Chapter 12 farm bankruptcies continue to rise as farmers and ranchers face a prolonged downturn in the U.S. agriculture economy that’s been exacerbated by 2-3 years of poor growing seasons and retaliatory tariffs on U.S. goods. So, when you ask “why are farmers filing for bankruptcy?” – the answer is that there are multiple compounding factors. Farmers struggling to meet their debt requirements often feel overwhelmed.
Skilled and experienced chapter 12 bankruptcy attorneys can review available options with farmers and ranchers and discuss a way forward that makes the most sense for each individual. These are difficult times in America, and the best choice to relieve debt may be an orderly Chapter 12 bankruptcy. To learn more about how Birk Law Firm can help, call us at 573-332-8585. We’re here to help.
Why are so many farmers filing for bankruptcy?
Times are hard and farmers face a very uncertain future. Attorney Kelvin Birk knows this firsthand. He grew up on a diversified farm in southeast Missouri and owns a farm. Birk is a lawyer as well as a certified public accountant, with more than 30 years of experience in accounting and tax and business consulting. Located in Cape Girardeau, MO, he has more than 20 years of experience in numerous legal matters.
This combined agricultural law experience allows Birk Law Firm to provide a level of service above that of other firms. We understand the struggles of farmers and ranchers, and we’ve helped many of them achieve a stronger footing and understand the tax implications. We have experience in providing myriad legal representation services to residents of southeast Missouri and other areas.
When people ask, “why are so many farmers filing for bankruptcy?” – we thoroughly understand the answer and potential solutions.
Why are small farmers struggling?
Small farmers seem to be struggling the most. This is because they are often multi-generational family farms that do not have the financial resources of larger corporate farming. Farm Bureau data shows that as of late 2019, Chapter 12 filings increased 24% compared to the same period the year before. Farm debt in 2019 was projected to be a record-high $416 billion, with $257 billion in real estate debt. Add to that $159 billion in non-real estate debt, according to Farm Bureau. The repayment terms on this debt, according to data from the Kansas City Federal Reserve, reached all-time highs for several categories.
With record-high debt, and more farmers extending their repayment terms, Chapter 12 farm bankruptcies remain in record territory. Data from the U.S. Courts reveal that for the 12-month period ending September 2019, Chapter 12 farm bankruptcies totaled 580 filings — the largest number since 676 filings in 2011.
Farm Bureau data from 2019 shows that more than 40% of the farm bankruptcies (255), were in the 13-state Midwest region. Chapter 12 bankruptcies in the Midwest were up 13% compared to prior-year levels and were at the highest rate in more than a decade.
What is Chapter 12 bankruptcy?
The law governing Chapter 12 farm bankruptcies was significantly changed in 2019. This change allowed a farmer with larger debts to qualify for Chapter 12 instead of a potentially less favorable Chapter 7 or Chapter 11. A farmer filing Chapter 12 bankruptcy can now have up to $10 million of debt. Prior to this recent change, a farmer with $10 million in debt was not eligible for Chapter 12.
If a farmer or rancher qualifies for Chapter 12, they can choose from a variety of bankruptcy options, which the Birk Law Firm would be glad to explain. As a farm owner who understands the agricultural life, attorney Kelvin Birk is well versed on all of these bankruptcy options and can help you decide which direction is best for your unique circumstances.
Chapter 12 farm bankruptcies continue to increase as farmers and ranchers struggle with a prolonged downturn in the farm economy. And with so much uncertainty in 2020 and beyond, this financial stress can cause sleepless nights and high anxiety. There are times to stand your ground and battle on, and there are times when it’s time to try a new direction, including exploring Chapter 12 bankruptcy. Attorney Kelvin Birk knows exactly where you’re coming from and what the agricultural life is all about. He also wears the hat of a CPA and can talk you through the numbers and discuss tax implications. Call us today at 573-332-8585 for a private consultation.
Farmers filing for bankruptcy get answers
To make a good decision, you need good information. Attorney Kelvin Birk can provide you with the most up-to-date, informed and strategic guidance about bankruptcy options. He can help you create a list of assets and liabilities, review banking documents, analyze debt, and assess the severity of your situation. All of these conversations are confidential. At Birk Law Firm, we know that farming is at the heart of agricultural families, and deciding to make a change has not only financial implications but lifestyle implications, too. Chapter 12 is more than just an income statement and balance sheet analysis. It’s a family decision with far-reaching outcomes.
Contact Chapter 12 Attorney Kelvin Birk Today
The stress and worry caused by mounting agricultural debt can be stifling. We understand the tension and frustration caused by a farming financial crisis. It’s important to remember that the pressures of farming are often beyond our control and can be caused by economic forces, weather, international trade agreements, and a whole host of other huge factors. Exploring Chapter 12 bankruptcy is not a personal failing but a proactive solution that allows you to move forward with life. That’s what attorney Kelvin Birk can help you achieve. We can discuss your options, create a plan and step forward into a new future. For a confidential consultation, call us at 573-332-8585.