Orange County Chapter 12 Bankruptcy Lawyers
One of the more recent additions to the bankruptcy code is Chapter 12 bankruptcy. Farmers and fishermen in the Hudson Valley who are facing financial difficulties may be eligible for Chapter 12 bankruptcy. At the Law Offices of Michael D. Pinsky, P.C., we understand the intricacies of this type of bankruptcy and can help guide you each step of the way to find a financially secure future. For decades, our Newburgh bankruptcy lawyers have proudly represented a variety of clients, from farmers and fishermen to individuals and corporations. To learn more about what a chapter 12 bankruptcy lawyer at our firm can do for your financial future, contact the Law Offices of Michael D. Pinsky, P.C. today.
Understanding Chapter 12 Bankruptcy
Family farmers and fishermen who have a regular annual income but are facing significant financial challenges may be eligible to file Chapter 12 bankruptcy. This form of bankruptcy, like Chapter 13, allows the debtors to follow a three or five-year repayment plan, depending on the specifics of the financial situation. While Chapter 12 bankruptcy is reserved for family farmers or fishermen with “regular annual income” under 11 U.S.C. §§ 101(18), 101(19A), 109(f), seasonal farmers/fishermen may also be eligible.
Eligibility for Chapter 12 Bankruptcy as an Individual
If a farmer or fisherman wishes to file for Chapter 12 bankruptcy as an individual (as opposed to as a corporation), they must meet each of the following criteria:
- The individual (or his/her spouse) must be engaged in a farming or fishing operation of commercial nature.
- The total secured and unsecured debts of the business must not 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% while family fishermen must have at least 80%.
- More than half of the gross income of the individual (or their spouse) for the previous tax year must have come from the operation. For farmers only, this must also include the income of the 2nd and 3rd previous tax years as well.
Eligibility for Chapter 12 Bankruptcy as a Corporation/Partnership
If a farmer or fisherman wants to file for Chapter 12 bankruptcy as a corporation/partnership, it must meet each of the following criteria:
- More than half of the outstanding equity in the business must be owned by one family.
- 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.
Contact a New York Chapter 12 Bankruptcy Lawyer
At the Law Offices of Michael D. Pinsky, P.C., we understand how difficult it can be to struggle to keep your business afloat. When this becomes too much to bear, you may wish to consider your bankruptcy options. Our firm can help you understand your legal options and determine whether you are eligible for Chapter 12 bankruptcy. To learn more about how our skilled legal team can assist you, contact the Law Offices of Michael D. Pinsky, P.C. today to schedule a consultation.