotional Distress Inflicted by IRS
This month's "Shop Talk" column in the Journal of Taxation has an interesting item about In re Rivera Torres, 309 B.R. 643 (1st Cir. Bankruptcy App. Panel 2004), in which the court awarded a taxpayer $10,000 for "emotional distress" inflicted by the IRS. After the bankruptcy court discharged a married couple's debts, including a $22,000 tax liability, the IRS repeatedly tried to collect on the discharged debt. In awarding the $10,000 damages against the IRS, the court considered the testimony offered by the couple about the emotional damages they suffered from the IRS's aggressive collection tactics. The column concludes:

Unfortunately, [the case] provides little support for stressed-out taxpayers dealing with the IRS prior to their bankruptcies....[W]e hope that other taxpayers don't have to become bankrupt before they can recover damages from [the] IRS in "traumatic" situations.

The Los Angeles Times celebrated the 300 million American milestone with an OpEd piece by JACOB S. HACKER, a professor of political science at Yale University and a fellow at the New America Foundation,
October 22, 2006 entitled "Till Debt do us Part".

He writes about today's assault on the nuclear familes:

"Families also were more likely to lose their homes than were married couples without children or than single adults — during an era in which foreclosure rates have skyrocketed. They also were much more likely to be behind on their credit card bills. And they were drowning in debt, with their median debt substantially exceeding their median annual income (according to the Federal Reserve Board's 2004 Survey of Consumer Finances), a level of debt not seen among any other household type."

We point out that financial hardship exacts a toll on the entire family, children and marriage included. When Wrongful Arbitration enters the picture, and can be considered as contributing to pain and suffering, that pain and suffering extends to spouses and children of the cardholder victim.

If you are on the Arbitration mill and feel you may be a victim of Wrongful Arbitration, we want to hear from you.