Understanding Bankruptcy Mediation
Bankruptcy cases can and often do spawn litigation or major disputes with creditors. If you are in this situation, either as a debtor, a creditor, or as a plaintiff or defendant, you should know and will soon learn that litigation even in bankruptcy court is expensive and the outcome not always certain. In these situations, bankruptcy mediation should be seriously considered.
Indeed, in New Jersey, the Bankruptcy Court requires mediation in all suits (“adversary proceedings”) with a few exceptions.
In mediation, the parties to a dispute use a neutral third party to facilitate the resolution of the problem. The mediator is not a judge and cannot rule upon or force a particular outcome. Instead he/she is tasked with helping the parties work cooperatively to identify and implement a solution that is mutually beneficial. The mediator may brainstorm with either or both parties to determine what each party needs and what may be conceded.
In addition, the mediator doesn’t take testimony from witnesses or make determinations about what is or is not admissible. The mediator is not allowed to act as legal counsel to either of the parties, and should not have served in that capacity in the past.
A major advantage of mediation is that the parties can speak privately and in confidence to the mediator about their situation and concerns. The mediator can use this on both sides to try to get the parties to a “win-win” (as opposed to a “win-lose”) outcome.
One of the principal advantages of mediation is that it empowers the parties to resolve the dispute. As a participant in mediation, you always have the right to reject any proposed resolution, and you can always make a counter-proposal. Unlike litigation, you don’t have to wait and hope that the court found your arguments persuasive. If the other party to mediation agrees to the proposed settlement, a “mediation settlement agreement” is signed and becomes legally binding.
Mediation generally moves faster than litigation and with significantly less expense.
Most importantly, it helps the parties and their attorneys to see their situation through the eyes of an experienced neutral third party. This can often open their eyes to the risks to them (including the future cost in time, money, and emotional drain) of not reaching a settlement.
It has been said that “a case settled is a case well-tried”. Mediation is a good way to achieve that.
In New Jersey, the court has a panel of mediators, but the parties can choose anyone else in whom they have confidence as a mediator. Both Steven Neuner and Joanne Ventura are trained mediators with experience in civil, bankruptcy and divorce litigation.
Contact Neuner & Ventura, LLP
At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment with a bankruptcy attorney, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another bankruptcy lawyer. Evening and weekend appointments are available upon request.
Representing Clients across South Jersey