Understanding Chapter 12 bankruptcy

By Leisa Boley Hellwarth

In the 1980s, Congress created a specialized chapter of bankruptcy, Chapter 12, to help struggling farmers reorganize their businesses and debts. 

Early in my career, I had the opportunity to participate in a national Chapter 12 bankruptcy conference held annually in Lubbock, Texas.  Attorneys, judges, and trustees from across the country attended.  I got advice and insight from some of the best legal minds I’ve ever met.  I’ll never forget the words of an Oklahoma bankruptcy judge who told me that so long as the debtor was honest and working hard, this judge would bend over backward to help the debtor succeed in his bankruptcy plan.

What is different about a Chapter 12 bankruptcy?  It provides a bankruptcy option for farmers and fishermen that eliminates many of the hurdles found in Chapter 11 (corporate reorganization) and Chapter 13 (individual wage earner).  Chapter 12 is less expensive and not as cumbersome as Chapter 11. … Continue reading