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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 North Carolina, Chapter 12 of the Bankruptcy Code provides a mechanism for family farmers and family fishermen with a regular annual income to reorganize their debts. This specialized form of bankruptcy is designed to meet the unique needs of the agricultural and fishing industries by allowing these debtors to propose a repayment plan that is manageable based on their seasonal income patterns. The repayment plan typically spans three to five years, with the possibility of extending the period if the court finds a justifiable reason. During this time, debtors make structured payments to their creditors, which can include partial or full repayment of the debts. The goal of Chapter 12 is to enable family farmers and fishermen to keep operating their businesses while managing their debt obligations.

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Bankruptcy

Chapter 12 bankruptcy

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North-Carolina State Code

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Bankruptcy

Chapter 12 bankruptcy