Chapter 12 Bankruptcy
Chapter 12 bankruptcy is a type of reorganization bankruptcy similar to Chapter 13 but is available only for a family farmer, rancher or fisherman. Chapter 12 was originally created for farmers and ranchers and in 2005 the New Bankruptcy Law expanded Chapter 12 to include fishermen. Individuals, corporations, and partnerships are all eligible to file bankruptcy under Chapter 12 if they qualify as a family farmer (which includes farmers and ranchers) engaged in a farming or ranch operation or they qualify as family fishermen engaged in a commercial fishing operation. The terms "farming operation" has a broad definition that includes, in addition to farming, the following: tillage of the soil, dairy farming, ranching, production or raising of crops, poultry, or livestock, and production of poultry or livestock products in an unmanufactured state.
Why You Need a San Diego Chapter 12 Bankruptcy Lawyer
Chapter 12 is one of the rarely used bankruptcy filing options and few attorneys file Chapter 12 cases. It is a specialized type of bankruptcy that absolutely needs a San Diego Chapter 12 bankruptcy lawyer who is experienced in handling Chapter 12 cases. If your case is filed flawlessly, Chapter 12 can help you reorganize your debts even if you don't qualify for bankruptcy under other chapters due to having too much debt. If your case is not handled properly, your Chapter 12 case will be promptly dismissed and you will not obtain any of the benefits that you were seeking from your bankruptcy filing.
Who Can File Chapter 12?
Both individuals and businesses can file for Chapter 12. In order to file Chapter 12 bankruptcy, you must meet the bankruptcy legal definition of a family farmer, which includes a rancher or a fisherman. Because the definition of farming operation includes "ranching," a rancher can also file bankruptcy under Chapter 12 assuming all other requirements are met. If you are a family farmer, rancher or fisherman, you need to be aware of Chapter 12 because it may provide your best solution.
In addition to falling within the definition of a family farmer, your Chapter 12 attorney will need to prove to the court that the majority of the debts arise out of a farming operation (or ranching or fishing operation) and the majority of your income is received from the farming, ranching, or fishing operation. (There are other statutory requirements to qualify to file Chapter 12 and, similar to Chapter 13 bankruptcy, there is a statutory limit on how much debt you can have at the time of your Chapter 12 bankruptcy filing.)
Chapter 12 Debt Limits
To accommodate the higher amounts of debts that would typically be expected to be borne by a farming, ranching or fishing operation, Chapter 12 bankruptcy has significantly higher debt limits than Chapter 13 bankruptcy. Your Chapter 12 attorney will need to establish to the court that you are within the Chapter 12 debt limits.
When to File Chapter 12
Chapter 12 bankruptcy can be particularly useful for a family farm or ranch operation or commercial fishing operation that wants to file a reorganization bankruptcy to reorganize its debts but cannot spend the extraordinary time and money needed to file for bankruptcy under Chapter 11.
An individual family farmer, rancher or fisherman may also find Chapter 12 particularly helpful where the individual does not qualify for filing bankruptcy under Chapter 13 due to the lower debt limits associated with that Chapter but can still qualify under the significantly higher Chapter 12 debt limits.
If you are a family farmer, rancher or fisherman and need help reorganizing your debts, contact Bankruptcy Legal Center today to set up a free bankruptcy consultation with a San Diego bankruptcy attorney to determine if Chapter 12 is right for you.
