Chapter 12 Bankruptcy

When family farmers and fishermen faced financial ruin in the 1980s, the United States government came to the rescue by establishing Chapter 12 bankruptcy, a special provision of the U.S. Bankruptcy Code that applies only to family farmers and fishermen. Designed to help struggling farmers and fishermen pay off their debt without sacrificing their valuable property and equipment, Chapter 12 is an option for family farmers or fishermen who see at least half of their income from farming or fishing activities and have less than $1.5 million in debt.

Chapter 12 differs from other bankruptcy options in a few crucial ways. First of all, the provision is only temporary, though it has been extended since its inception in 1986. This means that someday, Chapter 12 may expire and be unavailable to struggling farmers and fishermen. Second, Chapter 12 is a "reorganization" rather than a "liquidation" type bankruptcy, meaning that qualified individuals set up a plan to pay off some of their debts, then experience discharge of some debt after they have paid according to plan for three to five years.

Some debts are not eligible for discharge under Chapter 12 bankruptcy. These include debts related to fraud or personal injury and debts that relate to child support and alimony. Some debtors are eligible to a "hardship discharge" under Chapter 12, in which a debtor who experiences financial situations beyond his or her control experiences discharge of some debts even though they have not fully followed their repayment plan.

A farmer or fisherman who files for Chapter 12 bankruptcy need not formulate their financial plan with creditor input. In addition, they may sell lien-free property without receiving approval from creditors. This is in response to the special needs of financially-strapped farmers and fishermen, who often have larger debts and more expensive equipment and property than normal bankruptcy candidates.

If you're a Florida farmer or fisherman, you might qualify for Chapter 12 bankruptcy. However, this process can be complicated and it is strongly recommended that you consult with an experienced Florida bankruptcy lawyer as you prepare to seek Chapter 12 protection for your assets. Roberts Law Partners have a distinguished track record when it comes to Florida bankruptcy. See for yourself why our happy clients are entering new futures without debt - call today for a free bankruptcy consultation with an experienced Florida bankruptcy attorney. It's free and entirely confidential.

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