When you are going through Chapter 12 bankruptcy, especially if you are in the farming business, it is likely that you will be wanting to avoid the liquidation of large assets. Chapter 12 allows for the possibility to do this because it means that you are able to restructure your business so that it is more economically efficient.
However, before going through Chapter 12 bankruptcy you may want to consider the possibilities you have to liquidate assets that are not needed or not essential to your business. This liquidation can help prepare your farm for the processes of Chapter 12 bankruptcy.
You should first decide on the assets that you would like to liquidate and create a full inventory. This will help you to keep track of each item and of the money coming into your accounts. You should also try to establish the true market value of each asset so that you can ensure that you are getting a good sale.
Remember that the process of selling assets can become a cost in itself, so keep this in mind and make sure that the assets are valuable enough to be worthwhile through this process.
You should spend time seeking out buyers that might be interested in your assets, especially if they are niche products relating to farming.
Asset liquidation is always an option to consider before filing for Chapter 12 bankruptcy. However if you are falling into debt and can’t face the liquidation of assets, then Chapter 12 bankruptcy is a great way to restructure your company for a more profitable future.
Source: rabin.com, “asset liquidation process,” accessed Sep. 29, 2017
