Chapter 12 Bankruptcy

Similar to Chapter 13, Chapter 12 bankruptcy is available only to farmers and fishermen. Designed to benefit people in these occupations, it provides special provisions that allow assets to be kept that are required for the livelihood of these professions. Although originally scheduled to expire and extended a few times it has now been made permanent.

Filing for bankruptcy can be confusing therefore I recommend looking into bankruptcy attorneys to help you navigate the details and properly apply to your situation.

What Is Chapter 12 Bankruptcy
Chapter 12 is similar to chapter 13 but provides higher debt limits for and exempts land and other assets that are required to maintain the farming or fishing profession. Like Chapter 13 it is less complicated and cheaper than Chapter 11. Additional information on Chapter 12.

Who May File For Chapter 12
To file under this code, one must be a family farmer with regular annual income, however being that this is designed for farmers and fisherman it also allows for seasonal income. There are limitations on the maximum debt limits, a certain percent of the debt must be related to farming and more than 50% of the income must come from farming.

Also of note is that a corporation can file for Chapter 12, however there are restrictions that state the family must own certain percentage of the corporation, conduct the farming operations and the stock cannot be publically traded.

Chapter 12 Bankruptcy Plan
Your Chapter 12 repayment plan will be very similar to chapter 13. Payments will be determined by the amount of can afford after paying for what are determined to be living expenses. The length of repayment ranges from 3-5 years and can not be longer than 5 years. There are certain debts that must be paid such as child support, alimony, wages for employees and tax obligations. Any excess income you have after making required payments will need to be used towards payment of unsecured debts.

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