As economic times continue to be uncertain, the impact is being felt by individuals in every walk of life. Farmers in Wisconsin have been battling the economic crunch over the last several years as they continue to distribute milk into a market that has become oversaturated, perhaps to the point of putting the people who supply it out of business. Farmers who are facing bankruptcy need to be informed about the options that they have going forward.
Numbers on the rise
Since the beginning of 2020, 36 farms in Wisconsin have filed for Chapter 12 bankruptcy protection, an alarming number when compared to the 57 farms that filed bankruptcy in all of 2019. This growing number of farm bankruptcies can largely be attributed to the shutdown of many food services, schools, sporting events and festivals. Those events typically make up 33% of the market for products that come from Wisconsin’s dairy farms.
Chapter 12 bankruptcy protection allows farms to restructure their finances in an attempt to avoid a court-ordered liquidation. While much of the news coverage of commercial bankruptcies focuses on Chapter 11 bankruptcy protection, that particular type is better for large corporations such as car manufacturers and airline companies. Chapter 12 is considered a more efficient and successful tool for small business that are facing financial hardships.
Farmers facing bankruptcy may want to contact an attorney who is well-versed in the bankruptcy laws in Wisconsin. An attorney may help their client by gathering information about their existing assets and debts and guiding them through the legal process of filing for bankruptcy protection. A bankruptcy attorney might be able to help their client avoid liquidation and continue running their business.