The Bankruptcy Code has a lot of chapters that deal with people who are filing for bankruptcy. People filing for this financial move has different cases. Specific rules let them have an advantage and make bankruptcy work for them effectively. As a chapter, many people ask what is Chapter 12 and who are eligible for this rule.
Introduction to Chapter 12
Chapter 12 was conceptualized with family fishermen and farmers in mind. Family fishermen and farmers who would like to take advantage of this chapter needs to have regular yearly income and have the opportunity to plan repayment options. Through this chapter, family fishermen and farmers can repay their debts within a span of not exceeding five years. Other technicalities may be discussed with this chapter and dealing with debts, but it’s aimed for these fishermen and farmers to keep their business operational.
Defining Family Farmers and Fishermen
People inquiring about what is Chapter 12 also needs to know the definition of family farmers and fishermen eligible for this chapter. The definition includes two categories. One is an individual or couple and a partnership or corporation in this business. Since they are different, it’s important that people falling into these categories would know whether they can get relief or not.
Individuals or couples who are family fishermen and farmers should be maintaining business like commercial fishing and farming operations. Their debts, both secured and unsecured should not go over a set amount, which is different for farming and commercial fishing operations. Fixed amount debts and other details must also be taken into consideration before they can file bankruptcy under this chapter.
For corporations and partnerships, the business should be maintained by family and relatives for the same commercial fishing and farming operations category. The debt limit is the same as for individuals an couples, but they need to have an outstanding stock owned by a family and relatives. In essence, some aspects are similar with individual family fisherman and farmers, but corporations include stocks that may have an effect on their filing process.
The bankruptcy filing process starts by filing a petition. This petition will be handled by the bankruptcy court. Other documents like assets and financial documents with the court. The debtor also needs to show a list of creditors, income details, properties and monthly expenses used for the business. Once the petition is filed, the debtor must file a repayment plan within 90 days. The trustee will then manage the funds to pay the creditors as indicated on the plan. Hence, the creditors won’t receive full payment from the debt. Once all the repayment is done, the debtor will be discharged of debts under this chapter unless there are other technicalities kept them from the process.
Getting Expert Assistance
Although a trustee may be appointed, an individual or company owner may benefit from asking assistance from an expert. This will give them an idea whether they fit in this category or not. The expert will also take note of the finances and get a clearer picture of how the repayment process will be completed.
Overall, there are numerous technicalities used in answering questions about Chapter 12 bankruptcy. Consult a professional to know whether you are eligible for this chapter or not.