Several factors beyond your control can affect the profitability of your farming business. Above-average snowfalls and droughts can impact the operation of your business, and in turn, your revenue stream. This trickle-down effect can cause debts too pile.

What do you do if that debt becomes overwhelming?

Many are familiar with Chapter 7, Chapter 11 and Chapter 13 bankruptcy. A lesser-known chapter of the code is Chapter 12 combines the best aspects of Chapters 11 and 13 to provide financial relief for family farmers. Like Chapter 13, this chapter allows you to reorganize your debt for repayments over a period of five years or less. It’s also an effective way to stop harassing calls from creditors.

Who qualifies?

Both individuals and married couples with a farm that meet the most basic requirement of the chapter. Debts must not exceed $4.1 million for farmers. Of those debts, half of your family’s debts need to be business related. Individuals and couples must have at least 50 percent of your income come from your farming business.

The chapter requires that the individual or couple has a steady annual income to ensure that the repayment of the debt. You may still qualify even if your income is seasonal.

Is it complicated?

Filing for Chapter 12 bankruptcy is simpler than you think.

If you’re seeking a Chapter 12 bankruptcy, you must gather a list of debts owed to creditors, sources and frequency of personal income, a list of property and a list of business expenses. The court appoints a trustee as an intermediary to collect and disburse payments. A meeting between the debtor, trustee and creditor happens between 21-35 days after filing to resolve issues with the plan.

The final plan includes the length of the plan, amount of payments and the frequency of those payments. That debtor files the plan to the court and the court will hold a confirmation within 45 days of filing.

Get a fresh start

You may be a first-generation farmer or continuing the family business. Regardless of how long you’ve been in business, you may find that filing Chapter 12 bankruptcy as a great way to get back on track. You can stop the harassing phone calls from creditors, repay your debts, and continue pursuing your dreams.