Chapter 12 Bankruptcy: Can It Help Your Family's Struggling Farm

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If your family's small farm struggles to make ends meet each month, you may wonder if you can file bankruptcy to ease your burdens. Farmers may file Chapter 12 bankruptcy if they meet certain qualifications. You can learn more about Chapter 12 and how to file it below.

What's Chapter 12 Bankruptcy?

Chapter 12 bankruptcy is a relatively new form of debt relief for consumers and businesses who farm or fish for a living. Chapter 12 allows farm families and fishing families to file for relief if they have some form of regular income on hand. Like Chapter 11, Chapter 12 allows consumers to restructure their debts. This allows families and individuals to repay most or all of their debt within a specific amount of years.

To qualify for Chapter 12, half of your debt must be for farming. You must also have regular income available to repay your debtors. Some states allow farming families to use seasonal income as their way to repay their debts. Because bankruptcy laws can vary from state to state, an attorney can help you file Chapter 12. 

How Can You Find Relief Through Chapter 12?

A bankruptcy attorney will need a few pertinent things from you before they help complete your Chapter 12 forms. These things include a list of your debts, debtors' names, and banking account numbers. You may also need to present a copy of any debt collection letters mailed to you before you decided to file Chapter 12. Your Chapter 12 may stop or prevent creditors from suing you in court. 

Once you present an attorney with everything they require from you, they'll file your bankruptcy forms. An attorney will also prepare for the meeting with your creditors. Although the creditors' meeting may seem frightening to many filers, it's one of the most important steps in filing bankruptcy. An attorney will most likely answer the tough questions about your finances for you. 

After you and your attorney leave the creditors' meeting, a bankruptcy judge will make a decision about your case. Depending on your debt and available regular income, it may take you three years to complete your Chapter 12, or it may take you five years to repay your creditors. If you have any major concerns about how long it may take you to repay your debts, contact an attorney as soon as possible.

If you're ready to file Chapter 12 bankruptcy, contact an attorney today.

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