Survival has always been difficult for farmers. These days, continuing the lifestyle is especially tough.
There are more than a few reasons why farmers might need to declare bankruptcy. Here are a few, followed by tips on how to file when the time comes.
Reasons farmers need to file for bankruptcy
The possibility of crop failure makes it a challenge for farms to stay in business. Climate change harms the quantity and quality of everything they produce. To combat this, they use increasing amounts of artificial fertilizers. Unfortunately, this has diminishing returns, which drains profits.
The buying power of major supermarket chains is especially problematic. There is less competition in the marketplace now than ever. When chains dominate particular regions, farmers are in a precarious situation. They must bow to the demands of one corporate entity or risk losing everything.
Future tax changes are another concern. Agricultural economists believe farmers will be unable to absorb proposed tax liabilities. Once such laws are in effect, not much can reverse them.
How farmers can file for bankruptcy
Created in 1986, Chapter 12 is a form of bankruptcy specifically for farmers. Choosing this path requires filing a petition with the court. Completing the necessary paperwork is easiest with a farming bankruptcy specialist to help. Once the filing is complete, a trustee is in charge, and a court clerk notifies all active creditors.
Farmers have it tough, regardless of how much they do to assure their businesses thrive. Bankruptcy protects them when situations become too much to bear. Remember that declaring bankruptcy may be a reasonable way forward.