Chapter 12 of the Bankruptcy Code is a legal provision that allows for the adjustment of debts for "family farmers" and "family fishermen." This chapter is specifically designed to help those engaged in farming or fishing operations who have regular annual income. It provides a structured way for these individuals to manage their debts while continuing their operations.
Chapter 12 is primarily used in bankruptcy law, specifically for individuals or entities involved in agriculture or fishing. It offers a way for family farmers and fishermen to reorganize their debts and maintain their livelihoods. Users can often manage their bankruptcy filings and plans using legal templates provided by services like US Legal Forms, which are drafted by qualified attorneys.
Here are a couple of examples of abatement:
Example 1: A family farmer with debts exceeding the limit due to crop failure can file under Chapter 12 to reorganize their debts and develop a payment plan over three to five years.
Example 2: A family fisherman facing financial difficulties due to market changes can use Chapter 12 to adjust their debts while continuing to operate their fishing business. (hypothetical example)
The primary statute governing Chapter 12 is found in the U.S. Bankruptcy Code, specifically under 11 U.S.C. § 1201 et seq. This section outlines the eligibility requirements and procedures for filing a Chapter 12 bankruptcy.
| State | Debt Limits | Additional Requirements |
|---|---|---|
| California | $3,544,525 for farming; $1,642,500 for fishing | Must demonstrate regular income from operations |
| Texas | $3,544,525 for farming; $1,642,500 for fishing | Same as federal requirements |
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Chapter 11 | Reorganization bankruptcy for businesses. | Primarily for corporations, no specific debt limits for individuals. |
| Chapter 13 | Adjustment of debts for individuals with regular income. | Lower debt limits compared to Chapter 12. |
If you are a family farmer or fisherman struggling with debt, consider filing for Chapter 12 to reorganize your debts. Gather all necessary documentation, including income statements and lists of debts, and consult with a legal professional. You can also explore US Legal Forms for ready-to-use templates to assist with your filing.
Browse our library of 85,000+ state-specific legal templates.