Mediation is a way of resolving conflict between two or more individuals. In the course of a bankruptcy, the parties involved in a disagreement can agree to work with an impartial and independent person, called a “mediator”, who will help them settle their dispute instead of going to court. Generally, the mediator is an employee from one of the Superintendent of Bankruptcy’s Division Offices. Mediation is more flexible, speedier and less costly than a formal court decision. It allows people affected by the bankruptcy to be directly involved in deciding how their disagreement will be settled. In bankruptcy, mediation is available to resolve two types of disputes:
disagreements over the amount of money the bankrupt will pay to the trustee for the benefit of the creditors during the bankruptcy (called surplus income payment); and
disagreements regarding the conditions that the trustee has recommended for bankruptcy discharge.
When mediation takes place, the bankrupt and the trustee (or trustee’s representative) must be present. If a creditor requests mediation, that creditor must also be present.