Read on and reach out to our skilled Newburgh bankruptcy lawyer today to learn more about the requirements for filing for Chapter 12 bankruptcy.
How does New York define Chapter 12 bankruptcy?
Chapter 12 bankruptcy is primarily used for those who are “family farmers” or “family fishermen” that have a regular yearly income. This type of bankruptcy allows financially struggling family farmers and fishermen to offer and create a plan to repay all or part of their debts.
If you have questions or concerns about Chapter 12 bankruptcy and would like to learn more about whether or not it is the best option for you, it is in your best interest to reach out to our firm today. Our determined legal team is here to help you with whatever financial struggles you are encountering.
What steps should a corporation or partnership take to file for Chapter 12?
Keep in mind that there are several eligibilities for those who file as individuals and those who file as a business for Chapter 12 bankruptcy in New York. If you are interested in filing for Chapter 12 and you are a corporation or partnership, you will likely be required to satisfy the following requirements:
- The entire debt of the corporation must be no more than $1,924,550 for a fishing operation or $4,153,150 for a farming operation.
- Over 80% of the corporate assets must be related to the operation.
- More than half of the outstanding equity in the business must be possessed by one family and the family must execute 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.
How should an individual file for this type of bankruptcy?
Just like you would filing as a corporation or partnership, you will want to keep in mind that the requirements for eligibility are different for those who are filing individually. As a result, as an individual filing for Chapter 12 bankruptcy, you will need to meet the following prerequisites:
- Family farmers must have at least 50% and family fishermen must have at least 80%.
- 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 specific percentage of the total fixed debts must be related to the operation.
- More than half of the gross income of the individual for the previous tax year must have come from the operation.
If you have additional questions or concerns regarding Chapter 12 bankruptcy, do not hesitate to reach out to our firm today to speak with a skilled Newburgh bankruptcy lawyer today.
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.