Owning a farm in New York makes you an important part of the state’s economy. Yet many in the agriculture industry have encountered financial issues recently due to falling product prices and higher interest rates.
If you own a farm in Buffalo, New York, and are struggling financially, you have options. You should not feel trapped or forced into selling your farm. Another option could be the right way to get back on your feet: filing for bankruptcy.
What is chapter 12 bankruptcy?
A chapter 12 bankruptcy is a type of bankruptcy specifically reserved for farmers, ranchers and fishermen. It is a tailored process that helps farmers create and maintain a plan to pay off their debts. If you file for chapter 12 bankruptcy, the people you owe money to may agree to a repayment plan over the next three to five years.
This type of bankruptcy is similar to chapter 13, except that it is tailored for farming families. It eliminates many barriers debtors may encounter under other types of bankruptcies. It is better suited for large-scale reorganizations and major debts. Any family farmer or fisherman may file for this type of bankruptcy as long as he or she has regular annual (or seasonal) income.
When should you file a petition for chapter 12 bankruptcy?
If you have recently encountered serious money problems and can no longer handle financial matters at your farm, it may be in your best interests to consider chapter 12 bankruptcy. You can be eligible for this solution if your farm’s debts do not exceed $4,153,150 and if at least half of those debts relate to your farming operation.
If you are struggling with a great deal of debt but do not wish to sell your farm, filing for chapter 12 could be your way out. You can repay your debts without as much time or money as other types of bankruptcies. Help from a legal professional may enable you to effectively reorganize your debts.