Chapter 12 Bankruptcy for Farmers and Fishermen
Chapter 12 is a special form of restructuring bankruptcy tailored for individuals whose primary source of income is derived from a family farming or family fishing organization. The Cedar Rapids bankruptcy attorneys at Hong Law, PLC, can help you uphold the integrity of your financial future by helping you file for Chapter 12 bankruptcy. We have helped clients restructure their debts in ways that allow them to continue operating their family business.
Qualifying for Chapter 12 Bankruptcy
Originally enacted in 1986 as an answer to the immense pressure farmers and fishermen found themselves under at the time, Chapter 12 bankruptcy’s provisions were finally made permanent by Congress in 2005. Though it offers critical relief, very few debtors actually qualify for bankruptcy under this chapter. In order to be considered eligible, the individual debtor or husband and wife must meet the following criteria:
- Engage in a farming or commercial fishing operation
- Owe up to $4,031,575 for farmers and up to $1,868,200 for fishermen
- Attribute 50% of their total debts to farming operational expenses or 80% of their total debts to fishing operational expenses
- Derive over 50% of their gross income in the preceding tax year from either farming or fishing operations
Partnerships and corporations will not be eligible for Chapter 12 bankruptcies unless more than 50% of their stock or equity interests are owned by a single family.
Contact a Cedar Rapids Bankruptcy Attorney
If you are a commercial farmer or fisherman and struggling to deal with heavy financial burdens, Chapter 12 bankruptcy may be a good option for you. To further explore your options, contact the Cedar Rapids attorneys of Hong Law, PLC, by calling (319) 294-5853 today.
Coralville, IA 52241
Phone: (319) 354-1804
Map to our Coralville Office