Chapter 12 bankruptcies are intended to help a family farmer or a family fisherman restructure debt while maintaining continued operations. There are a number of eligibility requirements of a Chapter 12 bankruptcy that you should understand before filing, as this may not be the right option for your business.
Current law dictates total debts of a family farmer may not exceed $4,411,400. A minimum of 50% of noncontingent, liquidated debts must be related to farm or fishing operations – this is exclusive of home loans on the principal residence. Additionally, more than 50% of gross income must come from the farming operation for a certain period of time prior to filing. A family fisherman’s debts may not exceed $2,044,225 and a minimum of 80% of debts (excluding the mortgage on a principal residence) must be from the fishing operations. If you are unsure whether your farm or fishing operation qualifies under total debt criteria, consult with an experienced bankruptcy lawyer in your state.
Corporations or Partnerships
Your operation may qualify for Chapter 12 bankruptcy as a corporation or partnership if more than 50% of the corporate entity is owned by one family or an extended family member. Qualifying family members must operate the farm or fishing operation.
The stock in the farming or fishing operation cannot be publicly traded in a Chapter 12 bankruptcy for a corporation or partnership.
The farming or fishing operation will benefit from an automatic stay relating to the majority of collection actions. Like other bankruptcies, the creditor also has rights, which may result in the allowance of continued collection actions against the operation or its owners.
While a stay is in effect, creditors cannot continue to pursue actions such as foreclosure, repossession, or lawsuits. The automatic stay is one of the most beneficial mechanisms of a Chapter 12 bankruptcy. The debtor can continue to negotiate with creditors while the stay is in effect and file a payment plan with the court, which may result in the amendment of loan or interest terms.
Chapter 12 Lawyer in Georgia
If you have been considering hiring a bankruptcy lawyer in Georgia, H. Lehman Franklin P.C. has the experience and knowledge you need to guide you through the process. We understand the unique financial challenges farmers and fishermen face. Our team will provide excellence in advice on the pros and cons of Chapter 12 bankruptcy.
There are numerous options to consider outside of bankruptcy, which is a complex process, regardless of your operation and financial circumstances. You may need the expertise of a knowledgeable lawyer that has helped business just like yours. If you decide to go ahead with filing Chapter 12 bankruptcy, H. Lehman Franklin P.C. has the tools to expertly lead you through the process. Call the offices of H. Lehman Franklin P.C. if you are a fisherman or farmer who needs recommendations on financial reorganization in Georgia. We can be reached today on 912-764-9616 or via email at email@example.com for a call back from one of our team.