Bankruptcy Reform and Family Farmers: Correcting the Disposable Income Problem

Abstract:     
When the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was signed into law on April 20, 2005, it marked the conclusion of years of contentious debate. Much of the new law is directed toward consumer bankruptcy reform, and some of the most controversial aspects of it were debated at length by Congress and reported widely in the media. Buried within this massive law, however, are important changes that will significantly benefit family farmers who seek relief under Chapter 12 of the Bankruptcy Code. This article focuses on one of these changes - the prohibition on the retroactive assessment of disposable income. It is an amendment that has not been widely reported, yet it reverses over a decade of misinterpretation of the original Chapter 12 disposable income requirement. As is evidenced throughout the article, it is a significant change that promises to greatly enhance the likelihood of successful family farm reorganizations throughout the country.

Number of Pages in PDF File: 35

Keywords: farmer, bankruptcy, Chapter 12, disposable income

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