Farmers hold a special place in the heart of the US economy. However, this year has been especially tough on farmers. The Federal Reserve recently announced that farm bankruptcies in Minnesota and the Upper Mid-West are on the rise. Meanwhile, Chapter 12 bankruptcy protection cases in Texas dropped for farmers.
Changes in Chapter 12 Bankruptcies
According to the US Bankruptcy Courts and Farm Bureau Calculations, Upper Mid-West states such as Wisconsin, Montana, North Dakota and South Dakota rose 45% in a period of 12 months spanning June 2017 to June 2018. Minnesota was especially active in bankruptcy protection filings, nearly doubling the previous year’s numbers. Bankruptcies in Texas, along with Louisiana and Mississippi dropped by 24%, showing a downward trend when looking at the entire US farming economy as a whole.
Why Are Farmers Filing Bankruptcy?
Bankruptcy attorneys and experts are blaming the spike in Chapter 12 bankruptcy filings in some parts of the country on depressed corn and dairy prices. Additionally, China closing their markets to US soybean imports are also exacerbating debt problems for farmers. In response, the President has recently announced $12 billion in farm aid to help impacted agricultural businesses.
Farming operations that included beef faired far better than farms that produced crops solely, but financial averages for many farms witnessed a decline, meaning that the average farm debt has risen for many farmers.
Texas Bankruptcies for Farmers
Farmers in Texas have access to a particular type of bankruptcy referred to as Chapter 12. In Chapter 12 bankruptcies, farmers who raise crops, cattle, or fish can reorganize the money that they owe through their farming business and repay the debt over a period of time, in some cases as many as five years. If you own a farm and are experience crippling debt, contact a Dallas bankruptcy attorney who can help you navigate filing for Chapter 12 bankruptcy.