Chapter 12 bankruptcy is very similar to Chapter 13. However, it only applies to family farms. This chapter allows the family to continue farming while restructuring and paying off past debts. Because it considers the unpredictable nature and seasonality of farming, it is better for farms than other bankruptcy options.
Bruner Wright P.A. handles both creditor and debtor bankruptcy cases. Our firm has the ability to create the best possible scenario for your bankruptcy. If you’re still wondering what Chapter 12 bankruptcy is, continue reading to find out!
Why Do People Prefer Filing Chapter 12 Bankruptcy?
Chapter 12 filings are not required for debtors to liquidate assets, unlike Chapter 7 filings. The debtor keeps all assets in the true sense. Most Chapter 12 filings only require the debtor to repay a small portion of what they owe.
This type of bankruptcy is generally less costly and more straightforward in terms of the required procedural steps. That’s why it is important to consult with Bruner Wright P.A. to protect your family’s rights.
Do You Qualify for Chapter 12 Bankruptcy?
Chapter 12 bankruptcy is only available to families in the fishing or farming industries. You will also need to meet a certain debt limit before filing for Chapter 12 bankruptcy. Family farmers cannot file this filing if they have more than 50% of their debt due to farming operations. However, this filing is not applicable to partnerships or companies involved in the farming and fishing industry.
These parameters can change at any moment. Therefore, it is always a good idea to speak with a bankruptcy lawyer like Bruner Wright P.A. Before you can make any decisions about whether Chapter 12 is right for you, we will be able to confirm the most recent in federal and state law.
In General, Chapter 12 Protection Is for Those Who:
- Co-own or work for a family farm or fishing business (defined below); or
- At least half of their gross income can be earned through fishing or farming; or
- Minimum half of their debts are related to fishing or farming (not exceeding $4,031,575 in 2017), though this amount can increase over time
* If the home is occupied, you can exclude one home loan from the calculation of the total debt.
What Is Considered a Family Farm for Chapter 12 ?
If your family owns and operates its own farm, this is exactly what Chapter 12 is for. It’s becoming more common for larger corporations to purchase a stake in the farm of your family members, despite the complex farming and fishing industry. For this reason, it might be a question of eligibility.
These are the requirements to be eligible for Chapter 12 family farming and fishing companies:
- A single family owns at least 50% of the partnership or business. Extended family members are usually considered part of the family
- Your extended family runs the business
- More than 80% of the business’ assets are related to fishing and farming operations
- Stock in the company is not publicly traded
How Do I File Chapter 12 Bankruptcy Papers?
Chapter 12 is a complex and sophisticated area of law. It is difficult to find accurate information because it is only available to those who are in the fishing and farming industries. Even many lawyers don’t have the experience to handle Chapter 12 cases.
The law regarding bankruptcy is constantly changing, so it’s easy for people to make mistakes. But these mistakes can be costly. Bruner Wright P.A. can help you act strategically and prudently, meet deadlines, and adhere to every aspect of the law to protect your future financial security.
When filing Chapter 12, there are many forms you will need to complete. To complete the forms accurately, you will need to gather and submit supporting documents. The bankruptcy court will require the debtor to provide a complete list of all creditors, along with the amount owed to each one, when filing Chapter 12.
You will need to declare your source and all of your assets when you file for Chapter 12 bankruptcy. Also, you will need to list all expenses incurred through your farming and fishing operations. Supporting documents should accompany these declarations. In order to agree on a repayment plan, you will need to meet with your creditors.
Chapter 12 bankruptcy will not discharge debts until all payments have been made in accordance with the repayment plan.
Bruner Wright P.A. has the experience and knowledge to help you get through this difficult time as efficiently and quickly as possible, with the best outcome possible for your case.
What Is the Typical Chapter 12 Repayment Term?
You generally have three to five years to repay your debts if you file for Chapter 12 protection. A skilled bankruptcy lawyer can help you set a schedule and calculate monthly payments that work for you and your creditors.
After that, the court trustee will approve your repayment plan. They may take up to 45 days to look at it before making a decision.
Contact Bruner Wright P.A.
We are here to protect the rights of individuals and businesses in bankruptcy. If you’re looking for the best Jacksonville Chapter 12 bankruptcy lawyer, contact Bruner Wright P.A. today!
Our Service Areas
- Tallahassee Fl
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Our team has more than 30 years of experience helping people file Chapter 7 bankruptcy, Chapter 11 bankruptcy, Chapter 12 bankruptcy, and Chapter 13 bankruptcy. We want you to achieve financial stability. Contact us today to schedule a consultation with a bankruptcy attorney about bankruptcy and foreclosure.