When and How to File for Farm Reorganization Under Federal Protection in Chapter 12 Bankruptcy:

In the State of Hawaii, a farmer or fisherman that needs protection from creditors should seriously consider Chapter 12 bankruptcy while the business is still a viable operation. If you wait too long to restructure your debt through the federal bankruptcy system, you may create problems that could stand in the way of a successful Chapter 12 plan; the plan that would allow for the adjustment of debts. In order to benefit from Chapter 12, consulting with an attorney is vitally important, because an experienced Hawaii bankruptcy attorney can do the analysis necessary to determine if you qualify and whether your debt can be restuctured, including reamoritization of mortgage debt at a reduced principal balance for as much as 30 years. Mortgage restructuring for a principal residence is not available under any other chapter of the bankruptcy code.

Trying to handle your own case can be extremely difficult and laced with pitfalls. For example, if a Chapter 12 case is dismissed for failure to follow some procedural order, the family farmers may be ineligible to file Chapter 12 relief for a period of time and their subsequent case may be dismissed if during the prior 180 days there was a prior filing in which conduct did not align with Chapter 12 protocol. Only a bankruptcy attorney can prevent this disappointment.

A federally recognized debt relief attorney can walk you through the process so that it becomes an easy one-—trying to go it alone can be a nightmare of hassles, not to mention can often result in missing important deadlines or not fully gathering necessary documents. The attorney will help you do everything, from receiving credit counseling, to filing the initial petition, to dealing with the court order, and preparing and filing the debt adjustment plan—-the plan you have drawn up with your attorney that will save your business. You will have 3 to 5 years to perform this plan, at the end of which, much of your debt will be discharged and your business fully viable again. You may be able to reamoritized your secured assets at lower payments for a longer period of time as a way to remain viable into the future.