Chapter 12
Bankruptcy Chapter 12 is specially introduced for families of Farmers
and Fishermen. Those families should have an annual income from any source
and this law should help those families to repay their debts up to 5
years. The chapter 12 is known for cheaper as compared to chapter 11,
also the debtor would have to face lesser legal complications. It gives
better chances for fishers to get their business back with less mental
agony.
Chapter 12 could be filed by one of the highest and regular earner of
the fisher’s family member. That member should be have a stable
and secure job or business so the repayment could be paid smoothly over
the period of the time. The repayment time could be granted from 1 to
5 years. One could file the case in the nearby living area of the bankruptcy
court; if a debtor is living in California area then he/she should file
the chapter 12 related documents to the dedicated California
bankruptcy court. The entire legal court proceeding would be handled by the same
designated court. There is another sweet legal advantage for a married
couple, the husband and wife would be the joint petitioner or even husband
alone could file the petition in the court. The solo husband would not
get any benefit if his wife has a regular and secure earning so, we will
suggest going ahead for joint filling with your wife.
The debtor has to file following formalities:
a. Financial Statements
b. Business Contracts Signed with any business associations.
c. Time Frame of upcoming earnings from ongoing business
d. Assets and liabilities plans
Chapter 12 divides the fisherman’s bankruptcy filling into two
categories:
a. An individual: One of the highest earners of the fisher family member
with permanent income regularly could file the petition.
b. A partnership/organization
The court cases were never being cheap and mind relaxing, you should
pay $200 as court fees and $39 as administrative charges while filling
the petition to the designated court clerk. You can pay the court charges
in installments too and that’s should be in less than 4 months.
The failure of bankruptcy court fees payment may result in the case dismissal.
So, we will suggest paying the total court fees at one time for smooth
court proceedings. The joint and solo filling would be the same. The
debtor should file the bankruptcy form carefully with following details:
a. List of all debtor properties
b. Debtor’s source of income, income amount and time frame of the
earning.
c. Complete monthly expenses
d. Details of all creditors, their credit amount and kind of the payment
All dependents individual of the fisheries family should show their
earning proof and other income details too. They should not think that
main applicant is the only person to give details, the chapter rules
ask every house members to get involved in the judicial trail cycle.
If a fisheries business related trust file a chapter 12 then their all
trustee member should file their earning and business details also. All
members should document the income and business details carefully. The
better documented filling would get justice in much timely manner. An
administrator assigned by the special bankruptcy court monitor the entire
legal proceedings. All the documents should be presented to the administrator
only. The administrator works as disbursing manager and handle all the
creditor payments and debtor’s legal petition. There are few selected
districts in the USA where a standing trustee appointed by the prominent
bankruptcy dedicated court or trustee.
One the chapter 12 filling accepted by the administrator or standing
trustee, then no creditor shall file any lawsuit or demanding the credit
money from the debtor. Even the creditor can’t force the debtor
for money. The creditors and co-creditors would be protected from any
credit demand notices too. This step is initiated automatically. The
designated court clerk send court notices to every creditor presented
in the bankruptcy filling application by the fisherman. We request the
creditor to fill the creditor addresses carefully and check writing mistakes,
because they might not get the court notice if the incorrect address
filed.
Meeting of Creditors
“Meeting of creditors” invited after 30 days of the chapter
12 filling. The meeting days shall be extended in some special cases
but would be invited in less than 2 months. The debtor would be given
chances to explain the proposal with creditors under the supervision
of the court trustee. Creditors would discuss the repayment time span
and the payment criteria and abide by the laws accordingly. The bankruptcy
filling applicant also known as the debtor should attend the “Meeting
of creditors” and propose the acceptable repayment plans, in case
of joint filling by the couples, the both are applicants are required
to attend the meeting. Such meeting would not supervised by the bankruptcy
designated judge.
This is the initial step legal proceedings; the both sides will initiate
a formal talk on the repayment procedure. A next hearing meeting would
be organized by the trustee on debtor’s repayment plan. This meeting
should be attended by the positive creditor of 1st meeting. Such creditors
are most likely to accept the proposed repayment plan. The approved plan
by creditor should be presented by the bankruptcy chapter 12 court. The
court would direct the debtor to deposit the accepted amount to the trustee;
the trustee would handle the creditor’s payments only and disburse
the money to the all creditors. This is highly likely that less amount
of money to be given to each creditor party.
The creditor would make 3 types of claim, 1. Priority, 2. Secured Claim
and 3. Unsecured Claim.
- Priority Claims : are identified by the court and most likely are
court fees
- Secured Claims: are real estate and boat documents were used for lending
the money and owned by the debtor and could be sold off for assessing
the credits.
- Unsecured Claims: no secure items were presented by the debtor against
taking the credit.
The debtor should pay the priority claims on time otherwise the court
proceedings might be taken off by the judge. You can’t the court
to work for you without being paid, hope you understood the logic here.
The bankruptcy chapter 12 could be solved in Four to Five years after
filling and working closely with the designated special court. Appointed
trustee gives second thought on secured claims and would consider lesser
priority to unsecured claims made by the creditors. Once the debtor made
the payments to the trustee the priority claims gets the amount 1st and
then the secured claims would be handled accordingly.
The designated special judge would issue discharge notice to debtor
once all the loans settled down. |
