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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 Virginia, Chapter 12 of the Bankruptcy Code is tailored to meet the specific needs of family farmers and family fishermen who have a steady annual income but are facing financial distress. 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 plan typically requires debtors to make installment payments to their creditors over three years, but the court can extend this period to five years if there is a justifiable reason. The goal of Chapter 12 is to enable family farmers and fishermen to continue their operations while managing and repaying their debts. It is a specialized form of bankruptcy that considers the seasonal nature of agricultural and fishing income, providing a framework for debt restructuring that is more suited to the unique circumstances of these debtors compared to other chapters of the Bankruptcy Code.

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Bankruptcy

Chapter 12 bankruptcy

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Bankruptcy

Chapter 12 bankruptcy

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