Chapter 12 Bankruptcy Seattle

Chapter 12 bankruptcy is reserved for family farmers and fisherman. This is a modified form of reorganization bankruptcy that is tailored to the specific financial circumstances of farmers and fishermen. The chapter 12 bankruptcy offers added features and benefits that are not available in either chapter 11 or chapter 13 reorganization.

Qualifying for Chapter 12

Individuals, married couples, corporations, partnerships, and LLCs are all eligible to file a chapter 12 bankruptcy.

Individuals and Married Couples

• Debt does not exceed $3,792,650 for a farmer or $1,757,475 for a fisherman. There are ways around the debt limits that depend on how the debt is structured.
• At least 50% of the farmers’ debt must be from a farming operation. At least 80% of the debt of the fisherman’s debt must be from a fishing operation. This is exclusive of the debt for the debtor’s home.
• At least 50% of their income must come from farming or fishing.
• Debt does not exceed $3,792,650 for a farmer or $1,757,475 for a fisherman. There are ways around the debt limits that depend on how the debt is structured.
• More than one half of the outstanding stock or equity must be owned by one family or one family and its relatives.
• The family or the family’s relatives must actually conduct the farming or fishing operations.
• At least 50% of the farmers’ debt must be from a farming operation. At least 80% of the debt of the fisherman’s debt must be from a fishing operation. This is exclusive of the debt for the debtor’s home.
• The farming operation cannot trade it stock on a public exchange.

Corporations, Partnerships, and LLCs

How A Chapter 12 Bankruptcy Works

A chapter 12 bankruptcy is very similar to a chapter 13.

• A chapter 12 trustee is appointed by the court to oversee the case.
• We will propose a chapter 12 reorganization plan.
• A chapter 12 reorganization plan must be realistic; however, it can be structured to cram down on secured debt and to reduce your unsecured debt payments.
• It provides a framework for dealing with unpaid federal, state, or local taxes.
• It allows you to reduce your total secured debt load.

A chapter 12 bankruptcy is very case specific. This is because it is often a hybrid of a individual bankruptcy and a business bankruptcy. Each case is different. If you are committed to saving your farm or your fishing operation, contact a Seattle bankruptcy lawyer for a chapter 12 bankruptcy consultation.