Chapter 12 is a reorganization bankruptcy for which group?

Chapter 12 is a reorganization bankruptcy for which group?

• A. Nonprofit organizations
• B. Agricultural/farmers
• C. Small businesses
• D. Municipal entities

Answer: (B)

Chapter 12 is designed specifically for family farmers and, in some cases, family fishermen, who have regular annual income. It provides a way to reorganize debts and continue operating the farming business under a flexible repayment plan, with protections that fit the seasonal and commodity-price risks of farming and help preserve the farm’s assets. This specialized focus on farm operations is what sets Chapter 12 apart from other chapters. Nonprofit organizations aren’t the target, small businesses typically pursue Chapter 11 for corporate reorganizations or Chapter 13 for individuals, and municipal entities use Chapter 9.

Chapter 12 is designed specifically for family farmers and, in some cases, family fishermen, who have regular annual income. It provides a way to reorganize debts and continue operating the farming business under a flexible repayment plan, with protections that fit the seasonal and commodity-price risks of farming and help preserve the farm’s assets. This specialized focus on farm operations is what sets Chapter 12 apart from other chapters. Nonprofit organizations aren’t the target, small businesses typically pursue Chapter 11 for corporate reorganizations or Chapter 13 for individuals, and municipal entities use Chapter 9.