Wellington Chapter 12 Bankruptcy Attorney
People who are familiar with the law will likely be at least somewhat aware of what a Chapter 7 or Chapter 13 bankruptcy is. However, for most people, a Chapter 12 bankruptcy is much more unknown, mostly because its requirements apply to a very small subset of people. If you fit its criteria, however, and you have been experiencing financial hardship, contacting our Wellington Chapter 12 bankruptcy attorneys to help you file under this specific chapter could very well save your business and possibly your more important assets, like your home.
Aimed At Agriculture
Chapter 12 is a part of the U.S. Bankruptcy Code aimed exclusively at family farmers and small fishermen, passed in reaction to a disproportionate number of bankruptcies resulting from the 1980s farm crisis. It is patterned roughly after Chapter 13, with its reorganization and payment plans, but the terms are generally somewhat more flexible. This is largely because fishing and farming are both somewhat seasonal work, and to require a payment from a debtor during the off season might seriously impact the person’s ability to provide for their family.
Like Chapter 13, a Chapter 12 bankruptcy does have a debt limit. However, the secured vs unsecured distinction is not made, at least not when determining eligibility – the regulations simply state that if a farmer has more than $4,031,575, or if a small fisherman has more than $1,868,200 in debt, they do not qualify to file under Chapter 12. It is also required that a family farmer show that at least 50 percent of their debts must originate from the farm, and for a small fisherman, the number rises to 80 percent of the debts that must originate from the fishing operation.
Filing Chapter 12
Filing under Chapter 12 is very similar to filing under Chapter 13, in that a petition is completed and filed, along with all the relevant financial information. Chapter 12 is only open to farmers and fishermen who have “regular income” (taking into account the offseason), so this must be shown to the court’s satisfaction. It is important to keep in mind that even if a person is filing singly, the court will ask for a spouse’s financial information as well, given that in some circumstances a spouse’s separate property can be reached by creditors.
One important factor in a Chapter 12 that is not technically available with filings under another chapter is a slightly expanded automatic stay. While in any bankruptcy, the automatic stay triggers so as to insulate the debtor from collections and lawsuits being filed, the stay in a Chapter 12 bankruptcy also protects co-debtors. Normally this protection is not offered in, say, a Chapter 13, but in this chapter co-debtors are insulated from attempts to collect on consumer debts (that is, debts incurred for any personal or household purpose) – though this applies to consumer debts only. Any business-related debt may still be fair game for a co-debtor.
Contact An Experienced Wellington Chapter 12 Attorney
Because Chapter 12 bankruptcies are rare, with only about 500 filed out of approximately 780,000 bankruptcies total between March 2017 and March 2018, you need an attorney who understands the specifics unique to this chapter of the Bankruptcy Code. The business minded Chapter 12 bankruptcy attorneys at Markarian & Hayes can sit down with you and work out a plan to attack the issue head on. Call us today to set up an initial consultation. We serve Wellington, Palm Beach Gardens, and Vero Beach.