05 Oct Who is a Family Farmer for Chapter 12 Bankruptcy?
A chapter 12 debtor must be a family farmer or family fisherman. So, who is a family farmer?
Generally, an individual or a married couple may be eligible to be a chapter 12 debtor if a four-part test is satisfied:
1. engaged in a farming operation;
2. total debts do not exceed $3,237,000;
3. 50%, of the debts must related to the farming operation (not counting the debt on the home); and
4. 50% of the gross income must have come from the farming operation.
A family owned corporation or partnership may be eligible to file as family farmer if the family operates the farm, 80% of assets are farm related; the debts don’t exceed $3,237,000; 50% of the debts (excluding debt for one home occupied by a shareholder) are farming related; and corporation stock cannot be publicly traded.
If you are considering filing a chapter 12 bankruptcy case, you must know that chapter 12 rules are complicated. You should seek the advice of a experienced, chapter 12 bankruptcy attorney.
Because one out of 1900 bankruptcy cases filed in the year ending March 2007 were filed as chapter 12 cases, few bankruptcy attorneys have chapter 12 experience. The Clerk of the U.S. Bankruptcy Court for your district should be able to tell you who are the chapter 12 lawyers in your area.
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