If you would like to learn about your eligibility for Chapter 12 bankruptcy, continue reading this blog and reach out to our skilled Newburgh bankruptcy lawyers today.
What is Chapter 12 bankruptcy?
The purpose of Chapter 12 bankruptcy is for those who are “family farmers” or “family fishermen” that have regular annual income. This form of bankruptcy allows financially struggling family farmers and fishermen to offer and devise a plan to repay all or part of their debts.
To learn more about Chapter 12 and if it is the best option for you, reach out to our firm. Our dedicated legal team is on your side.
How can a corporation or partnership file for chapter 12 bankruptcy?
You will want to recognize that there are different eligibilities for those who file as individuals and those who file as a corporation for Chapter 12 bankruptcy in New York. If you would like to file for Chapter 12 and you are a corporation or partnership, you will need to meet the following requirements:
- 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 execute the operation.
- Over 80% of the corporate assets must be related to 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 can an individual file for Chapter 12 bankruptcy in New York?
As previously mentioned, the requirements for eligibility are different for those who are filing individually. With that being said, as an individual filing for Chapter 12 bankruptcy, you will need to meet the following:
- The individual, or his or her spouse, must be involved 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 specific 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 would like to learn more about Chapter 12 bankruptcy, reach out to our firm today and speak with a 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.