More than 1.2 million bankruptcies are filed yearly by individuals or by corporations who are having trouble keeping up with their debt load. The majority of people who file for bankruptcy have under $20 million in combined assets and revenue and maintain a workforce of less than 50 employees.
Other bankruptcy filers (about six out of every 10) are facing a level of debt that is too high for them to handle because of their unpaid medical expenses. Bankruptcy proceedings have a filing process that goes through the civil court system. It is a decision that many debtors are reluctant to make, but one that can positively impact an individual’s or company’s finances in the long term.
Many debtors who are ready to file for bankruptcy ask for a bankruptcy mediation, a situation where a neutral third party listens to a bankruptcy case and gives their professional opinion, whereupon the case is officially resolved, based upon the mediators’ decisions. Multi-party bankruptcy cases and ones where state law needs to be discussed specifically often rely upon professional bankruptcy mediation.
Mediation as a alternative dispute resolution has been around for centuries: in cases where arbitration service is needed, the court maintains a list of actively qualified attorneys who are familiar with the finer points of individual and corporate bankruptcies. For complex commercial disputes or commercial cases, mediators may be selected with special areas of expertise. The mediator’s decision, however, will be upheld by the court.
Bankruptcy can seem like a real setback for an individual or corporation, but asset liquidation can be a fresh start and an opportunity to generate a positive credit record. Involving a qualified, court-approved mediator can help facilitate a bankruptcy discharge that satisfies both debtors’ and creditors’ requirements for a positive and fair outcome to a bankruptcy case.