Filing Chapter 12 Bankruptcy in Florida

What Does Filing for Chapter 12 Bankruptcy Mean?

Chapter 12 is a section of the bankruptcy code designed to better meet the specific needs of family farmers and fishermen in comparison to Chapter 13 or Chapter 11 bankruptcy.  In essence, this option combines features from each of these two sections of the bankruptcy code.  

How Do You Know if You Qualify for Chapter 12 Bankruptcy?

In Chapter 12 bankruptcy, debtors may exceed the debt limits of Chapter 13 filing, but the process is less costly and less complicated than Chapter 11.  Bankruptcy relief under Chapter 12 is available to individuals, individuals, and spouses, partnerships or corporations that are engaged in farming or commercial fishing operations. Owners of nurseries that grow their own plants are also eligible to file Chapter 12 bankruptcy.  One primary stipulation in filing Chapter 12 bankruptcy, however, is that family farmers and fishermen must have regular annual income from the farming or fishing business.

Advantages of Filing Chapter 12 Bankruptcy

Chapter 12 bankruptcy provides family farmers and fisherman with an option for restructuring their debt over a period of three to five years, while maintaining ownership of their farm or fishing operation. It provides for higher debt limits than Chapter 13 bankruptcy, but is less complicated and less costly than filing Chapter 11 bankruptcy.

Process Once You File Chapter 12 Bankruptcy

If you are a family farmer or fisherman filing Chapter 12 bankruptcy, you are required to repay a portion of your debt according to an approved monthly payment plan that spans three to five years. During that time, you can retain your farm or fishing venture and continue its operation.  A trustee is appointed to oversee all debt repayment and to distribute your monthly debt repayments to creditors as appropriate.  At no time during the process will you have to deal directly with any creditors and collection activities against you cease.

How Your Repayment Plan is Determined When Filing Chapter 12 Bankruptcy

  • The first thing you need to do is to file a petition with the bankruptcy court, along with financial schedules and a proposed debt repayment plan.
  • A bankruptcy trustee will be appointed to your case and will be responsible for reviewing your debts, income and other financial criteria.
  • You will be required to attend a meeting of creditors with the trustee and any creditors that wish to attend, and during this meeting, we will be with you by your side.
  • Following the meeting and review of your financial information, the court will either confirm or reset the proposed debt repayment plan that you will be required to follow.

Once approved, you will then make monthly payments directly to the trustee who will disburse the payments to your creditors under the terms set forth in your debt repayment plan. During this process, creditors can no longer contact you directly and all collection activities against you must cease. After you have completed all payments according to the monthly debt repayment plan, you are discharged of any remaining debts to your creditors. In essence, you are provided with a “clean slate” or “fresh start”.

How Does Chapter 12 Bankruptcy Affect Your Credit Report?

Filing Chapter 12 can be on your credit report for up to 10 years. As you are beginning and continuing to pay off debt, your credit score will improve.

How Klein Law Group Can Help

If you are seeking legal guidance for Chapter 12 bankruptcy, our attorneys can assist individuals and businesses that are struggling with debt. We understand that this is a difficult time, we can provide the help and support that you need in order to get the best outcome. To receive a free consultation from one of our knowledgeable and experienced bankruptcy attorneys, call (561) 353-2800.