What is the purpose of Chapter 12 Bankruptcy?

The purpose of Chapter 12 Bankruptcy is specifically designed to address the financial difficulties faced by family farmers and fishermen. This type of bankruptcy allows these individuals to propose a repayment plan to retain their operations while managing their debts. The unique structure of Chapter 12 acknowledges the seasonal nature of agricultural and fishing incomes, giving them the flexibility to reorganize their financial obligations sustainably.

By enabling family farmers and fishermen to maintain their business operations during the repayment period, Chapter 12 serves to stabilize their income and allows them to continue contributing to the economy while meeting their financial commitments. This option is tailored to the unique circumstances of the agricultural and fishing industries, recognizing their distinct cash flow patterns and challenges compared to other types of bankruptcies.