It may seem as if Chapter 12 bankruptcy information might be outdated. In truth, the amount of family farmers and family fishermen in the United States altogether are not all that numerous, an idea that Chapter 12 bankruptcy statistics would tend to indicate. Nonetheless, filings under Chapter 12 still occur every year, and the American people and economy still need farming and fishing on which to subsist.
Chapter 12 is a fairly esoteric classification for bankruptcy law. According to this subset of Title 11 of the U.S. Code, applicants must be family farmers or family fishermen with “regular annual income.” Of course, the masculine language of the law is a bit of a misnomer; a “family fisherman” may very well be a woman who is carrying on the tradition of the generations that came before her to catch and sell fish for a living.
Semantics aside, what is clear about the bankruptcy information contained within the law is that it exists for the benefit of some important American institutions. The preservation of family is recognized as increasingly essential with each passing year, and consequently, the preservation of family businesses – in agrarian industries in need of rescue no less – warrants the continued existence of a separate category for family farms/fisheries.
Though Chapter 12 law specifies that farmers/fisherman must receive regular annual income, in practice there is some leniency with regard to eligibility given the nature of these jobs. By virtue of migrative fishing patterns and growing seasons for fauna, bankruptcy courts will usually give leeway to applicants in consideration of their circumstances. All the same, some bankruptcy information will not be as readily negotiable.
Chapter 12 of the Bankruptcy Code is rather explicit about the income-based qualifications for relief. Whether a family farming or fishing operation is completely family-run or simply family-owned, total debts must not exceed $3,544,525 for the former and $1,642,500 for the latter. Additionally, in either case, farming or fishing must be at least fifty percent of a business’s activities (at least 80% for fishermen in a family corporation).