Chapter 12 is one of the less talked-about chapters in the US bankruptcy code, largely because it is more niche and more specific than the more universal Chapters 7, 11, and 13. While these other forms of bankruptcy declaration are used by the vast majority of Americans and American businesses seeking debt protection under the US Government, Chapter 12 is specifically for Americans working in the agricultural fields.
The basic structure of Chapter 12 bankruptcy is very similar to Chapter 13. Like Chapter 13, Chapter 12 allows for an individual to take on a financial reorganization process. The government's goal in both chapters is to allow a debtor to restructure his or her debts in a court-ordained process. They both offer immediate, complete relief once the courts accept your application. However, while Chapter 13 is meant for the average individual American or family going through the debt restructuring process, Chapter 12 bankruptcy is meant specifically for farmers and fishers.
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Provisions
The modern section of the bankruptcy code protecting family farmers and fishers was created under the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986. While originally meant as a temporary stop-gap until more permanent legislation could be passed (designed to lapse by 1993), the act was extended several times until it was made permanent in 2005.
Basically this form of bankruptcy allows farmers and fishers who meet the requirements listed in the Act to take advantage of higher debt ceilings, and a number of additional exemptions not allowed in other circumstances under Chapter 13.
Requirements
For a farmer or fisher and his or her family to qualify to file for Chapter 12 bankruptcy, he or she must meet the following four requirements:
· The filer must be engaged in a farming operation or a fishing operation. · The filer must have no more than $3,544,525 for farming operations, or $1,642,500 for fishing operations. These numbers count both secured and unsecured debts. · At least 50% of a farmer's debts must be related to farming expenses. At least 80% of a fisher's debts must be related to the fishing operation. · At least 50% of the farmer or fisher's income for the past several years must have come directly from their farming or fishing operation. If you're a farmer or commercial fisher and you have questions about how bankruptcy protection can help you, visit the Milwaukee bankruptcy attorneys of DeLadurantey Law Office, LLC, today.
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