Farm Debt Mediation Service: Step 3. How to apply

Step 3. How to apply

The Farm Debt Mediation Act is divided in 2 sections. To apply for the Farm Debt Mediation Service (FDMS), you must decide which section is best suited to your situation.

You received a Notice of Intent by Secured Creditor or notice of other recovery action from your creditor(s)

If you received a Notice of Intent by Secured Creditor or notice of other recovery action from your creditor(s) and you have not applied for a mediation under Section 5(1)(a) within the past 2 years, Section 5(1)(a) may be the appropriate application for you. Section 5(1)(a) provides a financial review, mediation and a stay of proceedings.

You have not received a Notice of Intent by Secured Creditor or notice of other recovery action from your creditor(s)

If you have not received a Notice of Intent by Secured Creditor or notice of other recovery action, but you can foresee financial difficulties and you have not applied for a mediation under Section 5(1)(b) within the past 2 years, Section 5(1)(b) may be the appropriate application for you. Section 5(1)(b) provides a financial review and mediation without a stay of proceedings.

Once you have decided which section is best-suited to your situation or if you want to discuss your situation, you can contact your nearest Farm Debt Mediation Office at 1-866-452-5556.

You should complete and send the application form to your Farm Debt Mediation Service (FDMS) office as soon as possible:

For applicants participating in the Advanced Payments Program, please go to the APP/ FDMS Advanced Payments Program/Farm Debt Mediation Service information page.

Section 5(1)(a) Mediation with a stay of proceedings

Creditors who send you a Notice of Intent by Secured Creditor under Section 21 of the Farm Debt Mediation Act must wait 15 business days before they can begin or continue any action to realize on their security.

If you apply and you qualify for Section 5(1)(a), you will be entitled to a financial review and mediation with a stay of proceedings. During the period of the stay of proceedings creditors may not begin or continue recovery or seizure action against your assets.

You must also follow guardianship directives. You cannot:

  • incur additional debt
  • make payments to creditors for debt you had when the stay is put in place
  • sell or transfer assets without prior written permission

Initially, the stay of proceedings is in place for 30 calendar days, but may be extended in 30 day increments to a maximum of 120 calendar days. If you are considering an application under Section 5(1)(a), you are strongly encouraged to contact the Farm Debt Mediation Service office nearest you.

Section 5(1)(b) Mediation only

An application for mediation under this section of the Act is generally used when you can foresee financial difficulties, but have not yet been served with a Notice of Intent by Secured Creditor or any other legal documents from your creditors.

The service includes a financial review and mediation without a stay of proceedings. There are no restrictions placed on either you or the creditors. This section normally deals with secured creditors and may include major unsecured creditors essential to an arrangement.

For creditors

Meeting financial obligations has always been important to farmers, but adapting to today's rapidly changing conditions can sometimes make debt repayment difficult. If you and your client have reached a stalemate in your repayment negotiations, the FDMS provides a mediation process that encourages a mutually agreeable solution.

The FDMS includes the development of a recovery plan outlining the steps and the responsibilities of both you and the producer.

If you are a secured creditor, Section 21 of the Farm Debt Mediation Act, requires you to serve a farmer with a Notice of Intent by Secured Creditor before taking legal action to recover debts.

You must wait 15 business days after the Notice of Intent by Secured Creditor is deemed to be effected before starting or continuing collection action. The farmer may choose to apply to the FDMS during this period, or at any time afterwards.

For farmers

If you decide to apply and you qualify for Section 5(1)(a), you will be offered a financial review and mediation with a stay of proceedings, during which time creditors may not begin or continue recovery or seizure action against your assets.

The stay of proceedings is initially issued for 30 calendar days, but may be extended in 30 day increments to a maximum of calendar 120 days. If you decide to apply and you qualify for Section 5(1)(b), you will be offered a financial review and mediation without a stay of proceedings.

Please see the Farm Debt Mediation Act and the Farm Debt Mediation Regulations for more details.