Handling Chapter 12 Debt Before It’s Too Late

Do you feel like you’re drowning in debt? We can show you how to handle chapter 12 debt before it’s too late. Call our Georgia lawyers today.


Keeping a Business After Chapter 12 Bankruptcy

Handling Chapter 12 Debt Before It's Too LateA 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.


Issuing Payroll After 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.


Using 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.


Choosing an 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.

Are you or a loved one in the process of filing for bankruptcy in Statesboro, Springfield, or Swainsboro and have questions about handling Chapter 12 debt before it’s too late? Contact the experienced Georgia bankruptcy attorneys at Hall & Navarro today for a consultation and case evaluation. We can help get your life back on track.

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Bankruptcy Attorney
J. Michael Hall

Paige Navarro, Bankruptcy Attorney in Statesboro, GA

Bankruptcy Attorney
Paige Navarro

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