The Chapter 12 “Cramdown”: Leveling the Lender's Playing Field.
This past week Congress was actually able to agree on something and the Family Farmer Relief Act of 2019 was passed. The Act serves to raise the current debt limit for Chapter 12 from 4.2 million to 10 million. Some have bemoaned this as only helping “big farms’, whatever that is, but in an era where a combine can approach a half million dollars, many smaller or medium sized farms found themselves up against the previous debt limit. Without the ability to utilize Chapter 12, instead of restructuring, the famer is generally liquidating. In helping many farm clients over the past year who have been experiencing financial difficulties, I am simply amazed at the inability of some lending institutions to work with the farmer who is experiencing financial difficulties. Don’t get me wrong, some lenders have been very good to work with and are open to forbearance agreements, debt reconstruction, and other measures that keep the fa