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Bankruptcy

Chapter 12 bankruptcy

Chapter 12 of the Bankruptcy Code is designed for "family farmers" or "family fishermen" with "regular annual income." It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts. Under chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years. Generally, the plan must provide for payments over three years unless the court approves a longer period "for cause."

In Illinois, Chapter 12 of the Bankruptcy Code is tailored to provide relief to family farmers and family fishermen who have a consistent annual income but are facing financial distress. This chapter allows these individuals to create and implement a repayment plan to settle their debts over a period of three to five years. The repayment plan is designed to be manageable based on the debtor's income and is subject to approval by the bankruptcy court. Typically, the plan should span over three years, but if there is a justifiable reason ('for cause'), the court may allow a longer period for the repayment. This provision aims to help family farmers and fishermen reorganize their finances without losing their livelihood.

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Bankruptcy

Chapter 12 bankruptcy

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Bankruptcy

Chapter 12 bankruptcy

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