Chapter 12 Reorganization

Chapter 12 bankruptcy in Georgia.  Chapter 12 cases, also referred to as “farm reorganization” or “family farmer bankruptcy,” is a process that allows farms to restructure their assets and debts through a plan of reorganization.  Qualifying for Chapter 12 varies depending how whether the farmer is an individual or a corporation.  Generally speaking, if your assets and debts are primarily related to farming activity, then you probably qualify to file a Chapter 12.

A Chapter 12 bankruptcy case is much more complicated than a Chapter 7 or Chapter 13 because there is more property, more debt, and an ongoing business.  Confirmation of a Chapter 12 plan is more involved and regularly contested, while Chapter 13 plans are often uncontested.  Also, very few Chapter 12 bankruptcies are filed nationwide – partly because you must be a farmer to qualify and because many other attorneys are unfamiliar with Chapter 12.

Our attorneys can advise you on whether Chapter 12 would be the best solution to solving your farm’s financial problems.  Chapter 12 has some exclusive benefits, including the ability to lower your mortgage on your residence to the value of the property, paying certain debts over a period longer than 5 years, eliminating taxes incurred in the sale of farm assets, and having higher debt limits than Chapter 13.  Like Chapter 13, Chapter 12 also involves the submission of a repayment plan, however payments usually do not start until the plan is approved.

If your farm is struggling to carry over-burdensome debt, your farm’s property value has declined, or you would like to sell your farm and pay off your debt, Chapter 12 may provide an excellent solution.  Please call and schedule an appointment with one of our attorneys to discuss your situation and please mention that you are considering Chapter 12.