Mediating a farm debt

The situation: A family farm had got into substantial debt with their lender. Following the procedures outlined in the Farm Debt Mediation Act 2011 the lender (creditor) wrote to the farmers requesting mediation over the farm debt. The farmers agreed.

The process: The matter was then referred to the VSBC by the Department of Economic Development, Jobs, Transport and Resources (this is where farm debt matters commence and they are then referred to the VSBC once a farmer has agreed to mediate with the creditor).

The VSBC dispute resolution officer looking after the file attempted to get the parties to mediation. This proved somewhat difficult as the farmers, in addition to experiencing difficulties with the lender, were in the process of divorcing, and were waiting on a decision from the Family Court regarding division of their marital assets.

Although understanding of the farmers’ predicament, the lender wanted to undergo mediation as soon as possible as the farmers’ debts were significant. The VSBC dispute resolution officer managed to arrange mediation for a date after the Family Court decision was handed down, which allowed both the lender and the farmers (whose property settlement had now been determined) to have a clearer picture of how they could come to some resolution at mediation.

The resolution: A complicated and difficult mediation was held between the lender and the divorced couple (who were represented by different lawyers). After much discussion it was agreed that the farmers would both sell property in order to cover the outstanding debts.

Sorting out a farm machinery debt

The situation: A farmer has been in arrears with a small lender regarding a loan for a tractor. The parties had tried to sort out the issue for some time, with the farmer agreeing to a payment plan in order to get up to date with the payments. However after more missed payments by the farmer, the lender (creditor) decided that the matter required mediation.

The VSBC: The lender wrote to the farmer asking him to participate in mediation, to which the farmer agreed. After receiving the paperwork from the Department of Economic Development, Jobs, Transport and Resources, the VSBC arranged a mediation date in a regional centre close to the farmer’s property.

The resolution: Between the time that mediation was arranged and the mediation date, the farmer managed to sell a property that had been on the market for some time, and contacted the creditor offering to make arrangements to pay off the machinery loan in full. The creditor was happy with this and the matter was settled without the need for mediation.


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