Considering Chapter 12

The attorney must first decide if the debtor is eligible to file Chapter 12. Does the debtor have a farming operation?

101(18) "family farmer" means an individual and spouse engaged in farming operations whose aggregate debts do not exceed $3,544,525 and not less than 50% of whose aggregate noncontingent debts arise out of farm operations, for:

(i) the taxable year preceding; or

(ii) each of the 2nd and 3rd taxable year preceding the taxable year in which the case was filed.

101(19) "family farmer with regular annual income" means family farmer whose annual income is sufficiently stable and regular to enable such family farmer to make payments under a plan or reorganization under Chapter 12 of this title.

101(20) "farmer" is a person who received 80% of such person's gross income during the tax year immediately preceding the year the case was filed from farming operations owned by the debtor.

Questions: What if debts exceed $3,544,525 and no one objects to eligibility?

What does "gross income" mean?

Information needed by Debtor's attorney:

1. Tax returns
2. Farm plan proposals
3. notes, security instruments
4. lease agreements
5. purchase contracts
6. ASCS statements
7. legal descriptions, homestead designations
8. equipment list
9. appraisals (land and equipment); if you don't have them, arrange to get them.

What information does the Trustee want? - Now and at the Sec. 341 hearing:

Most Chapter 12 Trustees require the attorney to prepare a summary of operations, which describes the debtor's past and projected farm operations.