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Chapter 12 Bankruptcy
A reorganization plan specifically for family farmers or family fishermen with debts within a certain range. Chapter 12 bankruptcy requires a debtor to propose a plan that provides for the repayment of their creditors within three-to-five years. This plan may entail the restructuring of current debts, the waiver of defaults, and the liquidation of farming or fishing equipment.
Both individuals and corporations are eligible for Chapter 12 bankruptcy, though they must demonstrate that their majority of their income derives from farming or fishing.
This type of bankruptcy was created in 1986 to make things easier for indebted farmers and fishermen â?? groups that are important to the nationâ??s economy. Prior to its implementation, such professionals were required to file either Chapter 11 bankruptcy, which is pricey and intended for large corporations, or Chapter 13 bankruptcy, which is intended for people with relatively small amounts owed.