Often, the addition of laws to the register in United States law are a direct response to some current event, usually a crisis of some sort. With respect to the bankruptcy codes – that is, individual segments of the entire U.S. Bankruptcy Code – quite a few of these are reflections of the context in which they were enacted.
Prior to the creation of Chapter 12 as a separate bankruptcy code, farmers would have had to fight for recognition under the amendments of the time. It was not until the passage of the Bankruptcy Judges, United States Trustees and Family Farmer Protection Act of 1986 that Chapter 12 earned its proverbial spot on the mantelpiece and joined the other bankruptcy codes. This round of changes to the Bankruptcy Code were related to a state of panic in the farming market in the 1980s. The reasons for the collapse were several, but among the major contributors were dives in the value of agrarian commodities, disposable income and land itself.
As was the perhaps unfortunate tradition behind bankruptcy codes surrounding farmers in United States economic history, this monumental addition to Federal bankruptcy law was signed into being with an expiration date, meaning it would have to be repeatedly renewed to continue to have an impact. Come 2005, though, the Bankruptcy Abuse Prevention and Consumer Protection Act was passed making Chapter 12 a permanent part of the Code.