If you are a farmer or a fishermen and your debt is getting out of control to the point where you are looking at bankruptcy options, Chapter 12 bankruptcy may help settle your debts.
This form of cheap bankruptcy was created specifically for farmers and fishermen to aid them in rough economic situations. This form of bankruptcy was designed to help protect them from having their assets for the business seized by creditors so that they can still perform labor tasks and it allows them to work to pay off the debts they owe.
In order to qualify for this form of bankruptcy you must adhere to some restrictions. First, the farming debt can not exceed the amount of $3.9 million dollars. Of that amount 80% has to be related to your business whether it be farming or fishing. You must have at least earned half of your money from farming and you must earn at least a sufficient level of income in order to be guaranteed for Chapter 12.
Chapter 12 bankruptcy was established in 1986 in order to protect fisherman and farmers from losing all of their equipment necessary to do their trade. Currently, this debt for farmers cannot exceed $3,972,650 and $1,757,475 for fishermen. And 80% of this debt has to relate to the business. Your home of residence does not qualify in the relation to the business.
This form of bankruptcy can be beneficial for farmers and fisherman during bad seasons. Because it protects you from losing all of your assets necessary to continue fishing and farming. It provides a way to work with debtors to pay off money owed and still continue to work for a living farming and fishing. This repayment period cannot exceed more than that of 5 years. Most judge proceedings will offer terms from that of 2-3 years in length to repay the debt.