This chapter is really close to Chapter 13, except that it’s centered around farmers and fishermen offering them benefits in case of filing bankruptcy.
As the history says there was no special law for the farmers till 1898, when the specific version of bankruptcy law for farmers was stated. At these times farmers were immune to the forced bankruptcy petition. Moreover in 1933 appeared more detailed version of the law. The specific features were that though farmers couldn’t be forced to file bankruptcy they still had to cooperate willingly with creditors in order to pay off the debt according to the offered plan.
The section 75 with all its measures concerning the priorities of the farmers was temporary and was to be declined in March 1938.
Till March 1949 the protection of the farmers working under the bankruptcy protection became even stronger, so that they could successfully run their business and make monthly payments.
The next changes were applied till 1986 and were really similar to the previous set of laws.
The Chapter 12 as we know it was added to the bankruptcy code in 1986, this was the response to the difficult situation the farmers appeared in as well as to the great need in their production.
All the rules were fixed in the laws in 2005 and didn’t change after that.
What is the Chapter 12?
The main feature of this Chapter is that it offers the advantages not given by the chapters 13 or 11. For example, according to the Chapter 11 you can get the high ceiling for your debt and more advantages while dealing with exemptions.
If you want to use the Chapter 11, 50% of your income and more shall come from the farming or fishing business. This doesn’t mean you have to grow some plants on your property. All you need to do is to have something common with farming. Growing horses on your lands will also do.
Here are the special ways you can reorganize your debts with:
- You do not have to undergo the means test in order to do Сhapter 12;
- You have wider ranges for organizing your debt;
- You can modify the amount you’re paying for the first mortgage of your home according to Сhapter 12.