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Family Farmer Bankruptcy Lawyers - LawInfo.com

Chapter 12 Bankruptcy Lawyers

Family farmer bankruptcy lawyers are ready and available to help you file for bankruptcy under Chapter 12.

Chapter 12 of the Bankruptcy Code was enacted by Congress in 1986, specifically to meet the needs of financially distressed family farmers. It allows the family farmers to pay their debts while continuing their farming operations. Chapter 12 bankruptcy laws have eliminated many of the barriers that family farmers had faced when seeking to reorganize successfully under either Chapter 11 or 13 of the Bankruptcy Code. Chapter 12 is more streamlined, less complicated, and less expensive than Chapter 11, which is better suited to the large corporate reorganization and an individual that doesn’t qualify to file for Chapter 13. Chapter 12 is much more advantageous to the family farmer than Chapter 13 because Chapter 13 was designed for wage earners who have smaller debts than those facing family farmers.

Chapter 12 is the only temporary bankruptcy law in effect because Congress could not be sure whether Chapter 12 relief for the family farmer would be required indefinitely. Accordingly, the law, which first provided that no Chapter 12 cases could be filed after September 30, 1993, was extended January 1, 2004, and has now been extended yet again through July 1, 2005. In the absence of Chapter 12, insolvent farmers’ bankruptcy options included reorganization under Chapter 11 or 13, or liquidation under Chapter 7. Retroactive reinstatement now allows debtors who may have filed under alternative chapters of the Code during the period when Chapter 12 was not in effect to convert their cases to Chapter 12.

Converting Chapter 7, 11 or 13 Bankruptcies to Chapter 12

Has your family farm filed for bankruptcy under Chapter 7, 11 or 13? Did you know that it could potentially be converted to Chapter 12? Contact a LawInfo Lead Counsel qualified bankruptcy lawyer to find out your options. It could make a big difference for you.

Who qualifies for Chapter 12 bankruptcy?

Under the Bankruptcy Code, those eligible to file as "family farmers" fall into two categories: (1) an individual or individual and spouse and (2) a corporation or partnership. Those falling into the first category must meet each of the following four criteria as of the date the petition is filed in order to qualify for relief under Chapter 12.

The individual or husband and wife must be engaged in a farming operation.
The total debts (secured and unsecured) of that farming operation must not exceed $1.5 million.
Not less than 80% of the total debts which are fixed in amount must be related to the farming operation.
More than 50% of the gross income of the individual or the husband and wife for the preceding tax year must have come from the farming operation.

In order for a corporation or partnership to fall within the second category of debtors eligible to file as "family farmers," the corporation or partnership must meet each of the following criteria as of the date of the filing of the petition:

More than one-half of the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives.
The family or the family and its relatives must conduct the farming operation.
More than 80% of the value of the corporate or partnership assets must be related to the farming operation.
The total indebtedness of the corporation or partnership must not exceed $1.5 million.
Not less than 80% of the corporation’s or partnership’s total debts which are fixed in amount must come from the farming operation owned or operated by the corporation or partnership.
If the corporation issues stock, the stock cannot be publicly traded.

How much does it cost to file for Chapter 12 bankruptcy?

The current court fees for Chapter 12 bankruptcy are $239. You may also have to pay other court costs, as well. Attorney fees are extra, but very worthwhile. An experienced bankruptcy lawyer can help you with the paperwork requirements and repayment plan that must be submitted to the court within 90 days. The bankruptcy lawyer will also provide you with the best possible representation that help assure that the repayment plan the court approves will be one you can afford. Contact a bankruptcy lawyer for complete details on the cost breakdown for filing a Chapter 12 bankruptcy.

Should I retain a lawyer?

Are you a family farmer in financial distress? Have you previously filed for bankruptcy under Chapter 7, 11 or 13? If you’ve previously filed under Chapter 7, 11 or 13, you may be able to convert your filing to a Chapter 12. Contact a LawInfo Lead Counsel qualified bankruptcy lawyer to see if you can convert your already existing bankruptcy to Chapter 12. If you have not yet filed, but feel you need to in order to save your farm, contact a bankruptcy attorney now! As you know, Chapter 12 is a temporary measure put in place by Congress for financially-distressed family farm operations. It is due to be repealed in July 2005, so you need to contact a bankruptcy lawyer right away. Any delays could mean dire consequences for your far, so act now!