Chapter 12 bankruptcy offers a path forward for family farmers and fishermen who are experiencing financial hardship. When a Chapter 12 bankruptcy petition is filed, the debtor can pay back their debts without the threat of creditors and collectors taking legal action against them. At Natural State Law, PLLC, our experienced bankruptcy attorneys are here to assist Arkansas farmers and fishermen as they explore their options for achieving debt relief.
In response to several financial difficulties experienced by farmers and fishermen across the country during the 1980s, Chapter 12 bankruptcy was implemented as a way to offer relief for professionals in these industries. Chapter 12 shares many similarities with Chapter 11 and Chapter 13 bankruptcies, but it is specifically designed to suit the unique needs of farmers and fishermen. Most importantly, Chapter 12 bankruptcy prohibits creditors from taking certain actions against the debtor during the three to five year repayment period.
To initiate the Chapter 12 bankruptcy process, the petitioner must collect all of their financial information and submit a petition, along with the necessary supporting documentation, to the court. Once the petition is submitted, an automatic stay is triggered that prevents creditors from coming after the petitioner. It’s important to note that this stay extends to co-debtors, but only as to consumer debt; any co-debtor liable on non-consumer debt with the debtor is not protected by the stay. The court will then appoint a trustee to come together with creditors and the debtor to determine a payment plan lasting between three to five years. After all of the plan payments have been made, the debt is discharged.
At Natural State Law, PLLC, we are committed to helping every client achieve a peaceful and successful resolution. If you are a family farmer or fisherman in need of debt relief, reach out to our experienced bankruptcy attorneys to discuss your options. We’ll carefully assess your situation and help you determine the most strategic path forward.