Chapter 12 Bankruptcy
Chapter 12 Bankruptcy is similar to Chapter 13 Bankruptcy but it was specifically designed for "family farmers" or "family fishermen" who have a regular income.
Chapter 12 Bankruptcy
Chapter 12 Bankruptcy allows the Debtor to develop a debt repayment plan in which the debtor repays their debts over a span of three to five years. Bankruptcy Code 11 U.S.C. § 1222(b)-(c) does not allow for any plan to extend for more than 5 years. Chapter 12 Bankruptcy is less expensive and more streamlined than Chapter 11 Bankruptcy.
Chapter 12 Bankruptcy gives the farmer and fisherman the best opportunity to successfully reorganize their businesses. Chapter 12 Bankruptcy requires the debtor to have a "regular annual income" which will ensure the debtor can make scheduled payments under the Chapter 12 debt repayment plan.
Chapter 12 Bankruptcy is only allowed for individuals or their spouses, corporations or partnerships who are:
- actually performing commercial farming or farming operations
their unsecured and secured debts do not exceed $3,792,650 if they are farmers or $1,757,475 if they are commercial fisherman
50% of the total debts that are fixed in amount are related to farming and 80% are related to the fishing operations
farming or commercial fishing operations must provide more than 50% of the gross income of the individual or the husband and wife team for the preceding tax year (or, for family farmers only, for each of the 2nd and 3rd prior tax years)
(Information provided by: http://www.uscourts.gov/FederalCourts)
Additional qualifications must be met by the corporation or partnership that needs to file for Chapter 12 Bankruptcy. Talk to a bankruptcy attorney for more information for filing Chapter 12 Bankruptcy.
More Help on Chapter 12 Bankruptcy
- Chapter 11 Bankruptcy - Unlike Chapter 7 Bankruptcy which liquidates the debtors non-exempt assets, Chapter 11 Bankruptcy allows the Debtor (which is generally a corporation or partnership) to restructure their debt obligations and continue to operate their business (although the business is supervised by the bankruptcy court and should be managed and operated for the benefit of the creditors). - read more
- Chapter 13 Repayment Plan - The Chapter 13 Bankruptcy Repayment Plan can be quite confusing when you are unsure of the details. Here we highlight some of the major questions and topics regarding the Chapter 13 Repayment Plan - read more
- Debtor - A debtor is an entity or person who owes a debt or a service to another person or entity which can also be called a Creditor. - read more
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