Answers To Most Commonly Asked Questions About Bankruptcy Mediation

Bankruptcy Questions

Bankruptcy mediation is a process that is frequently very successful in resolving bankruptcy issues outside of the typical legal framework.  The process is led by a neutral third-party mediator who helps to facilitate conversation between relevant parties.

What Can Be Mediated and When?

Bankruptcy mediation is very helpful in resolving disputes where there are multiple parties involved, specifically with regard to issues like interest rates, state law specific disputes, and valuation.  Disputes regarding adversary issues in Chapter 7 bankruptcy can also be resolved through mediation.  Some of the most commonly addressed issues in bankruptcy mediation include avoidance, preference, non-dischargeability, claims allowance actions, and fraudulent conveyance.  If you have one of these issues in your bankruptcy, mediation might be a more effective way to resolve it.

Bankruptcy mediation is available at any point in time during a consumer bankruptcy or a commercial bankruptcy.  So long as both parties and their legal counsel agree to enter into mediation, they may do so.

What Can Be Gained From Bankruptcy Mediation?

In mediation, the parties exercise more control over the resolution of the dispute.  The process is confidential and voluntary, and it’s also more likely to be resolved in an efficient manner.  Since the parties play a bigger role in designing the process and the resolution, they frequently walk away more satisfied with the overall outcome than if they had gone through court.  In addition, since the process can be resolve much more quickly in many cases, both parties end up saving money they would have spent going through court.

The confidential nature of bankruptcy mediation appeals to those who would prefer to keep their financial affairs more private.  Mediation can also help to level the playing field.  Through the appointment of an experienced mediator with a background in bankruptcy or your specific dispute issues, you’ll benefit from an informed and professional opinion.  The mediator is there to guide you through conversations and help you arrive at a solution.

How Do I Go About Setting Up Mediation

Both parties will need to select a mediator who meets the qualifications of the bankruptcy court.  Since mediation is voluntary, both (or all) parties must agree to it.  The mediator will then be contacted to determine eligibility and availability.  At that point, you will then file an application to appoint the mediator.  If you are successful in mediation, you’ll leave the process with a signed settlement term sheet.