Giving a Fresh Start to Struggling Family Farms
Chapter 12, a little known area of Bankruptcy law, can have hugely beneficial effects for family farmers. Enacted in 1986 Chapter 12 of the Bankruptcy code was designed to meet the specific economic needs of family farming operations – in 2005 family fishermen were added – by providing a way for them to keep assets and reorganize their finances. The goal was to help family farmers and fishermen develop a plan to rewrite and pay off their debts and to begin anew rather than to shut down their farms. “Under the Bankruptcy Code, "family farmers" and "family fishermen" fall into two categories: (1) an individual or individual and spouse and (2) a corporation or partnership. Farmers or fishermen falling into the first category must meet four criteria as of the date the petition is filed in order to qualify for relief under chapter 12. The benefits to farmers and fishermen of filing Chapter 12 Bankruptcy are huge.
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