Chapter 12 Bankruptcy: The Indiana Farmer’s Special Advantage

April 28, 2016

The Indiana farmer has some special advantages by hiring a Chapter 12 bankruptcy attorney.   Indianapolis, the “farm” capitol of Indiana, contains a a few bankruptcy attorneys more-than-willing to accept the rare Chapter 12 bankruptcy case.   Perhaps due to our state’s farm roots, these limited, willing bankruptcy attorneys would jump at the chance to help an Indiana farm survive, regardless if the case was profitable.  Chapter 12 is especially generous to the family farmer and fisherman.  A Chapter 12 bankruptcy attorney can open up unique Chapter 12 advantages that are very useful for farmers.

Indiana Chapter 12 Bankruptcy Attorney Advantage 1: Much Lower Costs

Chapter 12 – for what you are able to accomplish- is most likely the most affordable of all bankruptcy reorganization options.   Chapter 12 is a very versatile reorganization tool.  It can allow Indiana farmers to restructure their secured farm loan payment(s) while reducing (sometimes drastically) the amount they must pay their other debts.   The amazing part is that (for what you get out of the case) the cost is much less than Chapter 11 and even Chapter 13 relief (at least on the court cost and average per-hour basis).

An Indiana Chapter 12 bankruptcy has a court cost of only $275 (as of April 2016).   This is less than every other chapter of bankruptcy – Chapters 7, 9, 11, and 13.    In comparison, the Chapter 11 court cost is $1717.   In addition, because of the general tendency for attorneys to come to family farmers’ aid, attorney fees are usually flat fee and limited in Chapter 12.  An attorney may only charge $6500 for an entire Chapter 12 case – many times with as little as NONE of the fees due at the commencement of the case.   Chapter 11, in comparison can cost $10,000 to even $100,000 – a much greater amount that is usually billed on an hourly rate.

Indiana Chapter 12 Bankruptcy Attorney Advantage 2: Getting the Best of Both Chapter 11 and Chapter 13

Chapter 12 bankruptcy also gives Indiana Farmers the best attributes of Chapter 11 and Chapter 13.   Chapter 11’s largest advantage is arguably it’s fully “custom” nature.  In Chapter 11, you can break down all of your creditors into separate classes and negotiate as to how much each creditor will receive.   You retain much of this “custom” ability in Chapter 11.

The Chapter 13 attributes that are retained in Chapter 12 are the low costs and formulated patterns that assist in a quick and affordable reorganization.  A trustee familiar with Chapter 12 law is appointed in a Chapter 12 case.  This very experienced Trustee usually also oversees Chapter 13 cases.    The Chapter 12 trustee will ensure that a reorganization plan is confirmed and implemented quickly.  No long waiting periods (like in Chapter 11) hinder the reorganization process.

Indiana Chapter 12 Bankruptcy Attorney Advantage 3: Public Policy Favors Family Farmers

Family Farmers are strongly favored through public policy- such as government incentives, protection programs, and lower farm taxes.  This public policy favor continues into all aspects of Chapter 12.  From willing Chapter 12 bankruptcy attorneys, judges who want to make cases work, creditors who will work with farmers, to a Trustee who will do whatever is possible to make the case work – generally, all parties are to some degree in the farmer’s favor.   If you file Chapter 12 bankruptcy, you will be offered every opportunity to succeed if you are still capable of repaying your debts.

Conclusion: Chapter 12 Bankruptcy’s Advantages Make it A Powerful Reorganization Tool

Finding an Indianapolis Chapter 12 bankruptcy attorney can open up new doors for a farm to continue that are not possible outside of bankruptcy.   Farmers across Indiana have frequently found themselves in the same predicament: their debt is getting larger and larger with repayment soon impossible.  With Chapter 12 bankruptcy, it may be possible for many of these farmers to eventually restore their farm operation’s stability and profits.


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