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Chapter 12 bankruptcy filings surge in 2019

American farmers are suffering due to the United States' trade wars with other countries. As a result, there has been an across-the-board uptick in Chapter 12 bankruptcy filings as farmers scramble to reorganize their debts and keep their farms.

Records for bankruptcy filings indicate that as of the end of September, there had been 580 Chapter 12 bankruptcy filings. This is a 24% increase from the same point in 2018. It's also the most filings since 2011, when 676 American farmers filed for Chapter 12 bankruptcy relief.

There is some good news, however. The number of Chapter 12 bankruptcy filings (160) for the third quarter of 2019 showed a slight decrease of 2% from the second quarter.

So, why are there more bankruptcies overall? Well, the farm economy did not enjoy the robust recovery that other industries did, thanks to retaliatory tariffs and a double-year run of poor planting, growth and harvest conditions.

To be clear, we are nowhere near the disastrous trend of the 1980s when farm bankruptcies reached historical heights. Some much-needed support is keeping many family farmers afloat during these adverse times, e.g., disaster aid and farm bill protections.

But for many small family farmers, that aid and assistance may be too little and too late. It is for these desperate farmers that filing for Chapter 12 bankruptcy might be most appropriate.

Filing for bankruptcy is a big decision to undertake after traditional methods of getting out of debt have already been tried and failed. If you think that Chapter 12 bankruptcy could save your farm, you owe it to yourself and your family to learn more about the process.

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