Chapter 12 Bankruptcy
Chapter 12 Bankruptcy
Chapter 12 bankruptcy is designed specifically for family farmers and fishermen. It is similar to Chapter 11 and Chapter 13, but more streamlined. It is often a faster process, and the regulations are simplified for ease of filing (relative to other corporate bankruptcies).
Who Is It For?
What Are The Limitations?
What Are The Benefits?
In addition to the simplicity of filing, Chapter 12 provides some other unique benefits to family farming and fishing enterprises. One of these is the ability to “cram down” debt. What this means is that in the case of a secured loan, the balance may be reduced to the current value of the property acting as collateral. For instance, a farmer could have taken out loans to purchase land, using the land as collateral, when the economy was booming and the land was relatively expensive. Economic downturns then may have reduced the value of land significantly. In the bankruptcy process, the amount of debt would then be reduced to this new, lower value.
Automatic stays, which are common to all bankruptcies, also have an additional effect in Chapter 12 filings. Because of the “family” nature of the enterprises, creditors are not only prevented from seeking collection from the debtor, but also from other debtors liable on debt with them.
How Does It Work?
Chapter 12 is a specialized, but highly valuable, form of bankruptcy. A lawyer experienced in this process can help determine whether Chapter 12 is the best way to file depending on your particular circumstance.
Contact us online or call 870-972-1150 to start the process. Set up a free, no-obligation consultation appointment with an experienced Arkansas bankruptcy lawyer.