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Chapter 12 bankruptcy options for family farmers

On Behalf of | Feb 15, 2023 | Bankruptcy

Chapter 12 of the United States Bankruptcy Code, in its design, helps family farmers in Kentucky who are facing financial hardship. It allows them to restructure their debt in a way that helps them keep their farm or fishing operation while they get back on their feet. Chapter 12 is like Chapter 13, but it provides more generous terms for debtors with a higher income level from farming or fishing operations.

Eligibility for Chapter 12

Eligibility for Chapter 12 bankruptcy requires that a farmer must have a regular and significant income from farming or fishing operations, and most of their debts must come from those operations. The farmer must also have a plan for paying off their debt in a timely manner, and the court must approve that plan.


One advantage of Chapter 12 bankruptcy is that it allows farmers to keep their property and continue to operate their farming or fishing business. This contrasts with other types of bankruptcy where property and assets may be sold to pay off debt. In addition, Chapter 12 gives farmers more time to pay off their debt, with a maximum repayment period of three to five years.

Assistance with financial difficulties

Chapter 12 bankruptcy may help farmers struggling with financial difficulties, but it is not a cure-all solution. The process takes time and requires a significant commitment on the part of the farmer. However, for those willing to make an effort, Chapter 12 bankruptcy can provide a path to financial stability and a bright future for their farming business.
There are options available to you as a farmer in financial distress.