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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 Utah, as in other states, Chapter 12 of the Bankruptcy Code provides a mechanism for family farmers and family fishermen with a regular annual income to restructure their finances and avoid liquidation or foreclosure. This specialized form of bankruptcy allows these debtors to propose a repayment plan to their creditors, which typically spans three to five years. The plan involves making installment payments to creditors, which can help the debtors maintain their operations while managing their debt. The default time frame for the repayment plan is three years, but if the debtor can demonstrate a valid reason ('for cause'), the court may allow a longer period, up to five years. This provision is designed to balance the need for timely repayment with the unique challenges and seasonal income patterns of farming and fishing operations.

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Bankruptcy

Chapter 12 bankruptcy

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Utah State Code

Utah State Code

Bankruptcy

Chapter 12 bankruptcy

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