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 Dakota, Chapter 12 of the Bankruptcy Code is tailored to meet the specific needs of family farmers and family fishermen who are experiencing financial distress but have a steady annual income. This chapter allows these debtors to create and implement a repayment plan to settle their debts over a period of three to five years. The plan involves making structured payments to creditors. Typically, the repayment plan is designed to last for three years, but if there is a justifiable reason, the bankruptcy court may authorize an extension beyond this period. This provision is intended to provide a framework for family farmers and fishermen to reorganize their finances, while maintaining their farming or fishing operations.