Chapter 12 Bankruptcy - Who Does it Help

Posted: 23 Aug 2008 | Categories: Bankruptcy

To qualify for Chapter 12 you must have a family history in one of the two industries and have had at least 50% of your total family income from either farming or fishing. In addition you must also have no more total debt than $3,237,000 if your are a farmer, or no more than $1,500,000 if you are a fisher. And one further condition is at least 50% of the total debt must be related to business operation for farming or 80% for fishing.

Partnerships and corporations can also file for a Chapter 12 Bankruptcy if all of the following are met:

More than 50% of the stock must be owned by one family. The stock cannot be publicly traded.
The majority family must be personally managing the operation.
No less than 80% of the corporations value must be related to farming or fishing.
The total debt amount is the same as for an individual - farming $3,237,000 and 50%; fishing - or $1,500,000 and 80%.

To complete the form to file for a Chapter 12, you will need the following information:

all creditors, amounts owed and nature of their claims
Debtors income and source.
property owned by debtor.
Descriptive list of farming/fishing expenses

If you are married, you must include this information for your spouse even if the spouse is not included in this petition.

A trustee is appointed by the court that will hold meetings of your creditors after you file your petition. The debtor is placed under oath and is questioned by both the trustee and creditors concerning his debt and repayment plan.

The debtors are given their amounts and dates that payments will be made and a the creditors are reassured under penalty of law that the debtor will repay the debts deamed reasonable.
Once a payment plan is reached and all parties sign it, as long as the judge agrees the bankruptcy proceedings are concluded.

If you can be classified legally as a Family Farmer or Family Fisherman, Chapter 12 Bankrupty can hold significant advantages over Chapter 7 or Chapter 12 Bankruptcy. You stand to lose a lot more if you do not attempt a Chapter 12 if you qualify.The choice is yours.

You can also find more info on Bankruptcy. Bankruptcybliss.com is a comprehensive resource which provide information about Bankruptcy.

Tim_Wilson