With the ongoing drought, many farmers are facing situations where their creditors are seeking resolution of issues involving farm debts. Under the Farm Mediation Act 1994, creditors and farmers are required to engage in mediation prior to any enforcement actions being taken under a farm mortgage. As your solicitor, we can help prepare and advise for the mediation and to consider options realistically. Farmers are also entitled to have their solicitor represent them at the mediation. Mediation is a structured negotiation process where a neutral and independent mediator assists the parties to communicate effectively with one another and reach an agreement on the issues.
Under the Act, if the farmer’s mortgage is in default, the creditor must invite a farmer in writing to mediate. The farmer then has 20 days to respond to a creditor’s invitation. However, a farmer may also initiate a mediation under the Act, whether or not they are in default. If the farmer’s loan is in default and the creditor refuses to agree to mediate, this may result in the issue of a certificate of exemption from enforcement action.
It is recommended that farmers facing financial problems seek legal assistance early as this will enable efficient identification of the problems. Our professional services can help to advise on aspects of the process, help in succession planning and negotiating a business restructure if the informal mediation does not resolve the issues.
If your mediation is unsuccessful and you believe that your creditor has not followed the correct procedure, then we can assist in lodging a complaint directly with your creditor. If the issue is not resolved, we can assist in identifying the most appropriate forum for resolving the complaint, such as the Financial Ombudsman Service Australia, or from 1 November 2018, the Australian Financial Complaints Authority.
Under the NSW Government’s Farm Household Allowance, an Activity Supplement payment of up to $3,000.00, payable to both you and your partner (total of $6,000.00) may be used to fund our professional legal advice on the above matters.
If you require assistance with your farm debt, please contact Everingham Solomons to have a discussion with a legal practitioner today because Helping You is Our Business.
Click here for more information on Alex Long.