Although Chapter 7 and Chapter 13 are types of bankruptcy that are typically filed by individuals, Chapter 12 is also known as bankruptcy for farmers. The purpose of Chapter 12 is to provide assistance to farmers who are on the verge of bankruptcy. Farmers and anglers who have had a steady income from farming or fishing over the past few years are qualified to file for this type of bankruptcy. Most farmers and anglers have debt ratios that are too high to allow them to file for Chapter 11 bankruptcy or Chapter 13 bankruptcy.
Qualifying For Chapter 12
In order for an individual to qualify for bankruptcy for farmers, over 50 percent of your income must have come from your fishing or farming business. The individual must have sustained the income for at least three years. The amount of debt for farmers and anglers vary, but it cannot exceed a certain dollar amount. This debt percentage must also come from all operations related to the business.
Corporations Filing For Chapter 12
If a corporation needs to file for Chapter 12, specific rules must be followed before the law can be applied. Some of the rules are as follows:
- The family must have total control over the operations of the business
- The debt of the corporation must be the same as the debt of the individual angler or farmer
Information Needed To File Bankruptcy for Farmers
When you are ready to file for Chapter 12, you should schedule a consultation with a bankruptcy attorney. The attorney will discuss your case with you, any possible alternatives and the paperwork that you will need to submit to the bankruptcy court. In addition, the courts require this other information:
- List of expenses related to the business
- List of all business and personal property you own
- Your income and the income’s source
- List of creditors and any claims they may hold on the business
Family farmers and anglers should also know that they must also include information about their spouse, even if the spouse does not actively participate in the business.
Bankruptcy for farmers allows debtors to decide on a repayment plan with creditors. You will then have up to three months to file the documents for repayment to the court. Debtors are not exempt from their liabilities. However, a Chapter 12 bankruptcy discharge allows your business the opportunity it needs to recover financially.
Family farmers in North Georgia can learn about Chapter 12 bankruptcy by contacting Douglas Jacobson Law Firm for a free consultation.