Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 11 Bankruptcy?”
Though most people have heard of Chapter 7 bankruptcies (known as liquidation bankruptcy) and Chapter 13s (used to restructure debts), Chapter 12 bankruptcies are far less common. To find out more about what a Chapter 12 bankruptcy is and how it is used, keep reading.
Chapter 12 is actually one of the newer categories of bankruptcy and was only formally made permanent in 2005. Chapter 12 is used specifically for family farmers and family fishermen. Chapter 12 is similar to a Chapter 13 in that it allows the restructuring of a person’s debts to avoid liquidation or foreclosure.
Who is eligible for a Chapter 12 bankruptcy?
Very few debtors are actually eligible to file Chapter 12 bankruptcy and in 2011, the most recent year that numbers have been made available, only 630 of the overall 1.4 million bankruptcies filed in the U.S. were for Chapter 12 cases.