It is similar to Chapter 13 in structure, but it offers additional benefits to farmers and fishermen in certain circumstances, beyond those available to ordinary wage earners.
For much of the history of bankruptcy law in the United States, there was no provision applicable specifically to farmers.
[1] However, many of these provisions were limited in scope, and ultimately required the voluntary cooperation of mortgagors and creditors.
[2] The modification of the bankruptcy code was intended as an emergency response to tightening agricultural credit in the early and mid-1980s, in the middle of a number of notable bank failures.
[1] Under chapter 12, a "family farmer" is defined as an individual who owns and is engaged in a faming operation (which includes farming, tillage of the soil, dairy, ranching, crops, poultry and/or livestock, and production of poultry and/or livestock) with aggregate debts of less than $10,000,000.
The corporation or partnership may also not have publicly traded stock in order to be defined as a family farmer.
It has also contributed to the stability and sustainability of these industries, ensuring the continued production of food and resources for the nation.