For many reasons, farmers across the United States frequently struggle financially. Not only is it difficult, especially given our country’s current economic difficulties, to generate a profit from a family-owned farm, but also American farms often incur much debt from the purchase of equipment and the payment of property taxes. Fortunately, the government is aware of the difficulties that many farmers across the nation face, and it works to provide support systems in many ways. Most recently, the CARES Act stimulus support has helped many farmers weather the economic shutdown as a result of COVID-19. When the stimulus support ends, however, family farmers and fishers will still have options for resolving their debts and stabilizing their finances. One debt relief option for farmers and fishers is filing for Chapter 12 reorganization bankruptcy. With the help of Behm Law Group Ltd., you can file a successful case for Chapter 12 reorganization bankruptcy in Pipestone, MN.
Chapter 12 bankruptcy is a reorganization type of bankruptcy designed specifically for farmers and fishers who derive at least 50% of their gross income from farming or commercial fishing operations. The Chapter 12 process works to restructure 100% of secured and priority debts and 0%-100% of unsecured debts into a manageable repayment plan. Chapter 12 has some special rules for the circumstances of farmers and fishers, differentiating it from Chapter 13, the other primary form of reorganization bankruptcy relief for individuals.
Right now, the number of Chapter 12 bankruptcy cases that will be filed during the next year is difficult to predict, largely due to the added support of the CARES stimulus act. With the stimulus support, Chapter 12 bankruptcy cases decreased from 509 in the first half of 2019 to 284 in the first half of 2020. Additionally, many bankruptcy courts were closed and online filing was the only option up until as late as June. This closure and limitation to virtual-only filings contributed significantly to reduced Chapter 12 cases.
As the country moves forward with much less support from the stimulus act and with bankruptcy courts re-opening, most people expect to see a dramatic increase in the filing of Chapter 12 reorganization bankruptcy cases. Farms will struggle with the continuing COVID-19 restrictions and lowered sales without the unemployment and stimulus support. Potential acts that may be put into place for more COVID-19 stimulus relief are not guaranteed, but farmers and fishers will have the option to file Chapter 12 bankruptcy.
Because the majority of U.S. Chapter 12 bankruptcy cases are in the Midwest, Minnesota farmers are among the most at risk for financial difficulties. Taking positive action for debt relief by filing for Chapter 12 bankruptcy might be the best option farmers and fishers have for protecting their homes and businesses in the long run.
To learn more about the rates of Chapter 12 bankruptcy in Pipestone, MN, and the surrounding area, or to start your own Chapter 12 case, contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com.
