Chapter 12 Bankruptcy Family Farmer or Family Fisherman Bankruptcy
The chapter of the Bankruptcy Code
providing for adjustment of debts of a “family farmer,” or a “family fisherman” as those terms are defined in the Chapter 12 Bankruptcy Code.
Chapter 12 Bankruptcy was added to the Bankruptcy Code in 1986.
Chapter 12 Bankruptcy is designed specifically for the reorganization of family farms. Chapter 12 Bankruptcy is closely modeled after Chapter 13 (Chapter 13 is designed for wage earners; however, it has a higher debt ceiling, and therefore applies to many more farm operations).
Eligibility – Chapter 12 Bankruptcy
Is only available to persons who meet the definition of “family farmer” set forth in the statute. A family farmer may either be an individual or a corporation or partnership.
Individual – There are several tests which must be met in order to qualify as a family farmer. According to this definition, the farmer’s debts cannot exceed $3,544,525. Fifty percent of this index adjusted debt must arise from the farming operation. A farming operation includes “farming, tillage of the soil, dairy farming, ranching, production or raising of crops, poultry or livestock, and the production of poultry or livestock products in an unmanufactured state.” For purposes of computing the debt ceiling, any debt on a homestead will not be included unless it was granted in connection with the farm operation. In addition to the debt ceiling, the statute also requires that the farmer debtors must have earned more than one half of their gross income from farming in the year prior to the filing of the Chapter 12 Bankruptcy petition. The final requirement for eligibility is regular annual income. This income must be “sufficiently stable and regular to enable such family farmer to make payments” under a Chapter 12 Bankruptcy plan.
Chapter 12 Bankruptcy Attorney Kevin Cortright
For more information regarding chapter 12 bankruptcy or about our services or experience, or to schedule a no-cost, confidential consultation regarding your situation, please contact us:
Call: The Law Offices of Kevin Cortright
951-677-8064 Murrieta Office
760 542-7796 Palm Springs Office
Our Email Me at firstname.lastname@example.org
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