Chapter 12 bankruptcy is similar to Chapter 13 bankruptcy, which allows wage earners to pay off debts over a specified period. A Chapter 12 filing applies to family farmers and fishermen. If approved, the plan calls for repayment of debts in 3-5 years and the farmer may continue to operate the farm in the interim. Chapter 12 allows for the seasonal nature of farming and fishing income.
Do you have additional questions about filing for a Chapter 12 bankruptcy? Our bankruptcy lawyers can help. Contact a bankruptcy law attorney today to learn more about how a Chapter 12 bankruptcy could possibly help you.
The following people and entities may file a Chapter 12 petition:
The conditions for eligibility are very clear when it comes to individuals or an individual and spouse. More than 50 percent of the gross income for the previous year has to be from the farm or fishing operation. The total debts must not be more than $3,792,650 for a farm and $1,757,475 for a fishing operation. At least 50 percent of the farmer's debt and 80 percent of the fishing debt must be related to their farm or fishing operations.
The debtor needs to provide a full list of all creditors and the amounts and nature of the debts for each creditor. As soon as the petition is filed, the court intimates the creditors and triggers an automatic stay on all collection actions.
Would you like to know more about filing for a Chapter 12 bankruptcy? Our bankruptcy law attorneys can help. Contact a bankruptcy lawyer in your area today for more information.