Everyone leads a different lifestyle and faces different struggles. As a result, there are a number of different options when it comes to filing for bankruptcy. Chapter 12 bankruptcy is specifically for farmers and fishermen facing financial difficulties. Read on to learn more.
Filing For Chapter 12 Bankruptcy as an Individual v.s. Corporation
Those who file as individuals and those who file as corporations will have different eligibility.
If you are a farmer or fishermen filing as an individual, you must meet the following criteria:
- The individual (or his or her spouse) must be engaged in a farming or fishing operation of commercial nature.
- 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.
- 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.
If you wish to file for Chapter 12 bankruptcy as a corporation/partnership, you will have to meet the following criteria:
- More than half of the outstanding equity in the business must be owned by one family and the family must conduct the operation.
- Over 80% of the corporate assets must be related 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.
- 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 any questions or concerns about filing for Chapter 12 bankruptcy, our firm is here to help. We understand that this can be a stressful time, and we are here to walk you through the process every step of the way. Reach out today to discuss your options with an experienced and dedicated bankruptcy attorney.
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.