Georgia Chapter 12 Bankruptcy Lawyers

With Bankruptcy Offices in Statesboro and Springfield

It is quite unsettling to have fears about your financial future. While Chapter 12 bankruptcy doesn’t apply to everyone in debt, if you are a farmer or fisherman, it can help you get your life back. Please call our Georgia Chapter 12 bankruptcy lawyers right away to get started.

Georgia Chapter 12 Bankruptcy Lawyers

With Bankruptcy Offices in Statesboro and Springfield

It is quite unsettling to have fears about your financial future. While Chapter 12 bankruptcy doesn’t apply to everyone in debt, if you are a farmer or fisherman, it can help you get your life back. Please call our Georgia Chapter 12 bankruptcy lawyers right away to get started.

Georgia Chapter 12 Bankruptcy Lawyers

Georgia Chapter 12 Bankruptcy Lawyers

With Bankruptcy Offices in Statesboro and Springfield

It is quite unsettling to have fears about your financial future. While Chapter 12 bankruptcy doesn’t apply to everyone in debt, if you are a farmer or fisherman, it can help you get your life back. Please call our Georgia Chapter 12 bankruptcy lawyers right away to get started.

Testimonials

“You helped me restore my faith in so much that looked bleak and decrepit. Along this bumpy road, my lovely daughter is safe, and home, and starting to find peace again…Thank you. All the pieces unfolded and fell into place through a progression only the Lord could have planned. But the people who fulfilled his plan did it through greatness and kindness and strength. In my opinion you and Martha have done Gods work and the Judge came through! I am indebted to you both. Please understand, I can be a force and support as well. “What doesn’t kill you makes you stronger”. I still have a long way to go…so I hope that statement is true. My commitment to be there for you is equally strong. It will be a tough journey. I Pray. You guys are amazing. Thank you for everything.”

BONNIE GRINGER

“We were referred to Mike Hall by a friend who told us that if they had used him in the beginning, they would have had a lot better result. Using Mike ourselves, we have had the same experience. Mike is very personable and gave us some very wise council. We could tell he was trying to help us. We have used him for several issues that have come up, and he has always handled them in a professional and timely manner. He is quick to answer emails or phone calls, and takes his time answering all of your questions. We are very pleased with his services and would highly recommend him to anyone who has a legal problem.”

LYNN & PAM KELLEY

“After a two and a half year battle, my son and I got the justice we longed for. The only quality that I didn’t like about Paige was that she was patient. Which, is a very good quality to have. However, hindsight being 20/20, I’m glad she was so patient. Paige and Ashley (her paralegal) were always in communication with me, and responded in a timely and appropriate manner. When opposing counsel started her antics and attempted to berate and take Paige’s eye off the prize, she didn’t allow it. I sincerely appreciate all they did for me and my son. I know my circumstances were extreme, but Paige looked out for the two of us. I highly recommend the law group, and will always be indebted to them.”

DUSTIN SHAW

“This review is in regards to how attorney Martha Hall handled my cases. Before Martha Hall, I was taken advantage of in family court in Jefferson County and Effingham County with sub par attorneys that resulted in rulings that were unfair to me and created headaches and financial difficulties. I experienced three attorneys before Martha Hall. I never felt that I had equal representation in the courthouse, until I discovered Martha Hall. Since I have hired Martha Hall, I have had equal or better representation and my cases have closed with fair rulings. This is solely a result of having Martha Hall as my attorney. I will not change thus moving forward if I need any legal services. She is worth every penny.”

KEN GIBSON

“I just have to say the professionalism and conduct of the Hall and Hall attorneys was fantastic from the time we walked in the door. We met Sarah then Mrs. Martha Hall. They were all very attentive and compassionate. Kara, our paralegal, was always there for us. She was always there via email or phone contact. We had a very sensitive legal case and Mrs. Martha Hall walked us through it with compassion and professionalism. I cannot say enough good things about this group or thank them enough for doing what needed to be done.”

MYA AND DEAN CAPE

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Who is Eligible for Chapter 12 Bankruptcy

Chapter 12 of the U.S. Bankruptcy Code was first enacted in 1986, during the height of 1980s farm crisis. Designed to be a hybrid of the more complicated Chapter 11 business reorganization and the individual-only Chapter 13 adjustment of debts, Chapter 12 allows “family farmers” (both businesses and individuals meeting certain farm-related asset and income tests) to adjust their debts in a simpler, more debtor-friendly, bankruptcy proceeding. The debt limitation for a farmer is $10,000,000. For a fisherman the debt limitation is lower at $2,044,225 in 2020.

A family farmer can be an individual, an individual and spouse, or a corporation or partnership.  Individuals must be engaged in farming, and over half of their total debts and annual gross income must be farming related.   For corporations or partnerships, over half the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives, the family or the family and its relatives must conduct the farming operation, and over 80% of the value of the corporate or partnership assets must be related to the farming operation.  Under the new law, the family farmer’s debts may not exceed $10 million. The family farmer must have regular annual income to ensure payments to creditors under his plan.  Income may be seasonal, so long as it is stable.

In order to file for Chapter 12 bankruptcy, you have to:

  • operate as a commercial farmer or fisherman
  • be in debt up to a but not more than the capped amount
  • have half of the debt owed because of the operation of farming or 80% of the debt owed because of commercial fishing
  • receive more than half of your gross income from your farming or fishing

Defining Chapter 12 Bankruptcy

Your bankruptcy case starts when you file a petition for relief through Chapter 12. Usually, you will continue your operations as farmer or fisherman.

Some of the differences between a typical chapter 11 case and a chapter 12 case include:

  • Co-Debtor Stay – Like Chapter 13, Chapter 12 includes a stay against co-debtors, with respect to “consumer debts.”
  • Shortened Timelines – The Debtor’s plan of reorganization must be filed within 90 days after the petition date. Confirmation of the plan is to be concluded in most cases within 45 days after the plan is filed. As with Chapter 13, the plan period may be three to five years.
  • Chapter 12 Trustee, but no Committee – Chapter 12 provides for the appointment of a Trustee with powers similar, but not identical to, a Chapter 13 Trustee. No Unsecured Creditors’ Committee is appointed.
  • Asset Sales without a Section 363(f) block – Section 1206 of the Code provides that, in addition to Section 363(f), the “trustee” may sell farmland and farm equipment, free and clear of interests in those assets. This “super sale” right is subject to uncertainty in some jurisdictions, with cases and secondary authorities disagreeing over whether the right is reserved only to the Chapter 12 Trustee, or whether it may also be exercised by the Debtor as debtor-in-possession. Objecting secured creditors may still credit bid up to the amount of their debt.
  • Different Standard for Adequate Protection – Section 361 of the Code does not apply to Chapter 12; instead there is a separate standard in Section 1205 that includes, as adequate protection, payment of current market rent for use of farmland and eliminates the “indubitable equivalent” option.
  • Expanded Cramdown Rights – The Debtor’s plan may “modify the rights of holders of secured claims”, without any further statutory qualification. Unlike Chapter 11 or Chapter 13 plans, this modification may include loans secured by the Debtor’s primary residence. Courts have allowed lengthy “cramdown” terms on real estate loans and on fully matured prepetition short-term equipment loans in order to save the family farm.
  • No One Votes – Creditors do not vote on Chapter 12 plans; they may only rely on their plan objection rights. There is no disclosure statement accompanying Chapter 12 plans. As with Chapter 13, this tends to focus plan confirmation disputes on cramdown terms, and whether the plan is feasible.
  • No Absolute Priority Rule – Chapter 12 presumes that the Debtor will maintain its ownership of the farm assets. Accordingly, there is no rule in Chapter 12 requiring classes of claims to be paid in full before the Debtor may maintain its ownership.
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Better Understand What a Chapter 12 Bankruptcy Plan Looks Like

If you have disposable income, which is categorized as income that does not go towards the cost of living or the cost of your payments for the business/creditors, you are going to have to turn that over to your trustee. This disposable income is going to be used to cover the following:

  • costs of operations
  • cost of supporting your family
  • the 11% fee that the trustee charges for handling payments required in the plan

With Chapter 12 bankruptcy, you may be able to reduce  your secured debt, such as mortgages on farms and loans on boats to the market value at the time of filing. Your lenders and creditors are going to have to be paid the value of collateral  pledged for this debt, at least. If there is a balance left over that is owed, , that will be looked at as unsecured debt. For secured debt, the payments can extend past the limit of the repayment plan. The interest can also reflect the current market rate.

Please note that the plan for your Chapter 12 bankruptcy is going to have to be in the best interest of the creditors, as they are going to be looking to be repaid as much as they would have had you filed a Chapter 7 bankruptcy. If this is so, the unsecured debt may end up being paid back in pennies on the dollar or no payment whatsoever.

Frequently Asked Chapter 12 Bankruptcy Questions

Who is eligible to file for chapter 12 bankruptcy Who is eligible to file for chapter 12 bankruptcy?

People often ask us who is eligible to file a Chapter 12 bankruptcy in Georgia. First of all, you have to be a farmer. The definition of a farmer is that 50% of your debts are farming related debts and at least 50% of your income comes from farming. Then there are also debt limitations for a Chapter 12. When the debt limitations occur, you’re around $4.2 million, so if your debts are higher than $4.2 million, you may have to go to a Chapter 11. You could still be a farmer in a Chapter 11, but a Chapter 12 is an expedited procedure for farmers to file a bankruptcy. You do have certain debt limitations and certain qualifications. If you need any more information about who is eligible and who is not eligible, please give our office a call.

Will I lose my business if I file for chapter 12 bankruptcy?

A question that everyone is concerned with in filing a Chapter 12, which is a farmer bankruptcy in Georgia, is whether they will lose their farming business. The whole idea behind a Chapter 12 is to give the farmer a good opportunity to save his business. It allows you to stretch out your debts and allows you to categorize creditors as to who gets paid when, how, and how much. It allows trustee payments to be made to fund certain creditors. It allows for you to schedule your payments to correlate with your crop, your government payments, and things like that. The whole idea behind a Chapter 12 is to preserve the farm, and that is the whole intent of a Chapter 12 bankruptcy. It is a farmer reorganization. If you have any questions, I’d be happy to answer any further questions that you may have.

Can the debtor still issue payroll checks on its regular paydays in a chapter 12 bankruptcy?

One of the questions that always happens in a Chapter 12 bankruptcy since it is dealing with a business and farming enterprise is whether or not the debtor can issue payroll checks on its payroll account in a Chapter 12. The answer is yes. You obviously would want to set up a separate debtor in possession account for a Chapter 12 bankruptcy, but yes, you can always pay your employees in a Chapter 12 bankruptcy pretty much like you always have. There are certain qualifications necessary to be sure that the cash that you’re paying those employees is authorized by the court. That’s one reason that you would want to use an attorney who’s experienced in Chapter 12, who knows the trustee, knows the judges, and knows the proper court procedures to get that done for you. If you have any questions, please give me a call.

Can the debtor use cash collateral without court approval?

One of the big issues our clients always ask us is what they can use to fund their operation. Of course, cash is considered cash collateral in a bankruptcy, and to use cash collateral in a bankruptcy, you have to have one of two options. One, the creditor approves for you to use it, and of course, if you have permission, the creditor gives you permission. You can use cash collateral. Cash collateral is defined as proceeds from the sale of crops, from the sale of equipment, etc., or if the creditor will not give you permission, you can ask the court to grant you permission to use cash collateral. A court will do that if you can show to the court that the creditor has adequate protection in other assets or other means to get paid. Again, if you have any questions concerning the use of cash collateral, please give our office a call.

How are disputed claims resolved in a chapter 12 bankruptcy?

One question that a farmer asked me the other day was how a disputed claim would be handled in a Chapter 12 bankruptcy. For instance, he had been sued by a fertilizer company that he believed did not deliver all the fertilizer he requested. A disputed claim can be handled in two ways in a Chapter 12. One is you file an objection if the creditor files a proof of claim, which is a claim in the bankruptcy, and you can object to that claim. A second way is you can file a complaint in bankruptcy court to dispute that claim, but you have avenues in bankruptcy to dispute and to resolve any claims that are filed. If you have any other questions, please give me a call.

How do I choose the right attorney for a chapter 12 bankruptcy How do I choose the right attorney for a chapter 12 bankruptcy?

One of the questions that everyone should ask for filing a Chapter 12 bankruptcy in Georgia is whether or not that attorney is experienced in a Chapter 12 type proceeding. A Chapter 12 proceeding and a Chapter 11 proceeding are vastly different from Chapter 7s or Chapter 13s. If you are looking for an attorney to file a Chapter 12 bankruptcy, a farming bankruptcy, then you would want to use an attorney who’s experienced in a Chapter 12 bankruptcy: the procedures, the trustee, and the type of plans that can be approved in a Chapter 12. If you have any questions, please give our office a call. Thank you.

How long does a chapter 12 debtor have to prepare and file a plan of reorganization?

One of the questions in filing a Chapter 12 plan is when you have to file a Chapter 12 plan in Georgia. The court requires that a plan of reorganization in a Chapter 12 be filed within 90 days of the filing of the petition. You can always ask for extensions, but the court does want the case to move forward. A Chapter 12 is a more condensed version of a Chapter 11 case and a much more simplified procedure. Typically, a Chapter 12 plan is filed within 90 days of filing the petition. If you have any questions, our office is familiar with Chapter 12s and can provide those answers to you.

What is a chapter 12 bankruptcy?

Many people ask us what a Chapter 12 bankruptcy in Georgia is. Chapter 12 bankruptcy is a farmer bankruptcy. You have fishermen that are also under a Chapter 12, but we really do not have a tremendous fishing fleet outside of Coastal Georgia, so in Georgia, people talk about a farmer bankruptcy. A Chapter 12 deals strictly with farmers. It’s somewhat of a hybrid between a Chapter 13 for normal folks and a Chapter 11 for more complicated businesses. A Chapter 12 is set forth so that it is a simpler bankruptcy directed solely to farmers. Our famer businesses are very complicated, so it takes a lot of analysis to see whether or not a Chapter 12 really fits the farmer’s situation. If you have any questions, please give us a call.

What is the chapter 12 plan?

People ask us often what a Chapter 12 plan in Georgia is. A Chapter 12 plan is the plan by which you propose to pay back your creditors over time. It itemizes each creditor, how much that creditor is going to get paid, over how long a period that creditor is going to get paid at what interest rate, and whether that creditor gets paid in full or some smaller percentage of what is owed to that creditor. A plan is based on the disposable income of the farmer as well as the assets that the farmer is attempting to retain. You look at those, and you come up with a plan. A plan is typically filed within 90 days of filing the Chapter 12 bankruptcy. If you have any questions, our office has helped many farmers with Chapter 12 cases, and we would be happy to help you.

What pre-filing actions should not be taken before filing chapter 12 bankruptcy What pre-filing actions should not be taken before filing chapter 12 bankruptcy?

One of the questions some of our clients ask us in filing a Chapter 12 in Georgia is what they should do during a Chapter 12. Farming is a very, very tough business, and how anyone makes a living in farming day in and day out, year after year is getting tougher and tougher as years go by. When I was a small kid in Georgia, it wasn’t that hard. People made a good living. You had stable crop prices. You had stable fuel prices. You had stable input prices, and the government payments were not that big of a deal. Now it’s a big deal. Everything’s a big deal, and it’s very, very tough to be a farmer in Georgia.

Really, what you need to do is be sure you have all of your debts, your assets listed down. Look at your cash flow and meet with your attorney. Choose an attorney who specializes in Chapter 12 bankruptcies to look at how you need to organize your business for the future, so that you can try to anticipate problems. When problems arise, you can then be in a position to address those, if needed in a Chapter 12 bankruptcy. Bankruptcy works magic in many situations and especially farming situations dealing with secured debt, unsecured debts. A Chapter 12 can last five year as far as what you pay the trustee, but they’re payments that can be stretched out to 20 to 25 years when it’s especially collateralized by land. You really want to look at the value of your land, the value of your irrigation systems, and your cash flow, and work with your attorney to develop a plan even prior to the filing of the bankruptcy that would be successful, if a bankruptcy was required.

That’s really the efforts that we try to make at Hall & Navarro — to look at the long-term aspect of your farming operation and how you can survive in these turbulent times. If you have any questions, please give us a call. Thank you.

Call Our Georgia Chapter 12 Bankruptcy Lawyers Today

Debt can cause a lot of stress. Let us help you get the peace of mind you have been searching for. Call our Georgia chapter 12 bankruptcy lawyers right away to get started.