Oshkosh – 920-235-6690

Milwaukee – 414-269-8500

Madison – 608-709-5992

Oshkosh – 920-235-6690

Milwaukee – 414-269-8500

Madison – 608-709-5992

Chapter 12 Farm Bankruptcy

Representing Wisconsin Farmers in Chapter 12 Bankruptcy Proceedings

Your interests as a Wisconsin farmer are the primary concerns of the bankruptcy attorneys at Swanson Sweet. The creditors and bankers you deal with may offer advice or suggestions during hard debt times. However, their words cannot replace the guidance and counsel of an attorney.

Your long-term prospects are what matter most. Our Wisconsin bankruptcy attorneys work diligently to obtain results that favor your future. Creditors, in contrast, deal in short-term solutions that largely benefit them over you. They may propose that you liquidate valuable farm assets or grant concessions in order to pay debts.

Ultimately, farmers should take no action relating to debt and Chapter 12 bankruptcy without the guidance of an experienced chapter 12 bankruptcy lawyer. The stakes are high, and farmers have more protection than they are often led to believe.

What to Expect in Agricultural Bankruptcy

Chapter 12 is designed for family farms and family fishermen in need of debt relief. It provides several options for operations of this nature to restructure their debts and finances. Ultimately, the goal is to allow these family businesses to continue operating and generating revenue.

Issues that Chapter 12 can help address and resolve include but are not limited to:

  • Resolving mortgage defaults and stopping foreclosure, and restructuring the terms of mortgages (adjusting interest rates, the amount to be paid, and the length of repayment).
  • Stopping repossession of equipment and animals, and resetting the terms of secured debt payment to more manageable terms (adjusting interest rates, the amount to be paid, and the length of repayment).
  • “Cramming down” the amount owed on secured debt to match the value of underlying collateral.
  • Writing down or writing off unsecured debts.
  • Writing down or writing off taxes incurred as a result of the sale of farm assets (this favorable tax treatment is unique to Chapter 12).
  • Stopping collection activity and establishing feasible payment plans to resolve debts.

In a successful Chapter 12 farm bankruptcy action, an operation will emerge from bankruptcy able to handle its debt and operate profitably.

The Chapter 12 Process

Before filing, petitioners are strongly advised to seek counsel from an experienced bankruptcy attorney.  Every farm has unique operations and issues, which will of course dictate the specifics of the case, but chapter 12 follows the same overarching process no matter the case.

  • A petition and schedules are filed, outlining the assets, debts, and various other financial disclosures relevant to the farm.
  • An Automatic Stay in Bankruptcy goes into effect immediately, preventing further debt collection activity, such as foreclosure and repossession, outside of the bankruptcy
  • The debtor has a meeting with the trustee, at which creditors may appear and ask questions, to discuss the petition and schedules and tentative plan of reorganization
  • The debtor submits a reorganization plan to the court within 90 days of the case filing
  • Creditors weigh in on the reorganization plan
  • The judge approves the plan, and the debtor makes payments

Although Chapter 12 may be beneficial to your situation, it is important to know whether your farm or fishing operation qualifies.

Eligibility Requirements for Chapter 12 Bankruptcy

For Chapter 12 purposes, family farmers and family fishermen are those who are either:

  1. An individual (or two spouses) engaged in a farming operation, with debts less than $11,097,350, with primarily farm-related debt, and primarily farm-related income; or
  2. A corporation (including an LLC) or a partnership, in which one family owns the majority of the stock or equity and conduct the farming operation, the stock (if issued) is not publicly traded, with debts less than $11,097,350, in which more than 80% of the value of the assets are related to the farming operation.

Consulting with an experienced bankruptcy lawyer is crucial for understanding the conditions and eligibility requirements of Chapter 12 bankruptcies, and determining options to deal with your financial difficulties

Contact Swanson Sweet to Determine Whether Chapter 12 Is an Option for You

Bankruptcy is not the end of the story but a fresh start. Swanson Sweet LLP is ready to sit down with you and review your case. Our team will determine whether Chapter 12 is a right fit and present you with your options for moving forward.

We fight hard for family farms and the traditions they continue to uphold. Call or contact us online for a consultation and get the counsel and guidance you deserve. With offices in Madison, Oshkosh, and Milwaukee, and remote meeting options available, we serve clients throughout the State of Wisconsin.

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