CHAPTER 12

Chapter 12

family farmer bankruptcies. This was created by Congress in 1986 (Chapter 12 became effective on November 26, 1986). Only a family-owned farm business can qualify for Chapter 12 and it must have debt less than $1.5 million and have 50% of its income from farming operations (Glossary of Common Bankruptcy Terms)

A simplified reorganization plan for family farmers whose debts fall within certain limits (SA-Bankruptcy.com)

A reorganization chapter for family farmers.It was enacted after Chapter 13 and is substantially similar.

also see plan (Bernstein's Dictionary of Bankruptcy Terminology)

The chapter of the Bankruptcy Code providing for adjustment of debts of a "family farmer," as that term is defined in the Code. (BankruptcyAction.com)

United Glossary of Bankruptcy Terms2012.

chapter 12

A reorganization chapter for family farmers. It was enacted after Chapter 13 and is substantially similar.also see Plan

US Bankruptcy2012.

Chapter 12 was enacted in 1986 specifically for farms and fisheries to make the bankruptcy process easier for these types of businesses. Prior to Chapter 12, farmers would have to either file for protection under Chapter 11, which can be very expensive and is mainly for large corporations, or Chapter 13, which is mainly for those with relatively small outstanding debts (generally not the case for farms and fisheries).

In order to qualify for this protection, both individuals and corporations must get the majority of income for the farm/fishery operations. There is also a limit on the size of the outstanding debt.