What A Chapter 12 Bankruptcy Lawyer Do For You
Looking for a Chapter 12 bankruptcy lawyer in Colorado? You’ve come to the right place. We have helped hundreds of clients navigate the bankruptcy process to eliminate millions of dollars in debt. An experienced bankruptcy lawyer can safely guide you through the Chapter 12 bankruptcy process to help you sustain your family farm operation.
What Is Chapter 12 Bankruptcy?
Chapter 12 bankruptcy allows a “family farmer or family fisherman with regular income” to reorganize their debts, much like an individual can reorganize her debts under Chapter 13 bankruptcy or a business can do under Chapter 11 bankruptcy.
Congress strengthened Chapter 12 bankruptcy rules during the Great Depression of the 20th Century to protect family farmers and fisherman who were especially hard hit at that time.
Chapter 12 is more streamlined than those other chapters to help meet the needs of family farmers and fisherman and less expensive than Chapter 11.
Who Can File Chapter 12 Bankruptcy?
Before a debtor can file a Chapter 12 bankruptcy, she must meet several criteria that are set out in the Bankruptcy Code. First she must meet the definition of a family farmer under the Bankruptcy Code. A family farmer under the Code is someone who is an:
(A) individual or individual and spouse engaged in a farming operation whose aggregate debts do not exceed $10,000,000 and not less than 50 percent of whose aggregate noncontingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse unless such debt arises out of a farming operation), on the date the case is filed, arise out of a farming operation owned or operated by such individual or such individual and spouse, and such individual or such individual and spouse receive from such farming operation more than 50 percent of such individual’s or such individual and spouse’s gross income for—
Second, she must have “regular income”. Under the Bankruptcy Code, regular income means income that is stable and regular enough to allow her to make payments under a Chapter 12 reorganization plan.
Chapter 12 Bankruptcy Options: Chapter 7 And Chapter 13
Family farmers may also be able to file Chapter 7 or Chapter 13 bankruptcy. However, Chapter 7 bankruptcy will only take care of personal debts and will usually require the farming operation to cease. Chapter 7 bankruptcy might be a good option if the farmer wants to stop farming. Chapter 13 bankruptcy reorganizes personal debt and is probably a good option only if the farming operation shuts down or if the farmer is only dealing with personal or consumer debt. The farming operation will remain liable for any business debt in the farm’s corporation’s entity, if there is any.
Talk To A Top-Rated Chapter 12 Bankruptcy Attorney To See If Chapter 12 Bankruptcy Is Your Best Option
If you’re struggling with your farming or fishing operation, we hope you’ll give us a call. We offer free consultations with an experienced Colorado Chapter 12 bankruptcy lawyer to discuss whether or not bankruptcy may be a good option. The easiest way to schedule an appointment is by clicking here.
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