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This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.
In 1986, Congress enacted chapter 12 of the Bankruptcy Code to allow farmer debtors with regular annual income to achieve debt relief. ingly, chapter 12 bankruptcy provides relief to debtors who qualify as family farmers and family fishermen with regular income; see In re Kerwin and 11 U.S. Code 109.
Some Loss of Control Over Business Operations This generally means that activities like selling, purchasing, refinancing, or leasing major capital assets require court approval.
Both Chapters 11 and 13 bankruptcy provide debt reorganization solutions for people struggling financially. Chapter 11 bankruptcy works well for businesses and individuals whose debt exceeds the Chapter 13 bankruptcy limits, and Chapter 13 is often the better choice for individuals and sole proprietors.
The Chapter 12 process provides family farmers and fishermen with an opportunity to reorganize in a manner that is tailored to fit their circumstances better than Chapters 11 or 13. Chapter 11 reorganizations are ideally suited for large companies with strong existing management or for sole proprietorships.
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Chapter 12 is designed for family farmers or family fishermen with regular annual income. It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts.
Another potential downside to filing for Chapter 12 is that it can have a negative impact on your credit score. This may make it more difficult for you to secure loans or lines of credit in the future. Its also important to keep in mind that filing for Chapter 12 bankruptcy does not absolve you of all your debts.

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