If you are thinking about filing for bankruptcy, then hiring a good lawyer to first learn about anything you need to know regarding bankruptcy, its different chapters and these chapters’ specific advantages and disadvantages, will definitely be a very good start. Afterwards, you and your lawyer can proceed to evaluating your actual financial situation to see if you really need to file a bankruptcy case and, if yes, then which specific chapter will help you best.
Bankruptcy is a legal proceeding where debtors (individuals or business firms) declare their inability to further pay their overwhelming debts, and creditors are either ordered to forgive debtors their debts or are paid by debtors through the liquidation of (debtor’s) certain assets and properties or through a restructuring of the payment scheme to monthly payments extending from three to five years.
Forgivable debts include only those which are dischargeable, such as personal loans, medical bills, and credit card bills. There are also the non- dischargeable debts, which include mortgage, court fines, student loans, and child support among others.
There are different chapters in the US Bankruptcy Code, each designed to address an individual’s or a firm’s financial situation. One of these is Chapter 12 bankruptcy, which is specifically designed for family farmers or family fishermen, to enable them to recover from unmanageable debts.
Family farmers or family fishermen, according to the Bankruptcy Code, may refer to an individual, an individual and his/her spouse, a partnership or a corporation. To be eligible, however, the debtor should, first and foremost, have a regular annual income (though the law makes an allowance for those with seasonal income. This is just to make sure that the debtor will have enough, regular earnings to pay the debt.
Other conditions required by chapter 12, include:
- At least 50% of the farm or fishery is owned by the debtor
- With regard to the amount of death, 50% should be due to farming (for family farmers) and 80% should be due to the commercial fishing business (for family fishermen)
- Gross income that came from farming or fishing operation (for the previous tax year)must have been more than 50%
- The total debt owed does not exceed $4,031,575 for farmers and $1,868,200 for fishermen (these amounts are based on the website of the United States Courts: http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter12.aspx. Other sites differ in figures with the US Courts, as well as with each other)
Having a clear understanding of what bankruptcy really is about and how it can really help individuals and businesses regain stability in their financial future can be better understood through the website of Ryan Ruehle.