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Farm bankruptcies continue to rise
A new report sheds more light on the increase in farm bankruptcies.
Debtwire reporter Maura Sadovi says her investigation into who was filing for specialized Chapter 12 protection that’s only available to family farmers revealed those bankruptcies have been trending higher the last four years.
“That coincides with the drop in a number of commodity prices.”
She tells Brownfield Chapter 12 bankruptcies have climbed from 317 in 2014 to 474 in 2018.
Already this year, that trend is continuing with 110 filed through March 22nd compared to 100 at the same time a year ago.
“We were seeing filings across the country, and we saw high incidents of farm bankruptcies with corn, dairy, soybeans and cattle.”
Her report shows Wisconsin, Minnesota and Kansas had the most Chapter 12 filings.
Once a farmer has filed, Sadovi says they have 90 days to prepare a reorganization plan, which will be reviewed by banks and creditors.
What makes Chapter 12 different is that a judge has final say, as opposed to Chapter 11 bankruptcy where creditors vote on the plan.
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