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?

According to the bankruptcy code, Chapter 12 can be filed by either an individual/individual and their spouse or a partnership/corporation. In either case, the farmer or fisherman must have an annual income, even if it is seasonal. The code sets requirements for the percentage of income and debt that are required to be from the fishing or farming enterprise, and limits on the total amount of debt. In the case of partnerships and corporations, there are additional requirements regarding stock ownership. The majority ownership must still be controlled by one family.

What Are The Limitations?
Chapter 12 is only available to commercial fishing and farming operations. Additionally, the amount of debt is limited to just over 4 million dollars for farmers and just over 1.8 million dollars for fishing enterprises. Some kinds of debt are not able to be reduced or discharged, as with other types of bankruptcy filing. Domestic debts, such as child support and alimony are required to be paid 100% except in rare circumstances.
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 begins with a voluntary petition (the debtor files the petition), and then a trustee is appointed to review documents and oversee the process. Within 90 days of filing, a plan for repayment must be submitted. The plan must span from three to five years unless the court has given special permission for an extension. Creditors must receive at least the amount of money they would have received had the debtor filed for Chapter 7 bankruptcy. The debtor’s disposable income is given to the trustee where it is then distributed to creditors. Usually, the farming or fishing enterprise continues operation throughout the bankruptcy process. After the payments have been made and the set time period has passed, the debts are discharged.

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.

Schedule your consultation with our bankruptcy attorney in Arkansas today!

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Reviews

Crawley Law Firm, PA

Customer Reviews

H Barnes

Awesome. Answered every question each time all the time. Be prepared when you walk into his office because they're already waiting to tackle your issues. Good staff too. This lawyer gets this thang done. Have your ducks in a row.. They will help you all the way.

Mr. and Mrs. Dowdy 08/19/2022

We want to personally thank Mr. Crawley and his staff for everything. We want the whole office know we appreciate each of you for being kind and having patience with us throughout the process.

C. Henley

I have been struggling with coming to this decision to file bankruptcy, but you have made me feel comfortable through this process! Thank you for being so great with clients! You are a rockstar in my book! This is terrifying but you all have made it better! Thank you for all your help!!

Terri B. 01/20/22

Google
I would definitely recommend Crawley Law Firm. They were informative and very patient all the way through. I could always call with any other questions. Juliana was great! Michael and all of his staff were very professional and understanding all the way!

Robert N. 01/17/22

Google
Very responsive very respectful, and competitive on price. Always answered my questions with honor. Thanks Crawley team.

Sherry S. 01/12/22

Awe ty for always making me feel better. You are good people and I can't tell you how every single thing u have ever said or done u and ur hubs has helped us in some way. And this bankruptcy stuff is serious and ya'll take such good care of us and we appreciate you!

Brandy T. 12/23/21

Thank u so much y'all are so pleasant and beautiful people to work with.

Tonya D. 12/27/21

Google
Mr Crawley and all of his staff were extremely nice, truly caring and always there to help. I am very fortunate to have been able to work with all of them. Anytime you have a question all you have to do is call or email. They would ALWAYS get right back with you. If you need a GREAT attorney....Definitely give them a call!!!

Tonya.

Update: 12/27/2021

These people are awesome to work with. They don't just take care of you at the beginning and leave you to deal with stuff and you be lost. They are with you every step of the way. Even after it is all said and done they are a phone call, text or email away. You have multiple ways to stay in contact and they make you very comfortable asking any questions you may have. I highly recommend Mr Crawley and all of his staff. They are amazing. They are the best so please give them a call. I did and they also give you information to help you rebuild your credit. So they go above and beyond for sure. Happy New Year's and be sure you pick the right one when needed.

Arnold B. 11/04/21

They treat you like your someone; with understanding and caring ,really good folks i trust them you can too

Tonya D. 10/29/21

Google
Mr Crawley and all of his staff were extremely nice, truly caring and always there to help. I am very fortunate to have been able to work with all of them. Anytime you have a question all you have to do is call or email. They would ALWAYS get right back with you. If you need a GREAT attorney....Definitely give them a call!!!
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