Chapter 12 of the Bankruptcy Code 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. Under chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years. Generally, the plan must provide for payments over three years unless the court approves a longer period "for cause."
In Texas, Chapter 12 of the Bankruptcy Code is tailored for 'family farmers' or 'family fishermen' who have a consistent annual income and are facing financial difficulties. This chapter allows these individuals to create and implement a repayment plan to settle their debts partially or in full over a period of three to five years. The repayment plan typically requires installments to be made to creditors over three years, but a court may extend this period if there is a justifiable reason ('for cause'). This provision is designed to help family farmers and fishermen reorganize their finances without losing their livelihood.
