What is the Chapter Twelve Family Farmer Bankruptcy?
Chapter 12 Bankruptcy of the Bankruptcy Code was enacted by Congress in 1986, specifically to meet the needs of financially distressed family farmers. The primary purpose of this legislation was to give family farmers facing bankruptcy a chance to reorganize their debts and keep their farms. The debtor must file a plan of repayment with the petition or within 90 days afterward, unless the court determines that the need for an extension is attributable to circumstances for which the debtor should not be held accountable. Upon successful completion of all payments under a chapter 12 plan, the debtor will receive a “discharge” which extinguishes the debtor’s obligation to pay any unsecured debts that were included in the plan, even though they may not have been paid in full. Under the Bankruptcy Code, those eligible to file as “family farmers” fall into two categories: (1) an individual or individual and spouse and (2) a corporation or partnership. Those falling into the first category mu
