The Family Farmer Relief Act of 2019 was recent passed to make bankruptcy more readily available for the struggling family farmers. While a streamlined form of bankruptcy is available in Chapter 12 of the bankruptcy code, it was only available to family farmers with debts of less than 4.4 million. That left a number of struggling farmers with only the option of turning to the more expensive Chapter 11. The Family Farmer Relief Act of 2019 increases that debt limit to 10 million dollars. As a result, more family farms have a greater chance of successfully reorganizing.
Chapter 12 was enacted in to make the bankruptcy process easier for farmers and fisherman. While Chapter 11 can be an option, there are advantages in filing a Chapter 12. Those advantages include allowing a Plan of Reorganaization which is generally simpler than that required in a Chapter 11 case and easier to get confirmed. In addition, there are advantages relating to extending payments to secured creditors over a longer period of time.