Chapter 12 is designed for either "family farmers" or "family fishermen" with a regular annual income. It allows family farmers and fishermen having financial problems to propose and follow a plan to repay all or part of their debts. This plan is very similar to Chapter 13, but has certain provisions that are designed for specific individuals. Chapter 12 only applies to Farmers and Fisherman whose debt is comprised of at least 80% occupational costs.

There are two categories under the Bankruptcy Code for "family farmers" and "family fishermen":
(1) an individual or individual and spouse
and
(2) a corporation or partnership.

The Farmers or fishermen falling into the first category must meet each of the following four criteria as of the date the petition is filed to qualify for chapter 12:

1. The individual or husband and wife must be engaged in a farming operation or a commercial fishing operation.
2. The total debts (secured and unsecured) of the operation must not exceed $3,544,525 (if a farming operation) or $1,642,500 (if a commercial fishing operation).
3. If a family farmer, at least 50%, and if family fisherman at least 80%, of the total debts that are fixed in amount (exclusive of debt for the debtor's home) must be related to the farming or commercial fishing operation.
4. More than 50% of the gross income of the individual or the husband and wife for the preceding tax year (or, for family farmers only, for each of the 2nd and 3rd prior tax years) must have come from the farming or commercial fishing operation.

In order for a corporation or partnership to fall within the second category of debtors eligible to file as family farmers or family fishermen, the corporation or partnership must meet each of the following criteria as of the date of the filing of the petition:

1. More than one-half the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives.
2. The family or the family and its relatives must conduct the farming or commercial fishing operation.
3. More than 80% of the value of the corporate or partnership assets must be related to the farming or fishing operation.
4. The total indebtedness of the corporation or partnership must not exceed $3,544,525 (if a farming operation) or $1,642,500 (if a commercial fishing operation).
5. At least 50% for a farming operation or 80% for a fishing operation of the corporation's or partnership's total debts which are fixed in amount (exclusive of debt for one home occupied by a shareholder) must be related to the farming or fishing operation.
6. If the corporation issues stock, the stock cannot be publicly traded.

Additional information about Bankruptcy

• The Process of Bankruptcy
• Bankruptcy Filing Fees in South Carolina
• Bankruptcy Discharge
• Chapter 7 - Under the Bankruptcy Code
• Chapter 13 - Individual Debt Adjustment
• Chapter 11 - Reorganization Under the Bankruptcy Code
• Chapter 12 - Family Farmer Bankruptcy or Family Fisherman Bankruptcy
• Chapter 9 - Municipality Bankruptcy
• Chapter 15 - Ancillary and Other Cross-Border Cases
• SCRA - Servicemembers' Civil Relief Act
• SIPA - Securities Investor Protection Act
• Glossary - Terms You Need to Know
• Approved Credit Counseling Agencies

The information presented in our pages on bankruptcy should not be cited or relied upon as legal authority and should not substitute for the advice of a competent bankruptcy attorney.