Chapter 12 Bankruptcy

This is similar to Chapter 13 but designed for family farmers or ranchers. It allows some more flexibility for those who do not have monthly income, but just get lump sum income once or twice a year. It also provides more flexibility for mortgages or other debts that include a balloon provision (requiring the entire balance to be paid off in a lump sum amount).

Farm Ranch Fisherman Reorganization

Chapter 12, or Farm Bankruptcy is a cross between Chapter 11 and Chapter 13 bankruptcy cases.

Chapter 12 is limited to farmers or fishermen.

Farming includes tillage of soil, dairy farming, raising of crops, poultry or livestock.

Generally approximately half of the non-homestead debt and at least half of the income should come from such farming or fishing operations.

Individuals or corporations can file Chapter 12.

The primary advantage of Chapter 12 is more flexibility than Chapter 13, and less expense than a Chapter 11 case.

Like Chapter 13, farm bankruptcy cases do not require a vote of creditors, and do not require monthly fees to the US Trustee’s office.

Unlike Chapter 13, there is much more flexibility in modifying mortgages in Chapter 12, including rewriting the mortgage for a term over 5 years with modification of the balance owed and the interest rate.

Also there is more flexibility in payments in Chapter 12. Chapter 12 anticipates that many farmers will have annual payments rather than monthly payments. There is also a provision specifically providing that the payment schedule should still leave funds available at the end of the bankruptcy to finance the next year’s operations.

Very few Chapter 12 bankruptcies are filed in the Tampa Division of the court, (none in 2012).

Despite that this firm has substantial experience in filing Chapter 12 cases, having filed a total of 7 Chapter 12 cases for debtors, and representing a creditor in another Chapter 12 case. Of these 7 cases filed, only one was dismissed, an exceptionally high success rate for these cases.

While there are a few attorneys trying to learn Chapter 12 now, Mr. Barnett has substantial expertise in this specialized type of bankruptcy.

Michael Barnett, Esq.
Michael Barnett, PA
506 N Armenia Ave.
Tampa, FL 33609-1703