What happens when a borrower does not pay back his loan?

At BTCJam, we strive to deliver the best possible returns with the lowest risk to our investors. We have many protocols to ensure that we feature high quality borrowers while we actively try to filter out scams and bad borrowers.

The first thing we do is to collect various points of identification: ebay, paypal accounts, banking statements, social network information, etc about the borrowers. We verify all those documents and accounts through our experienced team.
Second, we assess the borrower based on his information with our credit scoring algorithm. We assign every borrower a score ranging from A+ to E-, depending on the likelihood that they payback investors.
Finally, the “wisdom of the crowds,” –our dear investors, decide who gets funded. As you may know, an individual is usually not very good at making an estimate, but when you average out the esitmates of a large group of people the outcome is more accurate.  Of course, having multiple investors involved is no guarantee that a borrower will repay, but it is less likely that a large group of people will be fooled by someone compared to just one person. We suggest that investors pay more attention to loans that are funded by multiple people. The returns may be lower, but they are more safe.

On a separate note, make sure that you diversify you investments as much as possible. Learn more about this here:

What happens, if despite of all this, someone still does not pay me back?

If a borrower misses one of his payments for the first time, we try to get in contact with him via email or phone. If we get a hold of them and they manage to pay back with a slight delay, we will accept the late payment with a processing fee and return the money immediately.

If a borrower does not respond to us within 90 days, we start an arbitration process.

What is International Arbitration?

Arbitrators are neutral third-parties to whom the parties yield the power to decide the dispute and render an arbitration award similar to a court judgment while avoiding the cost and delays common in court litigation. Arbitration is a faster, more efficient legal alternative than bringing someone to court. It is interesting to note that arbitration was the only means of resolving disputes for thousands of years before there were courts. Courts actually embrace arbitration to resolve civil disputes since it reduces the size of court dockets. Arbitration is binding (cannot be appealed) and is recognized and enforced in nearly 150 countries under The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). For example, if a Canadian borrower fails to pay back their loan, then a Canadian arbitration company contacts the individual to collect the loan. The arbitration companies we use are similar and often overlap with those used by large corporate banks.

What are the benefits of International Arbitration?

  • Safer investments
  • Debt renegotiation
  • Enforcement

Which loans are susceptible to arbitration?

All loans made after 03/30/2013.

When is a loan sent to arbitration?

When it is overdue for more than 90 days.

Do I need to submit the loan to arbitration myself?

No, the loans are sent to arbitration automatically. The borrower and all the investors will be notified if it happens.