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Chapter 12 bankruptcy is known as Family Farmer Bankruptcy and is only applicable to farmers with regular income.

Is it similar to Chapter 13 and Chapter 11?

Chapter 12, like Chapter 13 and Chapter 11, is the type of bankruptcy that is known as a reorganization, where a plan is proposed to pay back some or all debt. A reorganization is different than a Chapter 7 liquidation.

But, Chapter 13 is for individuals and Chapter 11 is for large corporate entities. Each of those types of bankruptcies has certain elements that would not be conducive to a farmer or fisherman and their businesses. For example, Chapter 13 has deadlines and dollar limits that wouldn’t work for a farm or fishing business. Chapter 11 is more expensive and more complicated than is necessary for a simple farm or fishing business. So, Chapter 12 is tailored to the unique makeup of a farm or fishery.

What is a ‘family farmer’?

• a person or married couple (or a corporation owned or controlled by a single family) engaged in a farming operation with debts not more than $3,237,000
• no less than 1/2 of the debts (except for the residence) are from the farming operation for either the current year or each of the past two years
• more than 1/2 of the gross income must come from farming operations

How will I pay for an attorney?

Depending on the size of your estate – your assets and liabilities – the attorney’s fees can vary. We strongly recommend that you agree on a fee arrangement, in writing, with your attorney before you hire them.

If you have any questions about bankruptcy or need an attorney referral, please do not hesitate to contact us.