What is the bankruptcy of Chapter 12?
When a person or an enterprise arises from debts that are beyond the possibility of repayment, it is common to seek protection against bankruptcy to prevent the asset to prevent the creditor. The decline often comes as a result of heavy economic times, whether in general or personal. The law of the United States is provided by various types of bankruptcy protection. Chapter 12 of bankruptcies is designed specifically to meet the needs of family farmers and fishermen and is therefore less known than other types of bankruptcy protection. First, the debts of the farmer must not exceed $ 1.5 million in the US (USD) and at least 80% of this debt must be related to agriculture. The debt owed on the home is not counted in this sum, unless directly connected to the agricultural operation. The law also requires that the farmer who submits bankruptcy in Chapter 12 must earn at least half of his gross income from agriculture in the previous submission. In addition, the farmer must earn sufficient income in order to make payments as planned for chapter 12 before the petition of bankruptcy is provideda.
Chapter 12 Bankruptcy was created in 1986 to remove some obstacles that they usually face to farmers and fishermen. Reorganize according to Chapter 11 or Chapter 13 of the Bankrot Code was often very complicated or expensive, or simply provided too little advantage. When the US Congress was adopted by chapter 12 of the Bankrot Code, this was considered a temporary measure that may not need to be indefinitely needed. When the law was banned, it banned bankruptcy after 30 September 1993.
Chapter 12 Bankruptcy is firmly modeled after Chapter 13, but with a higher debt CEILING than Chapter 13 provides. As a result, it was much more advantageous for farmers and fishermen who had to spend higher debts in normal business than current gainful workers. Pursuant to Chapter 12, debtors propose a plan to repay the debt to repay all or part of their debts over a period of three to five years. The period of three years is usually, ifD debtors can repay their debts, but mitigating circumstances can convince the court to approve up to five years.