What does a Chapter 12 trustee do?

What does a Chapter 12 trustee do?

Most Chapter 12 debtors continue farming or fishing operations after they file bankruptcy. A bankruptcy trustee is appointed, but generally, his or her duties are limited to reviewing documents, monitoring the debtor’s operations, advising the court, and collecting and disbursing plan payments.

What is the difference between Chapter 11 and Chapter 12?

However, Chapter 11 is the only reorganization chapter available to them, since Chapter 13 is only available to individual debtors and Chapter 12 is only available to family farmers and fisherman, and both of these chapters have debt restrictions that would eliminate many businesses from eligibility.

Who uses Chapter 12?

Only farmers and fishermen can use Chapter 12 to manage their debt. Under the Bankruptcy Code, “family farmers” and “family fishermen” fall into two categories: A person or a married couple. A corporation or legal business partnership.

What to know about Chapter 12 family farmer bankruptcy?

Today’s article provides a high-level overview of the Chapter 12 family farmer bankruptcy provisions. Farmers seriously considering Chapter 12 bankruptcy should work with their creditors and an attorney to establish and confirm a Chapter 12 plan. What is Chapter 12 Bankruptcy?

What are the advantages of Chapter 12 bankruptcy?

Modeled after Chapter 13 bankruptcy, Chapter 12 provides reorganizational advantages and financial relief specifically for family farmers in debt. Those advantages include a seasonal repayment schedule over a three- to five-year period and lower costs relative to other chapters.

How much debt does a family farmer have?

Total debts of the farm operation must not exceed $4,153,150 for a farming operation. For family fisherman, the total debt must not exceed $1,924,550 in inflation-adjusted dollars. At least 50 percent of the total debts that are fixed in amount, exclusive of debt for the debtor’s home, must be related to the farming operation.

Why was Chapter 12 bankruptcy created in 1986?

Chapter 12 bankruptcy was created in 1986 in response to the poor economic conditions that plagued agriculture, including low commodity prices, low farm income, record farm debt and tight agricultural credit markets.

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