Should I Choose a Chapter 11 or 12 Bankruptcy?
An overview of these filings and reorganizations for Florida businesses
By S.M. Oliva | Last updated on January 10, 2023Use these links to jump to different sections:

Chapter 12
As noted above, Chapter 12 is expressly designed for family farmers and family fishermen. The Bankruptcy Code actually contains a number of criteria that must be met. Both individuals (and their spouses) and corporations may qualify for Chapter 12, although the standards are slightly different. For individuals and married couples, the qualifications include the following:- They must be engaged in a farming or commercial fishing operation.
- Their total debts from the operation cannot exceed a certain threshold, which is currently $4,153,150 for farms, or $1,924,550 for commercial fishing.
- At least 50 percent of their total debts–excluding any debt related to the individual or couple’s home–must come from the farming operation; or in the case of commercial fishing, at least 80 percent of their total debts.
- At least 50 percent of the individual or couple’s gross income must come from the farm for the previous three tax years, or for commercial fishing the previous tax year.
Chapter 11
A Chapter 11 filing is considered a “reorganization” of a business, which may include a family farm or commercial fishing operation owned by an individual. Unlike Chapter 12, there are no debt limits for a Chapter 11 filing. Nor does a family farm or commercial fishing operation need to meet the other income qualifications listed above. Within 120 days of a Chapter 11 filing, the debtor has the exclusive right to file a reorganization plan with the bankruptcy court. This type of reorganization is more extensive than a Chapter 12 repayment plan. It typically involves downsizing or restructuring the debtor’s business operations. Creditors also play a greater role in a Chapter 11 bankruptcy. Certain creditors may be entitled to vote on the debtor’s reorganization plan before it is approved by the court. And after the debtor’s exclusivity window expires, the creditors may actually file their own competing reorganization plan. Overall, Chapter 11 bankruptcy is often more expensive and time-consuming than a Chapter 12 bankruptcy. Moffa notes that, even for a small case, it can be a minimum of approximately $10,000. This is why it is important to consult with an experienced Florida bankruptcy attorney before proceeding with either option. For For general information on bankruptcy law, bankruptcy lawyers, the bankruptcy process, bankruptcy filing, liquidation, foreclosures, liens, Chapter 13 bankruptcy, Chapter 7 bankruptcy and other types of bankruptcy, see our bankruptcy overview.What do I do next?
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