Increases in Farm Debt Leads to More Chapter 12 Bankruptcy Filings

As we continue to move through recovery from the peak of coronavirus outbreaks, farmers are still facing the same financial troubles they have had since the establishment of the Family Farmer Relief Act of 2019. For family farmers and fishers, this act expanded the eligibility and debt limits for Chapter 12 bankruptcy cases, a chapter specifically designed to resolve debts of farmers or fishers who support their family with at least 50% of their yearly income derived from their farming/fishing businesses. If you are a family farmer or fisher struggling to meet debt payments, you’re not alone. Of the current two million farms operating on U.S. soil since 2019, thousands have debts they can’t repay. For those considering filing for Chapter 12 bankruptcy in St. Peter, MN, or the surrounding area, Behm Law Group Ltd. can provide the legal support and advice to help you build a strong case with an effective and manageable debt repayment plan.

Chapter 12 bankruptcy works to reorganize farming/fishing debts and personal debts together into a manageable repayment plan. This repayment plan lasts three to five years depending on the filer’s disposable income. The process overall works very similarly to Chapter 13 individual bankruptcy, but has some aspects that make it more suited to resolve farmer and fisher debts specifically.

Chapter 12 bankruptcy is typically better suited for the financial conditions of a family farmer or fisher because it moves much more quickly and is much less expensive than a Chapter 11 case. It’s also more effective than Chapter 13 bankruptcy given the much larger debt load that will be addressed.

The newest law regarding Chapter 12 bankruptcy was the 2019 Family Farmer Relief Act, which increased the allowed debt limits from $3,237,000 to $10 million, reflecting the increased land values and costs of farming equipment. Due to the current discrepancy between farm products and the operating costs of small to midsize farms and fishing operations, family farms and fishers are facing severe financial imbalances. With more and more seasonal loans taken out to cover these discrepancies and to keep their operations running, farmers and fishers need Chapter 12 reorganization bankruptcy now more than ever. Moving forward, the larger debt allowances for a Chapter 12 bankruptcy case will greatly improve the chances for financial rehabilitative success of family-owned farms. Projections over the next three to five years indicate that many more people will need to protect their family farms by filing for Chapter 12 bankruptcy relief.

To learn more about the Family Farmer Relief Act and filing for Chapter 12 bankruptcy in St. Peter, MN, and the surrounding region, contact Behm Law Group Ltd. at (507) 387-7200 or email at stephen@mankatobankruptcy.com.

Different Types of Bankruptcy in Redwood Falls, MN

Because the current time is full of uncertainties, any growing financial worries can add a tremendous amount of stress on a household. Whether you’re an individual, a family breadwinner, or a business owner, you can rest assured that when worst comes to worst, you will always have the option to file for bankruptcy if your financial circumstances call for it. Bankruptcy often gets a negative image cast over it, but the truth is that it’s a system designed to protect debtors, creditors, and the economic system overall with fair and just treatment to every party involved. If you are finding it impossible, or even just difficult, to meet debt payments each month, you can join thousands of other U.S. citizens who filed for bankruptcy and received permanent debt relief. With the help of Behm Law Group Ltd., you can build a strong case for Chapter 13 or Chapter 7 or Chapter 12 bankruptcy in Redwood Falls, MN, and start down your own road to a debt-free life.

At Behm Law Group, we work with individuals or joint-filing spouses going through Chapter 7 or Chapter 13 bankruptcies. We also work with Minnesota family farmers and fishers to help them file for Chapter 12 relief. The different chapters/types of bankruptcy outlined in the code include:

  • Chapter 7: This process is for individuals or businesses of any size. It works to liquidate non-exempt assets in exchange for the discharge of debts. With most individual cases, the exemptions provided by the bankruptcy code protect one’s property from liquidation and all one loses are one’s debts.
  • Chapter 13: This bankruptcy is primarily for individuals, but sole proprietorship businesses can file by combining personal and business debts into one case. This process works to reorganize debts into a manageable repayment plan lasting three to five years that is tailored to one’s monthly income and reasonable and necessary monthly living expenses.
  • Chapter 12: This works like Chapter 13, but it is exclusively designed for family farmers and fishers who derive 50% of their yearly income from their farming/fishing operations.
  • Chapter 11: This is another reorganization bankruptcy, but it’s typically available to very large businesses that aren’t sole proprietorships or partnerships and to individuals who have a lot of property and have more than $419,275 of unsecured debts and more than $1,257,850 of secured debts. Chapter 11 typically costs more, takes longer, and involves more debts than the other reorganization bankruptcies.
  • Chapter 9: This bankruptcy process is for cities, towns, and other municipalities. The process protects the filing municipality from its creditors while a debt reorganization plan is drafted.
  • Chapter 15: This chapter applies to bankruptcies that cause cross-border insolvencies and is used when a filer has debts in the United States and in another country.

This is a brief explanation of the general chapters in the U.S. bankruptcy code. To learn more about bankruptcy law or to file for bankruptcy relief in Redwood Falls, MN, today, call Behm Law Group Ltd. at (507) 387-7200 or email at stephen@mankatobankruptcy.com.

COVID-19 Federal Aid for Farms and Chapter 12 Bankruptcy News

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.

Chapter 12 Bankruptcy for Farmers Affected by COVID-19 Shutdowns

As we continue to move through the devastation of the novel coronavirus outbreak, more and more public gatherings and store fronts are closing down operations. While there are many business owners severely affected by this outbreak, farmers and fishers might be looking at even more long-term negative effects than any type of retail operations.

The COVID-19 outbreak has led to countless farmers’ markets, outdoor year-round markets, local groceries, and many other food sale outlets to be shut down. These closings are creating a serious deficit in family-owned farmer and fisher incomes. If you are struggling with these shutdowns as a family farmer or fisher, Behm Law Group Ltd. can help you find debt relief through Chapter 12 bankruptcy in Windom, MN.

Chapter 12 bankruptcy is a chapter of the bankruptcy code that is specifically designed for family-owned farming and fishing operations that are struggling to make debt payments from month to month. If at least 50% of your annual income is sourced from your farming/fishing operation, you can qualify for Chapter 12 bankruptcy relief.

As a reorganization type bankruptcy, Chapter 12 works to structure your debts into a manageable repayment plan that is suited to your income and through which the debts in your farming or fishing operations can be paid back under terms that are much more favorable to you than the loan terms you may have now. While maintaining fair treatment to your creditors, you can repay your debts under the supervision of a trustee with pre-determined monthly payments during a three- to five-year period.

With prices of farm goods already tipping many farmers and fishers to the point of dipping into their savings, the new blow that COVID-19 outbreaks have had on the global economy and the shutdown of many public markets puts local agriculturalists in a precarious position. Without a clear idea of how commerce will continue to move forward into the growing season, many farmers are unsure of how to plan for the coming months. If coronavirus shutdowns and bans against public gatherings continue in some areas, farmers and fishers may have to file for Chapter 12 bankruptcy relief or find other sources of income.

The additional uncertainty farmers have with the upcoming presidential election only adds more pressure to an already stressful situation. If you are a local farmer or fisher, and you find that your debts are piling up with no clear idea of how they will be resolved, you can turn to the relief provided in a Chapter 12 bankruptcy. Those filing for Chapter 12 are not alone, and many other farmers or fishers have found long-term debt relief through the process. Chapter 12 bankruptcy can provide the long-term relief that farmers and fishers need to constructively address overwhelming debt and stabilize their businesses.

If you are considering filing for Chapter 12 bankruptcy in Windom, MN, we can help. Contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com for more information.

Chapter 12 Bankruptcy for Farmers Affected by COVID-19 Shutdowns

As we continue to move through the devastation of the novel coronavirus outbreak, more and more public gatherings and store fronts are closing down operations. While there are many business owners severely affected by this outbreak, farmers and fishers might be looking at even more long-term negative effects than any type of retail operations.

 

The COVID-19 outbreak has led to countless farmers’ markets, outdoor year-round markets, local groceries, and many other food sale outlets to be shut down. These closings are creating a serious deficit in family-owned farmer and fisher incomes. If you are struggling with these shutdowns as a family farmer or fisher, Behm Law Group Ltd. can help you find debt relief through Chapter 12 bankruptcy in Windom, MN.

 

Chapter 12 bankruptcy is a chapter of the bankruptcy code that is specifically designed for family-owned farming and fishing operations that are struggling to make debt payments from month to month. If at least 50% of your annual income is sourced from your farming/fishing operation, you can qualify for Chapter 12 bankruptcy relief.

 

As a reorganization type bankruptcy, Chapter 12 works to structure your debts into a manageable repayment plan that is suited to your income and through which the debts in your farming or fishing operations can be paid back under terms that are much more favorable to you than the loan terms you may have now. While maintaining fair treatment to your creditors, you can repay your debts under the supervision of a trustee with pre-determined monthly payments during a three- to five-year period.

 

With prices of farm goods already tipping many farmers and fishers to the point of dipping into their savings, the new blow that COVID-19 outbreaks have had on the global economy and the shutdown of many public markets puts local agriculturalists in a precarious position. Without a clear idea of how commerce will continue to move forward into the growing season, many farmers are unsure of how to plan for the coming months. If coronavirus shutdowns and bans against public gatherings continue in some areas, farmers and fishers may have to file for Chapter 12 bankruptcy relief or find other sources of income.

 

The additional uncertainty farmers have with the upcoming presidential election only adds more pressure to an already stressful situation. If you are a local farmer or fisher, and you find that your debts are piling up with no clear idea of how they will be resolved, you can turn to the relief provided in a Chapter 12 bankruptcy. Those filing for Chapter 12 are not alone, and many other farmers or fishers have found long-term debt relief through the process. Chapter 12 bankruptcy can provide the long-term relief that farmers and fishers need to constructively address overwhelming debt and stabilize their businesses.

 

If you are considering filing for Chapter 12 bankruptcy in Windom, MN, we can help. Contact Behm Law Group Ltd. at (507) 387-7200 or stephen@mankatobankruptcy.com for more information.

 

Recent Histories of Chapter 12 Bankruptcy in Mankato, MN and How It Affects Farmers Today

Farming as a profession has experienced more drastic changes to economic standing in the U.S. during the past 50 years than almost any other types of industry. In the 1970s, farming in Minnesota and across the U.S. was reaching an all-time high, with the value of land meeting higher heights than ever before. Export of goods increased, and farmers were able to get more credit with goals to grow their operations.

 

Unfortunately, the farm crisis in the 1980s quickly led to a downfall of many Minnesota farms and a spike in agriculture bankruptcies. This farm depression is still affecting family farmers and fishers even 20 to 30 years later, and Minnesota’s agricultural industry is walking a difficult road, especially given the ongoing trade dispute with China. If you’re considering filing for bankruptcy as a family farmer or fisher, Behm Law Group, Ltd. can help you build a strong case for Chapter 12 bankruptcy in Mankato, MN.

 

Chapter 12 bankruptcy is a process designed specifically for family farmers and fishers (those who earn over 50% of their gross income from their agricultural operations) who are in debt but maintain a steady income. This bankruptcy process works as a reorganization of debts into a manageable repayment plan suited to your income and expenses lasting three to five years.

 

Though the process of bankruptcy for farms has changed slightly since the 1980s farm crisis, the concept is the same, and Chapter 12 bankruptcy has helped many individuals find debt relief when desperately needed. However, the effect of that crisis is still on the table for a wide majority of farmers. During the time of the crisis, land values dropped an average of 50% towards the end of the 80s, equipment costs rose almost 25%, and the U.S. dollar value weakened considerably.

 

In 1986, Chapter 12 was added to the bankruptcy code under the Family Farmer Bankruptcy Act. By 1999 over 9,550 farms across the U.S. filed for Chapter 12 bankruptcy. Despite this, by 1987, the government issued subsidies to Minnesota farms with a total of just over $712 million.

 

In addition to these changes, the price of milk, wheat, corn, and soy fell gradually over the next decade, adding to the difficulties family farming operations face even now. In 1978, Minnesota was home to about 98,600 family-owned farms. Today, those numbers barely meet 75,000, despite the growth in population and crop demands.

 

The residual effects of the 1980s farm crisis still impact Minnesota farmers today, and the debt relief and long-term security that Chapter 12 bankruptcy provides is a valuable option to many famers. The help of an expert attorney when filing can make all the difference. To get started on your case today, contact Behm Law Group, Ltd. at (507) 387-7200 and begin your petition for Chapter 12 bankruptcy in Mankato, MN.

Understanding a Potential Congressional Reform of Chapter 12 Bankruptcy in Luverne, MN

Across the Midwest, family-owned farms are still struggling to make ends meet after a difficult start to the growing season. Farmers and fishers in the region are facing large debts without an income to match the required monthly payments. Because of these financial difficulties, more and more families are filing for bankruptcy or seeking other forms of debt relief. If you’re a family farmer or fisher and have been unable to make payments on your debts, bankruptcy might be the right path to take. With the help of Behm Law Group Ltd., you can file a successful case for Chapter 12 bankruptcy in Luverne, MN, and find your way out of debt without sacrificing your family business.

In the 1980s, the U.S. government devised a bankruptcy chapter specifically suited to treat the debts of family farmers and fishers. This chapter was based on the bankruptcy laws set up for fishers and farmers in debt during the Great Depression. Today, Chapter 12 works to reorganize debts into a repayment plan tailored to debtors’ income and expenses. This process is similar to Chapter 13, but it’s specific to the debts and expenses of family farmers and fishers.

 

For many purposes, current Chapter 12 laws have worked well to protect family farms and fishing operations while ensuring fairness to their creditors. However, in the face of current farm debts, Congress has introduced a potential reformation of Chapter 12 bankruptcy.

 

Why the change?

Farm debts have been around since farms have existed, but farms themselves have changed even since the 1980s when Chapter 12 standards used today were established. The average size of family farms and fishing operations have increased dramatically in the past 40 years, and the debt amounts have increased accordingly. However, the amount of debt allowed to file for Chapter 12 bankruptcy instead of liquidation bankruptcy has not increased alongside farm sizes and debt amounts. To continue protecting farms from liquidation, some aspects of Chapter 12 need to change.

 

What might change?

Primarily, Congress is proposing increased debt limits for those looking to file for Chapter 12. Family farmers and fishers are currently allowed up to $4.153 million in debt to qualify for Chapter 12, but average debts today are more than double that. Increased costs for property, equipment, supplies, facilities, and fuel all lend themselves to higher debts for farms with lower income overall. To allow more farms to reform with the structure of a Chapter 12 repayment plan, the debt limits need to be raised.

 

With several members of Congress supporting plans for Chapter 12 reform, more family farmers and fishers may be given a chance to repay debts and stay in business for the long term. If you think filing for Chapter 12 bankruptcy in Luverne, MN, or the surrounding area might be the right choice for your farm, contact Behm Law Group Ltd. at (507) 387-7200 today.

Rising Debt in the Growing Season Increases Cases of Chapter 12 Bankruptcy in Mankato, MN

Ever since people have learned to grow plants and care for livestock, farming has proved to be one of the most difficult occupations in which to make money. Because farming is so dependent on natural conditions, it’s inevitable that it is often filled with hardship. In today’s global economy, and in the face of changing environmental factors, farming has become a harder way to make a living than ever before. If you are struggling to support your farm, you are not alone. With the help of Behm Law Group Ltd., you can decide whether filing for Chapter 12 bankruptcy in Mankato, MN, is the right choice for you, and work through the process with our guidance and support.

 

Chapter 12 bankruptcy is specifically designed to treat the financial conditions of a family farmer. Like Chapter 13 and Chapter 11, this process reorganizes your debts into a manageable repayment plan overseen by a bankruptcy trustee. This allows you to keep your company and property stabilized until your debts are repaid under adjusted or modified loan terms. If you have a difficult few years, Chapter 12 can be a critical option for keeping your family farm running.

 

The problem many farmers have struggled with in the last twenty years is a lack of demand. Farmers can grow more corn and soybeans than ever before thanks to GMOs and pesticide technology. While crop demand increased with production until recently, it has now started to drop in comparison with the supply ratio. Due to this, farmers are seeing decreasing income in response to the time, hard work, and cost of crop production.

 

Reflecting the difficult times farmers are currently facing across the country, Minnesota has seen a rapid increase in the number of Chapter 12 cases, especially during the spring growing season. Spring is the time of year when income from the previous season is most important to be able to get a new crop in the ground and established for the coming months. If you have struggled to make ends meet in the previous year and have seen a decrease in demand for your supply, you may be facing an even lower return in this new season.

 

This cycle starts to resemble a spiraling out of income and a loading on of debt for farmers. A demand for crops that cannot match the supply grown causes a lower income for farmers. This lower income prevents them from paying necessary costs-of-living and farming expenses, and results in more debt, more loans taken out, and in the long term, a higher risk of bankruptcy.

 

Despite this negative cycle we are currently seeing for Minnesota farmers, the possibilities that Chapter 12 bankruptcy offers are a silver lining that, not only allows farmers to keep their businesses running and resolve debt, but also provides a long-term solution for unbalanced supply and demand. To learn more about how filing for Chapter 12 bankruptcy in Mankato, MN, can help farmers with unmanageable debt, contact Behm Law Group Ltd. at (507) 387-7200 today.

 

Farms and Other Local Midwest Food Suppliers File for Chapter 12 Bankruptcy in Mankato, MN

Farming is a notoriously difficult profession even with the knowledge, tools, and power agriculturalists have access to today. Throughout the ages, farmers have faced challenges with the weather, soil conditions, seed fertility, plant diseases, pests, economy crashes, and many other variables. With all the hardships farmers face, it’s incredible there are so many strong people who still choose this vocation, and we have those hard workers to thank for the abundance of food in supermarkets and grocery stores across the country.

 

However, many farmers still face extreme financial hardship, and it’s no surprise that many find themselves deep in significant debt connected to their crop, livestock, or fishing operations. If you’re having difficulties as a family farmer or fisher, Behm Law Group, Ltd. can help you find your way out of severe debt by filing for Chapter 12 bankruptcy in Mankato, MN.

 

With the large spread of farmland dotting the countryside between Mankato and other cities in southern Minnesota, there are many local people living in our communities that took on farming as a profession. Unfortunately, this year has marked a rise of farm debts, not just in Minnesota, but across the Midwest as a whole.

 

Why Farm Debts Are on the Rise

 

Sometimes described as a “slow bleed” of independent farms in the face of low dairy, crop, fish, and meat prices, the debts of family farmers and fishers are not matched by the income they receive from product sales. When independent farms are higher in geographic concentration, as they often are, the trickle of each small farmer’s debts turns into a river of severe financial crisis. If this happens to a community, no matter how widespread, bankruptcy is a highly valuable solution. When farmers and fishers take advantage of the assistance filing for Chapter 12 bankruptcy provides, it serves as a true system of recovery and healing for agricultural communities.

 

Chapter 12 Bankruptcy

 

Chapter 12 bankruptcy is a debt relief option offered to family farmers and fishers who earn over 50% of their income from agricultural or fishing operations. If you file for Chapter 12, you are provided with a system of bankruptcy that reorganizes and restructures your debts in a manageable repayment plan suited to your income. This bankruptcy repayment plan is spread over a period of three to five years and allows for fluctuations in your income with the growing and harvest seasons. Not only does Chapter 12 give farmers and fishers a way to repay their debts without losing their land, home, agricultural equipment, and overall livelihood, it also provides protection against creditor harassment.

 

Farm debt may be on the rise due to several conditions in the food industry today, but there are solutions. Chapter 12 bankruptcy in Mankato, MN is one option that many can use to recover in the long-term from agricultural debt. To learn more about bankruptcy and debt relief, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Qualifying as a Family Farmer or Fisher to File for Chapter 12 Debt Repayment Bankruptcy in Owatonna, MN

Agricultural industries in the U.S. have changed dramatically over the last fifty years, developing to meet the needs of a growing population and global market while battling many other obstacles. Today’s agricultural industrial complex is equipped to provide abundant food year-round to virtually every community, but because of its structure, it has also made it difficult for family farmers and other family agricultural businesses to stay afloat. For family farmers or family fishermen struggling to make ends meet, Behm Law Group, Ltd. offers legal advice and assistance to file for Chapter 12 debt repayment bankruptcy in Owatonna, MN. We can help you understand why bankruptcy is a valuable option to recover from financial problems that affect your family and business alike.

 

The U.S. Bankruptcy Code offers Chapter 12 debt repayment bankruptcy as a system tailored to fit the unique requirements and livelihoods of American family farmers and family fishermen. This bankruptcy chapter works similarly to Chapter 13, taking the filer’s debts and income into consideration and, with fairness to the creditors involved, restructuring those debts into a manageable three to five-year repayment plan.

 

However, Chapter 12 differs from Chapter 13 in several ways that make it more suitable to filers who make their living through their own farming or fishing practices. These benefits range from greater debt allowances to cramming down secured debts, but in order to gain the advantages Chapter 12 debt repayment bankruptcy provides family farmers and family fishermen, you have to qualify to file.

 

What Makes a Chapter 12 Candidate?

 

To prevent abuse when filing for debt repayment bankruptcy, the bankruptcy code outlines strict conditions for filers to qualify as family farmers and family fishermen. These requirements include:

 

  1. You or you and your spouse together own and operate a commercial farming or fishing enterprise.
  2. The income you gain from your farm or fishing operation must be over 50% of your total gross income as a household. This is measured from the previous tax year or from the previous three tax years (the latter is only applicable for family farmers).
  3. The total of your debt directly connected to your operation (property, equipment, seed and supply contracts, vehicles, tax debts, etc.) can’t be higher than $4,153,150 for a farm or $1,924,550 for a commercial fishery or fishing business.
  4. If you are a family farmer, you must have 50% of all your debts as an individual or household directly connected to your farm.
  5. If you are a family fisherman, you must have 80% of all your debts as an individual or household directly connected to your fishing enterprise.

 

If you’re unsure whether you qualify for a Chapter 12 debt repayment bankruptcy, Behm Law Group, Ltd. can help you examine your finances to determine if the debts and income connected to your farming or fishing operations meet the requirements.

 

Don’t wait to recover from severe debt and restabilize your family’s farm or fishery. Contact us today at (507) 387-7200 to learn more about your options for Chapter 12 debt repayment bankruptcy in Owatonna, MN.