November 26, 2020

Information for Tennessee Farmers: Chapter 12 Bankruptcy Might Be An Option

What is Chapter 12 Bankruptcy?

On this Tennessee Bankruptcy Blog, we regularly go over the most common types of personal bankruptcies, Chapter 7 and Chapter 13. However, there are less-known types of bankruptcy protections as well, such as Chapter 9, Chapter 11, and Chapter 12 bankruptcy. In this post, we will focus on Chapter 12 bankruptcy, which may help some of you Tennessee farmers out there. Commonly known as the Family Farmer Chapter, Chapter 12 is designed specifically to meet the needs of family farmers and fishermen.

To be defined as a family farmer for Chapter 12 bankruptcy, you must meet certain criteria. The farmer’s debts can not be over $1.5 million, which does not include debt owed on a home unless it is directly connected to the farming business. At least half of the farmer’s gross income must have been earned from farming in the year prior to the filing, and at least 80% of the debt must be farm related. Also, the farmer must make an income that is large enough to be able to make payments under a Chapter 12 plan, before the bankruptcy petition is approved.

The Basic Process: To file for Chapter 12 bankruptcy, the debtor must first file a bankruptcy petition at a cost of $200. Within 15 days after filing, the debtor must give a complete list of their liabilities and assets, and must pay a deposit of $500 to the appointed Chapter 12 trustee. Within 90 days the debtor needs to file a repayment plan telling how their creditors will be repaid. The debtor must also file a financial report every month which shows disbursements and receipts. Within 20 to 60 days after the bankruptcy petition is filed, the debtor must attend a meeting where they are questioned by the trustee and creditors and suggestions on the repayment plan are made. Within 45 days since the repayment plan was filed, the court will either approve or reject the plan.

Chapter 12 bankruptcy is very similar to Chapter 13, but has a higher debt ceiling than Chapter 13 because farmers and fishermen must sustain higher debts than workers with normal wages. Debtors must repay all or part of their debts within three years, or five years if they can persuade the court of extenuating circumstances.

Just like I would suggest to those thinking of filing a Chapter 13, I advise anyone that is considering filing bankruptcy under Chapter 12 to consult and with an experienced bankruptcy attorney.


Jonathan Ginsberg has been in private law practice since 1987. He writes and teaches about Chapter 7 and Chapter 13 bankruptcy protection.


  1. lots of questions says

    My husband and I filed chapter 12 because for 23 yrs we were farmers with Tyson foods growing chickens…..extremely hard work below poverty level we had upgraded our houses to their newly improvised specs in 2008 at our costs as always…we were cut off therefore our loss of income though it had. we filed chapter 12 in husband couldnt find a job I was unable to work BC migraines & yrs of pain from bulging discs in my neck which I had surgery in July 2010…just days later my husband got a temp job at Randstadt driving 1 hr 15 min at Jack Daniels in hopes of a reg job some day…….. our mortgage along with credit …was total $80.00…WE had a Federal farm loan included with this which became the main hounding of this main bankruptsy…they share the same square as my lawyer and judge….no chicken houses so my husband cleaned the litter and we traded this with some minnitites because the farm agriculture people had to have money that was farm related since we were in chapter 12…so we raised bottle calves for a yr gave my lawyer 4,100 in the spring and he said we would be eligible for the hardship disclosure…in Spring of 2010 we get a letter from our lawyer saying our case was dismissed…we see him…he lies saying its all part of the hardship…..Feb 2012 our county paper has our property for sale for forclosure the creditors are calling gonna take our car…so we filed chapter 13…to save our home…funny thing our total hasnt gone down ANY…and the FEDERAL AGRICULTURAL AGENCY has uped their 25,000 to $44,000 in less than a yr…not only that but they seized my income tax of $5, 124.00 and we only filed chapter 13 this Feb….my lawyer will not talk to me at all. and I cant believe this has happened to me…I cant believe my chapter 12 didnt work because we had no income coming in from a farm any more…my husband makes less than $500 a wee and chapter 13 has us set now to pay $250 a week….I have applied for SSI because I still have migraines…no insurance…my nerves still hasnt healed in my right arm from my neck surgery BC I had a bone spur on my nerve going down my right arm for 25 yrs…I now have sciatia as well…I need legal help…my lawyer isnt helping me at all.

  2. Lots… you are describing a variety of legal problems that cannot be properly addressed in a blog post response. If you are not getting appropriate response from your lawyer then you need to find another lawyer who can properly advise you.

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