When people talk about well-paid jobs and expensive professions, farming rarely makes the list. People think about careers that require graduate degrees and years of apprenticeship rather than agricultural work.
While many farmers acquire the skills to operate an agricultural business early in life through family relationships, that doesn’t necessarily mean that operating a farm is low-cost or easy. Farmers have to invest heavily every year in equipment and other necessary supplies, such as seed.
If their crops fail or there is some kind of major setback, such as the rapid spread of illness among their livestock, they may sustain major losses and may generate very little revenue for the year. 2025 has seen a marked increase in the number of agricultural professionals pursuing bankruptcy relief.
What do farmers need to know about filing for bankruptcy?
There is a special option for farmers
There are different types of bankruptcy available for people and businesses in a variety of different challenging situations. Farmers are some of the only professionals who have the option of filing for Chapter 12 bankruptcy.
Chapter 12 bankruptcy involves restructuring debt. It can also allow farmers to cram down some of their financial obligations. They can eliminate excess debt based on the fair market value of the collateral property. A timely chapter 12 bankruptcy can help farmers prevent aggressive collection efforts and preserve key resources, including financed farmland and heavy machinery.
Asset protection is a top priority
Farmers often rely on financing to acquire land and may have long-term leases or loans attached to the equipment that they require to successfully run an agricultural enterprise. Their land could be at risk of foreclosure, while lenders or manufacturers who provide in-house financing might repossess vehicles after missed loan or lease payments.
Chapter 12 bankruptcy provides the relief of an automatic stay and can temporarily delay collection efforts that could affect agricultural operations. The filer can also negotiate with their lenders and creditors to establish a working repayment plan based on the current revenue generated by the farm.
Learning more about Chapter 12 bankruptcy proceedings can help struggling farmers take greater control of their financial circumstances. With the right support, farmers can address their financial challenges and protect their farm operations for years to come.
