Last updated: October 15th, 2020
One breath summary: Chapter 12 is a special type of debt restructuring bankruptcy that is reserved for family farmers and family fisherman. It allows struggling family farms and fishing operations to reduce their debt load and to make their operation viable again.
Chapter 12 is one of the rarest and least-understood types of bankruptcy. Generally speaking, Chapter 12 is a special type of bankruptcy that is reserved for family farmers and family fisherman. Both people and business entities are eligible for Chapter 12 bankruptcy protection. There are certain restrictions related to farm-related income and debts.
In operation, Chapter 12 is a hybrid of Chapter 11 and Chapter 13 bankruptcies. In Chapter 12, the debtor proposes a debt repayment plan to repay all or a portion of the debts within a period of three to five years. That plan is reviewed by the Bankruptcy Court Judge and the creditors involved and the Judge confirms or rejects the plan. If the plan is rejected, the plan can be modified, or the case could be converted to a Chapter 7 bankruptcy. If confirmed, the plan is binding on all creditors. For more information about Chapter 12, please read the page about Chapter 12 bankruptcy.
If you would like more information and the opportunity to discuss whether Chapter 12 bankruptcy is an option for you, please feel free to contact Brian T. Hemphill.