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Inform | Mediate | Advocate

Information for creditors

Creditor's obligations

Before commencing enforcement action under a farm debt, a creditor must advise the farmer of their entitlement to request mediation. To do so, a creditor must send a Form 1 – Notice of Availability of Mediation, a Form 2 - Request for Mediation re Farm Debt (to allow the farmer to respond) and additional information about the Scheme, mediation and the Rural Business Support financial counselling service.

Within 21 days of receiving a Form 2 from the farmer requesting mediation, the creditor should respond to the farmer using Form 4 – Creditor’s Agreement or Refusal to enter into Mediation.

If the creditor agrees to mediation, the creditor must notify the Small Business Commissioner using Form 5 – Notice that Mediation is Required within 10 days after giving notice to the farmer that the parties have agreed to participate in mediation.

Once a satisfactory mediation has taken place, or the farmer refused to participate, or the creditor has made reasonable attempts throughout a three-month period to participate in mediation in good faith, the creditor may request from the Small Business Commissioner an Exemption Certificate using Form 7 – Application for Exemption Certificate.

If issued, an Exemption Certificate exempts a creditor from the mediation requirements of the Act for a period of three years. A creditor can then commence enforcement action on the farm debt.

Farmer initiated mediation

A creditor may also receive a request from a farmer to participate in mediation, via a Form 3 – Farmer-initiated Mediation Request.

The creditor has 21 days to respond to the farmer’s Form 3 request to mediate by sending a Form 4 – Creditor’s Agreement or Refusal to enter into Mediation to the farmer.

If the parties agree to enter mediation, the creditor must notify the Small Business Commissioner within 10 days that mediation is required, using a Form 5 – Notice that Mediation is Required.

If the creditor refuses the offer to mediate and the farmer is in default, a farmer may apply to the Small Business Commissioner for a Prohibition Certificate.

There is no compulsion on either party to enter into mediation if the farmer is not in default.

Forms for mediation

To assist farmers and creditors with the process approved forms are provided here.

Exemption certificates

An Exemption Certificate may be issued by the Small Business Commissioner. Once an Exemption Certificate has been issued, a creditor may commence enforcement action in respect of the particular farm mortgage. The farmer will be advised of an application for a certificate and of the issue of a certificate. An Exemption Certificate remains in place for three years.

Record keeping

Both the farmer and the creditor should keep accurate records and evidence of the service of notices together with copies of all notices served on each other.

More information

For more information about farm debt mediation or to initiate mediation call the Office of the Small Business Commissioner on 08 83030 2026 or toll free 1800 072 722

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