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Chapter 12 bankruptcy can help you take control of farm finances

Operating a profitable family farm is not always easy. There are major expenses that the average person would never even think of that are necessary to successfully run a farm. Machinery for planting and harvesting crops, as well as seed stock or root stock for orchards, can be incredibly expensive. Many farmers finance these costs.

All it takes is one bad season or one severe weather incident on your farm to create a major cash flow problem. Family farmers may want to consider Chapter 12 bankruptcy, which allows for active business debt negotiations, for getting their finances back under control. Chapter 12 offers many of the same benefits of Chapter 11, but it is less expensive and complicated than Chapter 11.

12 bankruptcy offers financial relief for underwater farmers

When you no longer have enough income to make monthly mortgage payments on your farm land or credit payments to the finance companies that help you purchase your farm equipment, your family farm is in danger. Even if you manage to retain the property, the loss of machinery due to repossession could prevent you from performing critical farm tasks.

Monthly payments for major purchases can quickly consume the majority of your income and budget. When your income decreases, that can leave you vulnerable to missed payments, which can result in penalty interest rates and expensive fees. Chapter 12 bankruptcy allows you to create a workable debt repayment plan.

This form of bankruptcy can also protect your farm and your family from losing everything you have invested. If you are worried about the future of your agricultural enterprise, it may be time to consider if bankruptcy protections are right for you. You may be able to repay some creditors, while still retaining the right to discharge some of the amount you owe.

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