Are you thinking about filing for bankruptcy for your business, but dreading the the time and cost of litigation? Has your lawyer suggested bankruptcy mediation to you? His or her suggestion might be something worth looking into, as many judges and attorneys are now investigating mediation as a great alternative for avoiding litigation. Bankruptcy mediation does vary from state to state, based on state laws, but there are a few basic facts you should know. Mediation can help narrow issues and settle case investigations and many mediation services hire former judges and experienced litigators to help with both private and public sector investigations. Price can be flexible — either fixed, as in a flat fee, or hourly. If you want an experienced mediator on your side, it’s best to seek out one of these services for your business’s sake.
What Is Bankruptcy Mediation?
Bankruptcy mediation is a tactic used to help resolve disputes that range widely and smaller, more individual claims. It’s a negotiation process and is carried out by a neutral third party (the mediator) who helps the parties in dispute to resolve their argument outside of court. Even if you start filing for litigation, you can still use bankruptcy mediation, as it’s available at any step during the process of a commercial bankruptcy. Both parties and their lawyers have to agree to participation before the mediation process begins, however. Some of the most common occurrences where bankruptcy mediation would take place are cases with multi-party disputes or confidential issues where there’s been contention, like valuation or interest rates.
Many folks choose to use bankruptcy mediation, because of the control it gives them over the results of the argument. It’s a voluntary, immediate, confidential, and less expensive option than going to court and hammering it out there. And the parties are asked to collaborate on a resolution that works for all of them, instead of the court handing down a decision that favors only one of the parties.
What Should I Expect From a Good Mediation Service?
Ideally, your mediation service will combine the benefits of the federal court system and still preserve the benefits of seeking arbitration. Many services hire former federal judges who are experts in various types of law, including bankruptcy law. They’ll have highly advanced case management software with customized reports and case managers who are available seven days a week with extended morning and evening hours for their clients’ convenience. Their practitioners will have a high success rate and will be expert advisors in helping you find the bet strategy and arguments during the mediation process.
State bankruptcy courts often appoint attorneys and bankruptcy trustees with plenty fo experience and mediation training as bankruptcy mediators, but there are also more private services that you can choose from, who are licensed with the State bar. As mentioned previously, fees can often be flexible, though the bankruptcy mediator will most often charge an hourly fee for his or her services.
What’s the Process of Bankruptcy Mediation Like?
Although certain protocols are subject to change depending on the state, there are always some basic guidelines in place for the bankruptcy mediation process. The first step is always to find a mediator that all parties can agree on and who meets any qualification requirements as put forth by the state’s Bankruptcy Court.
Secondly, the legal counsel should be in touch with the mediator to make sure he or she is available when needed and that he or she is not working on any other conflicts of interest that would keep him or her from presiding over the mediation.
Lastly, there will be some forms for all parties to fill out (including an application for the mediator’s appointment and a verified statement). These forms can once again vary depending on the state.
If you’re looking for a more cost-effective way to settle your business’s bankruptcy claim, consider suggesting a bankruptcy mediator to your legal counsel and see what he or she says. It may very well be the best route to go down in terms of eventual outcome and cost.