A recent report by CoBank
expects the farm economy to tighten again in 2018, and experts say that will
lead to more farmers filing Chapter 12 bankruptcy. DTN-The Progressive Farmer
reports that wheat and dairy producers are among the hardest hit, with an
increase in Chapter 12 bankruptcy filings in Kansas and Wisconsin, reaching the
highest level since 2012 last year. the number of Chapter 12 filings has been
on the rise since 2014 when there were about 380 filings. That number spiked to
just more than 500 in 2017. 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.
Meanwhile, the report points out that trade is “mission critical” for
agriculture in 2018. CoBank says: “U.S. agriculture has a lot at stake as these
negotiations unfold, and the rhetoric is likely to get worse before it gets
better.”
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