Chapter 12 - Family Farmer Bankruptcy Act of 1986

Abstract

In October of 1986 a new chapter of the United States Bankruptcy Act was enacted. Chapter 12 bankruptcy, referred to as the Family Farmer Bankruptcy Act, was enacted to alleviate some of the financial problems faced by agricultural producers. This study provides background information about bankruptcy, the history of bankruptcy, and of farmer bankruptcy, including the history of Chapter 12. After specifying the major legal constraints and requirements for a Chapter 12 bankruptcy plan, it was illustrated that Chapter 12 does not mitigate the major financial problems which occurred in Montana and associated regional agriculture. Specific instances wherein a Chapter 12 bankruptcy plan might be feasible were covered.