New Law Doubles Chapter 12 Family Farmer Debt Limit
Chapter 12 is meant for family farmers with regular income. It addressed the specific economic challenges they face, such as fluctuating land values and commodity prices, extreme weather, and the impact of trade policies and tariffs. It is a way for debtors to propose and confirm a plan to repay all or part of their debts over three to five years.
Individuals must be engaged in farming, and over half of their total debts and annual gross income must be farming related. For corporations or partnerships, over half the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives, the family or the family and its relatives must conduct the farming operation, and over 80% of the value of the corporate or partnership assets must be related to the farming operation. Under the new law, the family farmer's debts may not exceed $10 million.