HOW CHAPTER 12 BANKRUPTCY WORKS
Chapter 12 part of the Bankruptcy Code designed specifically for farmers and fisherman., because Congress realized that agricultural operations need additional flexibility because of the nature of the agricultural industry.
You can file a Chapter 12 bankruptcy if you are an individual or a corporation, as long as your assets are primarily related to farming or fishing operations and at least 50% of your debt is related to farming operations, or 80% of your debt related to fishing operations.
Chapter 12 allows you to keep land, equipment, and other assets needed for you to farm or fish. Loan terms can be modified to make payments more affordable. Blanket crop liens that cover future years can be modified or eliminated so that you can obtain new financing. Filing a Chapter 12 case immediately stops all collection efforts by your creditors. Once you file, your creditors must stop all foreclosure proceedings, cannot repossess equipment, and cannot contact you to demand payment.
Chapter 12 cases are assigned a trustee familiar with the agricultural industry to help oversee your case who works with you and your attorney to obtain approval for a plan to repay your creditors, typically over three to five years. During this time, you can continue to farm or fish, and make annual payments to the trustee according to your plan. Once you complete your plan payments, any debt not provided for in your plan will be discharged.
Contact our experienced bankruptcy attorneys in North Carolina
Stubbs & Perdue can assist you Chapter 12 bankruptcy throughout Eastern North Carolina. Call 1-800-348-9404 or contact us online to schedule your consultation at our New Bern or Raleigh offices.