Palm Beach Gardens, Vero Beach & Wellington Chapter 12 Bankruptcy Attorney
Back in the 1990s, the agricultural credit crunch sent many farmers and fishermen into bankruptcy, and Chapter 12 was created specifically for the purposes of helping this sector of the workforce escape their extreme debt. The Palm Beach Gardens, Vero Beach & Wellington Chapter 12 bankruptcy attorneys at our office are experts at Chapter 12 bankruptcy proceedings and can help you get the protection that you need from your creditors under the law.
Chapter 12 Farm & Fishermen Bankruptcy
Revamped in 2005, Chapter 12 bankruptcy is designed to protect “family farmers” and “family fishermen” that have regular annual income. It allows for debtor protection under the law and enables people in these professions to create a repayment plan for their creditors that happens over a period of three to five years. Chapter 12 bankruptcy differs greatly from other types of bankruptcy filings because it eliminates barriers that other debtors face filing under different chapters of the U.S. Bankruptcy Code.
Chapter 12 is designed to be more streamlined, less complicated, and less expensive than other types of bankruptcy filings, but it is still important to have an experienced West Palm Beach bankruptcy attorney guide you through the process. Debtors filing for Chapter 12 bankruptcy must be an individual, spouses, a partnership, or a corporation that operates as farmers or fishermen.
Eligibility to File Chapter 12 Bankruptcy
According to the Bankruptcy Code, the following criteria must be met to file as individuals or spouses under Chapter 12:
- The individual or husband and wife must be engaged in a farming operation or a commercial fishing operation.
- The total debts (secured and unsecured) of the operation must not exceed $4,031,575 (if a farming operation) or $1,868,200 (if a commercial fishing operation).
- If a family farmer, at least 50 percent, and if family fisherman, at least 80 percent of the total debts that are fixed an amount (exclusive of debt for the debtor’s home) must be related to the farming or commercial fishing operation.
- More than 50 percent of the gross income of the individual or the husband and wife for the preceding tax year (or, for family farmers only, for each of the 2nd and 3rd prior tax years) must have come from the farming or commercial fishing operation.
In order to file under Chapter 12 as a corporation or partnership, the following criteria must be met prior to filing the petition:
- More than one-half the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives.
- The family or the family and its relatives must conduct the farming or commercial fishing operation.
- More than 80 percent of the value of the corporate or partnership assets must be related to the farming or fishing operation.
- The total indebtedness of the corporation or partnership must not exceed $4,031,575 (if a farming operation) or $1,868,200 (if a commercial fishing operation).
- At least 50 percent for a farming operation or 80 percent for a fishing operation of the corporation’s or partnership’s total debts which are fixed in amount (exclusive of debt for one home occupied by a shareholder) must be related to the farming or fishing operation.
- If the corporation issues stock, the stock cannot be publicly traded.
Contact our Palm Beach Chapter 12 Bankruptcy Attorney
Very few bankruptcy laws exist specifically to help farmers and fisherman facing financial distress, and we can help you take full advantage of the protections of a Chapter 12 bankruptcy filing. If you or someone that you know needs help filing for West Palm Beach or Florida Chapter 12 bankruptcy, let the experienced attorneys at Markarian & Hayes help. Call or contact the office today for a private review of your claims.