For many people, agricultural work is more than a source of income. It is a lifestyle and potentially also a family tradition. The home where they live is part of the farm, and every aspect of their daily schedule revolves around the production of specific crops.
Whether someone cultivates citrus fruits for corporate grocery stores or heirloom vegetables for sale at the local farmers market, they likely take great pride in helping to feed the United States. There is a quiet dignity that comes from working the land to support oneself and one’s family.
Unfortunately, many skilled and devoted family farmers are in financially precarious positions. The costs of machinery, manual labor and land leave them with constant financial obligations. A few failed crops or a single bad season at the farm might result in a farmer defaulting on their financial obligations to others. The decision to file a Chapter 12 bankruptcy could potentially help an agricultural professional in Florida protect their resources and their livelihood.
Chapter 12 bankruptcy helps farmers regain control
Certain types of bankruptcy are available for individuals or businesses. A struggling company or a professional in between jobs might qualify for a Chapter 7 bankruptcy. Typically, only farmers and professional fishermen qualify for Chapter 12 bankruptcy.
There are limits to the total amount of debt and also rules regarding how much of an individual’s income comes from the farm if they hope to qualify for a Chapter 12 filing. If they qualify, a farmer can protect themselves and their agricultural operations from pending lawsuits and other collection efforts.
A Chapter 12 bankruptcy involves negotiating a payment arrangement to protect crucial agricultural assets while continuing to meet baseline financial obligations. After making three to five years of structured payments, farmers can discharge certain debts, allowing them to move on from a period of financial hardship while retaining the equipment and land necessary to maintain their agricultural operations.
Understanding how Chapter 12 bankruptcy works can help a struggling family farmer take control of their finances and protect their most valuable resources. A successful bankruptcy can preserve farmland and allow a farmer to minimize some of their financial obligations.
