Chapter 12 bankruptcy is fundamentally analogous to Chapter 13 bankruptcy. Similar to Chapter 13, Chapter 12 permits an individual to undergo a financial reorganization. The purpose of both chapters is to permit a debtor to restructure his or her debts through a court-supervised procedure. Both provide complete and immediate relief once the court accepts your application. However, while Chapter 13 bankruptcy is designed for the average American individual or family undergoing debt restructuring, Chapter 12 bankruptcy is designed specifically for farmers and fishermen.
Provisions
Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986 established the modern section of the bankruptcy legislation protecting family farmers and fishermen. Originally intended as an interim measure until more permanent legislation could be passed (intended to expire in 1993), the act was repeatedly extended until it became permanent in 2005.
This form of bankruptcy allows farmers and fishermen who meet the Act's requirements to take advantage of higher debt ceilings and a number of additional exemptions not permitted under Chapter 13 in other circumstances.
Requirements
For a farmer or fisherman and his or her family to be eligible to file for Chapter 12 bankruptcy, he or she must satisfy the four conditions listed below.
The filer must be employed in agricultural or fishing activities. The filer cannot have more than $3,544,525 for agricultural operations and $1,642,500 for fishing operations. These figures include both secured and unsecured obligations.
A minimum of fifty percent of a farmer's debts must relate to agricultural expenses. At least eighty percent of a fisherman's debts must be associated with the fishing operation. Over the past several years, at least fifty percent of the farmer or fisherman's income must have come directly from their agricultural or fishing operation.
If you are a farmer or commercial fisherman with queries about how bankruptcy protection can assist you, contact the bankruptcy lawyers of DeLadurantey Law Office, LLC in Milwaukee today.""
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