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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 Indiana, as in other states, Chapter 12 of the Bankruptcy Code provides a process for family farmers and family fishermen with a regular annual income to restructure their finances and avoid liquidation or foreclosure. It's a specialized form of bankruptcy designed to meet the unique needs of the farming and fishing industries, allowing debtors to propose a repayment plan to their creditors. The repayment plan typically spans three to five years, depending on the circumstances, and must be approved by the court. The debtor's plan will detail how they intend to repay their debts during this period. If a debtor requires more than three years to complete their payments, they must demonstrate 'cause' to the court, which may then extend the plan period. This provision recognizes the seasonal nature of agricultural and fishing income, providing flexibility to accommodate the variability in annual earnings these professions often experience.

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Bankruptcy

Chapter 12 bankruptcy

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Bankruptcy

Chapter 12 bankruptcy