This is a fairly new form of bankruptcy. This was set up to help the family farms or family fisherman that have a regular income to develop a plan to help keep their assets while you repay all or part of your debt. This plan allows you to make an installment payment over 3 to 5 years. It is more streamlined, less complicated and less expensive than filing a Chapter 11. You can be either an individual, family, partnership or corporation Certain criteria must be met to be able to file under Chapter 12.
Individual or Family:
1) Annual income has to sufficient and regular to permit the debtor to make payments.
2) The individual or individual spouse must be engaged in the family farm or family fisherman.
3) The operation can not have more than 4,153,150 (farming) and 1,924,550 (fishing) in total debts (unsecured and secured).
4) The total debit are fixed amounts to the operation of the family farm 50% and family fisherman 80%
5) 50% of the gross income must come for the operations of the family farm or family fisherman.Partnership or Corporation.
Partnership or Corporation.
1) The stock or equity in the partnership or corporation has to be owned by one or more family or relatives.
2) The farming or commercial fishing operation mu be conduct by the family or its relatives.
3) More than 80% of the value of partnership or corporation must make up the assets of the operation.
4) Cannot have more than 4,153,150 (farming) and 1,924,500 (fishing) of total indebtedness.
5) The fixed amount of the partnership or corporations’ total debts can be more than 80% (fishing) or 50% (farming) and must be related to the operation.
6) Stocks if a corporation can not be traded.
The Cost of filing Chapter 12 is $275.00. Just like in Chapter 7, you will need to provide them with the following: 1. A list of all assets and liabilities; 2. Current income and expenditures; 3. A complete statement of financial affairs; and 4. All contracts and current leases. Just like in Chapter 7, filing a petition in the court will put a stop to most collection actions and calls. You have 90 days after filing the petition you must file a repayment plan. You will be discharged from this once you have complete the plan.