DTN writer Todd Neeley reported yesterday that, “More farmers likely will be filing Chapter 12 bankruptcy in 2018, as they continue to struggle with costs of production exceeding commodity prices, ag lender CoBank said in a new report.
“The CoBank report, ‘Forces that will shape the U.S. rural economy in 2018,’ said commodity price depression from surpluses around the world will make for another belt-tightening year for farmers who will continue to see working capital diminish.
“As a result, CoBank said, more producers are likely to turn to Chapter 12.”
Mr. Neeley also noted that, “The number of Chapter 12 filings has been on the rise since 2014, according to CoBank. There were about 380 filings in 2014. That number spiked to just more than 500 in 2017, according to the report.”
“Chapter 12 is designed specifically for farmers with regular annual income and allows them to stop debt collection and establish repayment plans of three to five years with creditors. The law also allows farmers to restructure debt without forming creditors’ committees,” the DTN article said.
