Chapter 12 Bankruptcy Attorney in Waco, TX

Chapter 12 bankruptcy is a specific type of bankruptcy law designed to reorganize the family farmer. Unfortunately, fewer and fewer family farms are able to survive in this challenging economy. Additionally, most of the produce and animals raised for consumption in the United States are raised in huge corporate farms. The family farmer is really a fading reality.

Erin Shank, our Chapter 12 Bankruptcy Attorney, has successfully reorganized several family farmers. In 2011, she filed a Chapter 12 Plan that saved a family farm that had been in a rancher’s family since 1850. A large Houston bank and the Chapter 12 Trustee fought Ms. Shank and her client in his reorganization attempts for over one year, but the Waco Bankruptcy Court ruled in the rancher’s favor on virtually every issue and this family farm was saved. Erin will always remember this case as one of the hardest fought and successful cases in her legal career. However, most family farms can be reorganized without such a long protracted legal proceeding.

In 2000, Erin successfully filed and confirmed a Chapter 12 Plan for an 80 year old farmer who grew strawberries and other berries in Central Texas. Erin never bites into a strawberry without remembering that special client and what an honor it was to reorganize his berry farm.

How Does Chapter 12 Bankruptcy Work?

When a farmer files a Chapter 12 case, the farmer also files a plan to reorganize the debt. A Chapter 12 bankruptcy filing can be a good choice for farmers, because it can be significantly less expensive and less complicated than Chapter 11 filing and reorganizations can occur over a quick three year term. A family farmer can restructure up to $1.5 million in debt, as long as at least 80% of that debt arises from farming operations.

If the farm is incorporated, at least 90% of the corporation’s value must come from farming operations and the family operating the farm must own at least 50% stock or equity in the farm. If the debtor is an individual, over half of the debtor’s gross income must have come from farming during the year before your Chapter 12 bankruptcy case is filed. The farmer’s income must be stable enough to make the payments proposed by the farmer under the Chapter 12 plan.

If you are a farmer in Central Texas struggling with farming debt, give us a call – our Chapter 12 Bankruptcy Attorney will be happy to put her years of experience as a bankruptcy lawyer to work for you!

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