September 20, 2006 10:13 PM
What Is Chapter 12 Bankruptcy?
Before you file for bankruptcy, you should decide which type (or chapter) is the right one for you. Here is a brief description of each of the different types of bankruptcies:
Chapter 12 - Family Farmer's Debt Adjustment
• The chapter 12 bankruptcy law was created to help family farmers who need to reorganize their debts, while keeping their land. This type of bankruptcy is meant to assist farmers who have potential to reorganize and to allow them relief from a heavy debt burden, and at the same time allow farmers to pay their creditors what is deemed reasonable.
• The rules of a chapter 12 bankruptcy are modeled closely after those of a chapter 13. A chapter 12 case may only be filed by certain family farmers and businesses. A trustee is appointed, but the farmer usually remains in possession of the farm while formulating a plan. A chapter 12 case normally proceeds more quickly than a chapter 11 and may be less expensive.
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