Professional debt mediation has long been seen as a viable first step that lenders should take with borrowers in arrears.  Now, the state government of Victoria in Australia is considering whether that first step should become a legal requirement banks must meet before foreclosing on farm property.

Under the legislation proposed in the Victorian Parliament, banks wanting to recoup their losses from farmers behind on payments would have to offer the opportunity for professional debt mediation first.  According to Peter Walsh, the Agriculture Minister for Victoria, the legislation would apply to all farmers without restriction.  Walsh commented that "any farmer who has finance that is secured by a mortgage, whether it be with one of the major institutions or private providers of finance, would be eligible if there is a process started where the financier wants to recover debt."

Professional Debt Mediation Bill has Support of Farmers

Andrew Broad, currently serving as president of the Victorian Farmers Federation, commented that "the mediation process seems to have worked reasonably well in NSW [New South Wales] and this bill is similar." Broad specifically pointed out that mediation can help farmers look more objectively at their own financial situation during times of poor harvests or other financial stress.

Insurance mediation is another area in which state and local governments frequently mandate that mediation attorneys be consulted before legal action is taken.