How Chapter 12 Bankruptcy Works
Running a farm or fishery in today’s market is no easy feat. With so many businesses struggling to scrape by, demand for Chapter 12 bankruptcy is surprisingly high. Chapter 12 bankruptcy offers many benefits specifically tailored to farms and fisheries that make seeking bankruptcy protection a financially viable option for those in the industry. While no business owner wants to see their business go bankrupt, the provisions of Chapter 12 can allow for a farm or fishery to emerge from its bankruptcy felling stronger than ever.
At Bradford Law Offices, PLLC, our Fayetteville Chapter 12 bankruptcy attorneys understand how devastating it is for a business owner to file for bankruptcy protection, but we are dedicated to helping these struggling farms or fisheries overcome their financial crisis so that they can continue operating their business. Contact our office at (919) 758-8879 today to learn more about how filing for Chapter 12 bankruptcy works.
Filing The Petition
After ensuring that the farm qualifies for Chapter 12 bankruptcy, it must then officially file the bankruptcy petition with bankruptcy courts. This petition must be accompanied by various financial statements including schedules of assets and liabilities, current income and expenditures, and contracts and unexpired leases. Court fees totaling $275 will then be administered at this time, but these fees can be paid in installments.
Responsibilities of The Trustee
Once all subsequent paperwork has been filed with the courts, an impartial trustee will be appointed for the case. This trustee will then evaluate the case and be responsible for collecting payments from the debtor and distributing it to all creditors. Before 60 days of the petition being filed, the trustee will hold a meeting of creditors where the debtor will then be deposed. This deposition is meant to settle all questions that creditors may have with the proposed repayment plan. In most cases, all issues with the repayment plan and petition are typically resolved during this meeting.
The Confirmation Hearing
After the petition is filed, a debtor will have 90 days to formally submit their proposed repayment plan to the bankruptcy court for approval. This plan must repay all debts within five years and include the capitation payment that the debtor will make to the trustee who will use it to pay all creditors. The courts will then hold a confirmation hearing where it will officially approve or decline the proposed repayment plan. If approved, the repayment plan will take effect and the trustee will begin collecting payments. If the plan is not approved, then the debtor will have the opportunity to file a modified plan in the future.
This is a simple breakdown of the Chapter 12 bankruptcy process; for more information contact a bankruptcy attorney today.
Contact a Chapter 12 Bankruptcy Attorney
Filing for bankruptcy is one the hardest decisions a business will ever have to make, but those that do undergo the process can recover from their financial problems. At Bradford Law Offices, PLLC, our attorneys strive to assist struggling businesses to manage their debts by giving them the legal advice necessary to make informed decisions. Contact our office at (919) 758-8879 to speak with a member of our legal team today.