:
Under Chapter 12 bankruptcy, a farmer's land and
equipment is exempt from liquidation, allowing family farmers
to reorganize their debts, assess their operation, and keep farming!
Chapter 12 bankruptcy, as established by Congress in 1986 and
renewed by Congress in 1993, 1998 and 2003, is a critical tool
in the financial stability of farms. It is critical for the survival
of farms in this time of agricultural transitions and natural
disasters.
Under other bankruptcy chapters, however, this is
not an option. When farmers' lose their land and equipment, continuing
the American tradition of operating a family farm becomes overwhelmingly
difficult. In fact, most farmers who file other bankruptcy Chapters
(13, 11, or 7) are forced to lose their farms and their livelihood
because the tools they use every day (the land and their equipment)
is part of the liquidation process.
Chapter 12 bankruptcy protection lapsed on January
1, 2004 and Congress failed to renew it. This legislation extends
Chapter 12 until June 30, 2005 and will be retroactive to January
1, 2004. The retroactive provision would allow some farmers who
filed under a different type of bankruptcy (Chapters 13, 11, or
7) to convert to a Chapter 12 filing if their bankruptcy is not
yet final.
For more information on Chapter 12 and other
bankruptcy options, please contact the Coalition at 1-800-639-3276.
If you would like to participate in NFFC's Credit and Rural Economic
Development Task Force, please send an email to nffc@nffc.net
with "Credit Task Force" in the subject line.
RAFI-USA
report on Chapter 12
Farmers Legal Action Group Article on Chapter 12
