Though most bankruptcy filings are under Chapter 7, Chapter 11 or Chapter 13, there are distinct advantages available to family farmers in a bankruptcy petition under Chapter 12 of the federal bankruptcy laws. This blog post addresses who qualifies to file for protection under Chapter 12, as well as some of the differences and similarities between a Chapter 12 filing and a Chapter 13 filing.

At the office of bankruptcy attorney Carrie Weir, in Rockwall, Texas, I provide a free initial consultation to individuals and business owners considering filing for bankruptcy. For a private meeting, contact my office online or call me at 972-772-3083 to set up an appointment.

Are You a Family Farmer Entitled to Protection under Chapter 12?

According to the law, to be eligible for protection under Chapter 12, you must be either a person or a married couple (or a corporation owned or controlled by a single family) engaged in a farming operation with debts that do not exceed $3,792,650. In addition, at least half of your debt must come from the farming operation. You must also have regular income, so that you can afford to make payments set up under Chapter 12.

Higher Debt Ceilings

The amount that a family farmer can owe and still seek reorganization is substantially higher than that for someone filing Chapter 13 (under $1.5 million dollars for all debt), as well as for “family fishermen” who file under Chapter 12 ($1, 757,475).

Greater Flexibility with Secured Debt

In a Chapter 12 filing, the debtor can extend payments on secured debt, such as a mortgage, beyond the five year plan period, an option not available in a Chapter 13 petition.

Similarities to Chapter 13

As with a Chapter 13, a Chapter 12 bankruptcy petition is entirely voluntary. A creditor cannot force a family farmer to file for protection under Chapter 12. In addition, there is a “co-debtor stay,” which prohibits creditors from trying to collect debts from co-signors of debtors in Chapter 12.

Contact Heath, TX Bankruptcy Attorney Carrie Weir

I provide a free initial consultation to anyone with questions or concerns regarding a bankruptcy filing. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.

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Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

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