5320 West 159th St, Suite 501, Oak Forest, IL 60452
Experienced Chapter 12 Bankruptcy Lawyers
Chapter 12 is designed for “family farmers” or “family fishermen” with “regular annual income.” This section was added to the Bankruptcy Code in the 1980′s to protect the family farmers facing numerous farm foreclosures in the 1980′s. It enables financially distressed family farmers and fishermen to propose a plan to repay all or part of their debts. Under chapter 12, debtors propose a repayment plan to make installments to creditors over a period of from three to five years.
The code provides certain limits and requirements which must be discussed with your attorney to determine eligibility under this section of the code. A debtor may be an individual or a husband and wife as well as a corporation or partnership. The total debts of the operation must not exceed $11,097,350, of which 50% must be related to farming operations for family farmers.
In addition to individuals and couples the Code allows for Partnerships and Corporations to file under Chapter 12 if a single family owns for than 50% of the equity or stock.
The Chapter 12 provides a benefit over Chapter 11 in that it allows a streamlined confirmation process. Under the code, unless the court grants an extension, the debtor must file a plan of repayment with the petition or within 90 days after filing the petition. The plan will provide for regular fixed payments to the standing chapter 12 trustee on a regular basis. The payments are distributed to creditors under the terms of the confirmed plan.
The debtor will receive a discharge after completing all payments. The discharge has the effect of releasing the debtor from future liability on all debts that were provided for under the plan allowed.
Urban & Burt, Ltd. has the distinction of being one of the first and only firms in the 1980′s to obtain a confirmation and successful completion of a plan under Chapter 12, in the Northern District of Illinois when we re-organized a family run veal farm located in Will County. Urban & Burt, Ltd. has successfully had Chapter 12 cases confirmed in both the US Bankruptcy Court for the Northern District of Illinois and the Central District of Illinois in Peoria County.
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