There are many different options to choose from when filing for bankruptcy. Chapter 12 bankruptcy is tailored to financially distressed farmers and fishermen. If you have questions about this type of bankruptcy, it is in your best interest to reach out to our experienced New York bankruptcy attorneys to discuss your options. Read on to learn more.
What is Chapter 12 bankruptcy in New York?
Chapter 12 bankruptcy is designed for “family farmers” or “family fishermen” with regular annual income. This allows financially struggling family farmers and fishermen to propose and carry out a plan to repay all or part of their debts.
How does an individual file for Chapter 12 bankruptcy in New York?
It is important to understand that those who file as individuals and those who file as a corporation have different eligibility when it comes to filing for Chapter 12 bankruptcy in New York. If you are a farmer or fisherman that is filing as an individual, you must meet the following:
- The total secured and unsecured debts of the business cannot exceed $1,924,550 for a commercial fishing operation or $4,153,150 for a farming operation.
- The individual (or his or her spouse) must be involved in a farming or fishing operation of commercial nature.
- A certain percentage of the total fixed debts must be related to the operation.
- Family farmers must have at least 50% and family fishermen must have at least 80%.
- More than half of the gross income of the individual for the previous tax year must have come from the operation.
How does a corporation or partnership file for Chapter 12 Bankruptcy in New York?
If you are part of a corporation or partnership and would like to file for Chapter 12 bankruptcy, you will need to meet the following factors:
- Over 80% of the corporate assets must be correlated to the operation.
- The total debt of the corporation must be no more than $1,924,550 for a fishing operation or $4,153,150 for a farming operation.
- More than half of the outstanding equity in the business must be owned by one family and the family must conduct the operation.
- Farmers must have at least 50% of the corporations’ total fixed debts be related to the operation, while fishermen must have at least 80% of the corporations’ total fixed debts be related to the operation.
- If the farming or fishing operation issues stock, the stock cannot be publicly traded.
If you have questions concerning Chapter 12 bankruptcy and if it applies to you, do not hesitate to reach out to our experienced New York bankruptcy attorneys today to discuss your case.
CONTACT A BANKRUPTCY LAWYER TO DISCUSS YOUR DEBT OR COLLECTION ISSUE
Michael D. Pinsky, P.C. represents clients in bankruptcy actions and related matters. Please call 845-394-2616 or contact the firm online to schedule a consultation.