Chapter 12 bankruptcy applies to family farmers and family fishermen. In this type of filing, the debtor and trustee will develop a repayment plan. The court will then assess the plan and decide on whether to accept it, make alterations to better it, or dictate a fresh plan all together.

Hames, Anderson, Whitlow & O’Leary, P.S. handles debtor and creditor bankruptcy cases in Richland, Pasco, Kennewick and surrounding areas. We are a debt relief agency that helps people file for bankruptcy relief under the Bankruptcy Code.

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Why Do People Prefer Filing Chapter 12 Bankruptcy?

Unlike Chapter 7 filings, Chapter 12 filings do not require the debtor to liquidate their assets. In the real sense, the debtor gets to keep all assets. In most Chapter 12 filings, the debtor is only required to repay a small percentage of what he or she owes.

Chapter 12 bankruptcy also tends to be less expensive, on average, and less onerous in terms of the procedural requirements. Still, it’s important to work with a seasoned attorney to protect your family’s interests (more below).

Do You Qualify For Chapter 12 Bankruptcy?

Only families within the farming or fishing industries can file for Chapter 12 bankruptcy. There is also a debt limit that determines whether you can make this filing. Also, family farmers can make this filing only if more than half of their debt accumulated due to farming operations. This filing can also apply to partnerships or companies in the farming and fishing business but under unique circumstances.

The specific parameters are subject to change at any time. Therefore, it’s always good idea to consult with a bankruptcy attorney in the Tri-Cities, Washington region. They can confirm the latest in state and federal law before you make any conclusions about whether Chapter 12 is a good fit for you.

Generally speaking, Chapter 12 protection is intended for people who:

  • Work for or co-own a family farm or fishing enterprise (defined below), and
  • Make at least half their gross income through farming or fishing, and
  • At least half their debt is related to the farming or fishing operations (not to exceed $4,031,575 as of 2017, though this amount usually increases over time)*

* You are entitled to exclude one home loan (if the home is occupied by its owner) for purposes of calculating the total debt.

What Is Considered a Family Farm or Fishing Operation for Purposes of Chapter 12?

If your family owns and operates its own farm, you’re exactly the type of filer Chapter 12 was designed to help. In today’s ever-complicated farming and fishing industries, however, it’s increasingly common for larger corporate entities to acquire an interest in your family’s farm. You might wonder, then, if you still qualify.

To be eligible as a family farming or fishing company under Chapter 12, your business must meet the following requirements:

  • At least 50% of the business or partnership is owned by a single family (extended family members usually count as part of the family)
  • Your extended family operates the farm
  • More than 80% of the business’ assets are related to the fishing or farming operations
  • Any stock in the business is not publicly traded

How to File Chapter 12 Bankruptcy in the Tri-Cities

There are various forms that need to be completed when filing Chapter 12. You will need to gather some supporting documents in order to accurately complete these forms and then submit them. When filing for Chapter 12, the debtor is required to give the bankruptcy court a full list of all its creditors and how much money he/she owes each one of them.

When filing for Chapter 12 bankruptcy, you will be required to declare your source of income together with all the properties that you own. You will also need to outline all your expenses that were incurred by your farming or fishing operations. All these declarations will be accompanied with the necessary supporting documents. You will then be required to meet with your creditors in order to work out a suitable repayment plan.

In Chapter 12 bankruptcy, the debts will not be discharged until all payments are made according to the repayment plan.

Hames, Anderson, Whitlow & O’Leary, P.S. has the knowledge and experience you need to get through this trying time as quickly and efficiently as possible with the best possible outcome for your case. We are Kennewick, Pasco, and Richland bankruptcy attorneys you can count on.

How Long Is a Typical Chapter 12 Repayment Plan?

As a debtor filing for protection under Chapter 12, you will generally have three to five years in which to repay your debts. An experienced Tri-Cities bankruptcy lawyer can help you arrive at a time table and monthly payment amount that works for you and your creditors.

Your repayment plan is subject to the approval of the designated court trustee, who will have up to 45 days to review your plan before deciding whether to approve.

Do You Need a Lawyer to File for Chapter 12 Bankruptcy in the Tri-Cities?

While the law does not require you to be represented by a Washington bankruptcy lawyer when filing for Chapter 12, it is nevertheless in your best interest to get experienced legal representation on your side.

Chapter 12 is a sophisticated, complex area of law. Because it is available exclusively to families within the farming and fishing industries, it’s harder to find up-to-date information you can rely on. For that matter, even many attorneys do not have experience working directly with Chapter 12 cases.

Bankruptcy law changes all the time, and it’s easy to make mistakes. Those errors can prove costly. A well-seasoned attorney can help you act prudently and strategically, meeting deadlines and complying with every aspect of the law in order to protect your and your family’s finances for the future.

Don’t lose any more money. Now is the time to act.

Call us at 509-586-7797

Hames, Anderson, Whitlow & O’Leary, P.S. serves creditor and debtor bankruptcy needs for the Tri-Cities (Richland, Pasco, Kennewick, West Richland) and surrounding areas including Hermiston, Benton City, Prosser, Grandview, Sunnyside, Finley, Burbank, Desert Aire, Mattawa, and Othello.

For more information regarding bankruptcy please visit our Bankruptcy FAQ’s.