The Bankruptcy Code Chapter 12 Family Farmer

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The legal definition of a family farmer is unique to Chapter 12, as provided by 11 U.S.C. 1201, et seq. Primarily, the statutory definition is based on income earned, or more specifically, the source of earned income. Hobby ranches and recreational farms seldom produce enough income to sustain qualification, because the historical record of earnings, standing alone, must support repayment of all personal debts according to the terms of the plan. A Chapter 12 plan is unique in that payments may be timed annually to correspond with harvests.