The financial relief from bankruptcy can allow a family or business to get back on its feet again. However, certain people do not fit into the right circumstances to qualify for Chapters 7, 11 or 13.

According to the U.S. Bankruptcy Courts, the solution designed for family farmers or fishermen is Chapter 12 bankruptcy. Operations that involve an individual or an individual and spouse must meet the following criteria.

Criteria for the operation

Farmers and fishermen in this category must operate a farming or commercial fishing operation. The operation is not a business partnership or corporation, and only the debtor can file. (Other criteria apply for partnerships and corporations.)

Criteria for farming operations

In the case of the farm operation, its secured and unsecured debts must not be more than the limit, which is currently $4.153,150. A minimum of 50% of the total — excluding the debt related to the residence — must be debt related to the operation. Over 50% of the individual’s/couple’s gross income from the previous tax year or the second and third previous tax years had to come from the farm.

Criteria for commercial fishing operations

In the case of the fishing operation, its secured and unsecured debts must not exceed the limit, which is currently $1,924,550, with an 80% minimum related to operations and exclusive of the residence. The individual/couple must have made more than 50% of the previous tax year’s gross income from the fishing operation. The current dollar amounts are subject to changes in laws and requirements.

By determining income and debt with these unique criteria, farmers and fishermen can qualify for reorganization and debt relief, even if their income is seasonal.