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Chapter 12

I don't have a beautiful picture of cows or waving fields of grain on this page. I know farmers. Farming is hard work. And the financial aspects of farming, agriculture, and fishing/aquaculture get tougher every year. 


Chapter 12 is designed for family farmers or fishermen with "regular annual income." This income may be seasonal, so long as it is stable and regular enough to allow you to make payments under a Chapter 12 plan. Debtors under Chapter 12 may be individuals (married or single), corporations, LLCs, or partnerships. To be eligible for Chapter 12, you must:


  • Be engaged in a farming or commercial fishing operation;

  • Have total debts of not more than $11,097,350 if they are farmers or $2,268,550 if they are fishermen (as of February 2023);

  • Owe 50% of their total debts on account of farming operations or 80% of their total debts on account of commercial fishing operations (in both cases excluding home mortgages); and

  • Derive over 50% of their gross income from farming or commercial fishing operations.


Similar restrictions apply to farms and fishing operations owned through family partnerships and corporations. Partnerships and corporations cannot file bankruptcy under Chapter 12 unless a single family owns more than 50% of their stock or equity interests. It lets family farmers and fishermen propose a plan to repay some or all of their debts over a maximum of five years.

Chapter 12 eliminates many of the barriers you would face under Chapter 11 or Chapter 13. Chapter 12 is more streamlined, less complicated, and less expensive than Chapter 11, while Chapter 13 is primarily designed for wage earners who have smaller debts than those typically facing family farmers.

The Automatic Stay Stops...

Foreclosures, Repossessions, Lawsuits, Garnishments...

Almost Everything!

The Automatic Stay that goes into effect once your Chapter 12 case is filed immediately stops most collection actions, including collection calls and letters, bills, foreclosures, lawsuits, garnishments, bank attachments, even IRS levies. There are things it doesn't stop, such as criminal cases and some child support actions. Under some circumstances the Automatic Stay may exist for only a short period of time.

If you're a corporation/LLC or partnership:

  1. More than one-half the outstanding stock or equity in the corporation or partnership be owned by one family or by one family and its relatives.

  2. The family or the family and its relatives must conduct the farming or commercial fishing operation.

  3. More than 80% of the value of the corporate or partnership assets must be related to the farming or fishing operation.

  4. The total indebtedness of the corporation/LLC or partnership must not exceed $11,097,350 (if a farming operation) or $2,268,550 (if a commercial fishing operation).

  5. At least 50% for a farming operation or 80% for a fishing operation of the corporation/LLC's or partnership's total debts which are fixed in amount (exclusive of debt for one home occupied by a shareholder) must be related to the farming or fishing operation.

  6. If the corporation issues stock, the stock cannot be publicly traded.

Chapter 12 cases are complex, and not common in Maryland or DC. Most bankruptcy attorneys don't handle them.

We do.

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