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 New Mexico, 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 individuals to create and implement a repayment plan to settle their debts over a period of three to five years. The standard time frame for the repayment plan is three years, but if there is a justifiable reason, a bankruptcy court in New Mexico may authorize an extension beyond this period. The goal of Chapter 12 is to enable family farmers and fishermen to continue their operations while managing and repaying their debts in a structured manner.