As a farmer, keeping on top of your business, especially when the industry is uncertain, can be very difficult. Many farmers are building up debts that they struggle to have full control of, and they suffer under a great deal of stress and pressure as a result.
One solution that has the potential to work for many farmers in different situations is filing for bankruptcy under Chapter 12. Chapter 12 bankruptcy has been designed primarily with the farming industry in mind, and therefore, has ways for farmers to find a solution for their financial distress.
How do I know that I am eligible for filing Chapter 12 bankruptcy?
Although the benefits can be very helpful for farmers, not everyone is eligible for Chapter 12 bankruptcy. You are likely to be eligible if your debt is under $3,237,000 and if a minimum of 50 percent of your debt is in direct relation to your farming business. You must also be able to prove that more than 50 percent of your gross annual income is derived from farming activities.
How can Chapter 12 help me with my debts?
Chapter 12 will help you get some relief from your debts, while being able to create a business reorganization plan. The filing helps you create a more profitable business so that you can start to pay off your remaining debts with the profits made.
If you are interested in filing for Chapter 12 bankruptcy, you should consider carefully whether you think that the solution will be the right one for you before taking further action.
Source: Flag Inc, “An Introduction to Chapter 12 Bankruptcy: Restructuring the Family Farm,” accessed Feb. 01, 2018