Chapter 12

I don't have a beautiful picture of cows or waving fields of grain here. 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 "family fishermen" with "regular annual income." 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 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.

The eligibility requirements for a Chapter 12 are somewhat complex. To be eligible, you can be either an individual or a corporation/LLC or partnership. If you're an individual, you must:

  1. Be engaged in a farming operation or a commercial fishing operation.

  2. Have total debts of the farming operation that are less than $4,153,150 or $1,924,550 for  a commercial fishing operation.

  3. If a family farmer, at least 50%, and if family fisherman at least 80%, of the total debts that are fixed in amount (exclusive of debt for the debtor's home) must be related to the farming or commercial fishing operation.

  4. More than 50% of the gross income of the individual or the husband and wife for the preceding tax year (or, for family farmers only, for each of the 2nd and 3rd prior tax years) must have come from the farming or commercial fishing operation.

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 $4,153,150 (if a farming operation) or $1,924,550 (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.