Chapter 12 Bankruptcy

"Family Farmer"


  • Individual - must be an individual, not a partnership or corporations
  • Debt must not exceed $3,792,650
  • Must have regular income
  • At least 50% of debt must be from farming operation
  • At least 50% of family income must be from the farming operation

Purpose for Chapter 12

Stop Creditors Actions - filing a Chapter 12:

Stops lawsuits, collection activities, and harassment
Stops sheriff sales and repossessions
Stops wage attachments for student loans and the IRS
Stops utility shut-offs (and restores service)

Restructure Debts - obtain approval of a monthly payment plan to:

Re-amortize farm secure debt over thirty years
Adjust the interest rate on farm debt
Cure mortgage defaults
Maintain monthly mortgage payment
Cure lease arrears
Pay real estate and income taxes over 5 years
Reduce or eliminate charge card and other unsecured debts
Reduce or eliminate "old" income taxes
Reduce interest rates on vehicle loans
Reduce vehicle loan debt for loans more than 910 days old

Fresh Start - at the end of the chapter 12 plan the debtor receives a discharge (legal forgiveness) of dischargeable debt. Normally the only debt which remains after the chapter 12 ends are secured farm loans.


Chapter 12 representation is charged on a hourly basis. The fee is reasonable. Most of the fee is paid in monthly payments as a part of your monthly plan payments.

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