Filing Chapter 12 Bankruptcy in Wellington FL is an option for family farmers who may be able to manage their debt load by restructuring these obligations. The program is somewhat similar to that of Chapter 13 for individuals, but is intended for much larger debt balances that may be incurred by a business.
There are three basic requirements for an individual farmer in regard to Filing Chapter 13 Bankruptcy in Wellington FL. The maximum debt load allowed is approximately $4.2 million. Half of the person’s gross income half of the fixed debt must be related to the farming operation. A corporate farm has some additional requirements, but the total debt allowed is the same.
Chapter 12 vs. Chapter 11 and 13
Chapter 12, as arranged by an organization such as the Law Offices of Sean I. Koplow, is intended to help the farmer work around some of the limitations of Chapter 13 and the extra time necessary for filing Chapter 11. Chapter 11 bankruptcy is a business reorganization plan. Consumers may be familiar with Chapter 11 because of some big-name corporations, such as Sears and Shopko, that have used this type of protection.
With Chapter 12, the timeline is the same as with Chapter 13: three to five years for the repayment plan to be completed. If the farmer does not have enough income to comfortably make these payments, then a judge will not approve the application. All expenses must be considered since the usual bills must still be paid. Groceries and other necessities will obviously have to be purchased during this time too.
Discharge of Debt
Some of the debt may be discharged when all the payments have been made. In addition, if a significant hardship occurred during the program and it was considered not the direct fault of the individual, any further debt accumulated during that time may also be discharged. A serious illness or injury in the family is the most common example.
After the filing has been made with the court, an automatic stay is in place that prohibits collection activity from creditors. Anyone interested in this type of financial protection may visit our website to get started.