Like many in Pennsylvania struggling with current economic circumstances, farmers may find themselves having difficulty paying their bills. When it is a struggle to make ends meet and keep the farm going, it may seem like there is no way out. In reality, Chapter 12 bankruptcy provides a way keep the farm, deal with certain types of debt and lay the groundwork for a secure financial future.
Chapter 12 is a bankruptcy option specifically designed for farmers. It is unique in that it provides a flexible way to reorganize debts in a way that makes sense for the applicant. Through this process, farmers can keep their farms, many of which were passed down through generations, and keep their livelihood. In order to qualify, the applicant must get at least 50% of his or her monthly income from farming operations.
Reorganization of debts allows a farmer to make payments that are affordable and reasonable. While under the protection of bankruptcy, all contact from creditors and debt collectors will halt per the automatic stay. This can provide a sense of relief as the farmer follows the terms of the court-approved bankruptcy plan.
If a Pennsylvania farmer is facing devastating financial circumstances, it does not mean he or she will have to give up the farm. There are many reasons why Chapter 12 could be the right choice for a situation, and an assessment of the case can help a potential applicant understand why. It is crucial to have the guidance and support of an attorney with extensive experience in bankruptcy law.