How does mediation work in resolving debt disputes?

Mediation is a process that can be used to resolve disagreements between debtors and creditors in California. It is a form of alternative dispute resolution (ADR) in which a neutral third party, called a mediator, helps the parties involved to come to an agreement. In debtor and creditor law, mediation is a way for debtors and creditors to negotiate a repayment agreement without the need for judicial intervention. In a mediation, the mediator does not act as a judge. Instead, they facilitate communication between the debtor and creditor to help them identify common ground, evaluate options, and come to an agreement. The mediator assists in negotiations to try to reach a mutually agreeable repayment plan. In some cases, the parties involved can even agree to a repayment plan that includes a reduction in the overall debt amount. The mediation process is voluntary and confidential. The mediator is bound by law to keep all information shared during the mediation confidential. This ensures that the debtor and creditor can discuss the situation openly and honestly. The goal of mediation is to come to an agreement that both parties can accept and be satisfied with. It is designed to bring about quick resolution and to avoid lengthy court proceedings. It is important to note that even if the parties involved do not come to an agreement during mediation, a lawsuit could still be filed by either party.

Related FAQs

What is a debt consolidation?
How can debtors protect themselves from debt collection agencies?
What are the requirements to file for bankruptcy?
What is a temporary restraining order?
Can creditors report a debt to the credit bureaus?
What is a secured transaction?
What forms should debtors fill out when filing for bankruptcy?
What is a loan shark?
What should debtors do if they are being harassed by a debt collector?
What is a usury law?

How does mediation work in resolving debt disputes?

Related FAQs

Related Blog Posts