fbpx
8833 South Redwood Road
Suite C
West Jordan, UT 84088

Call For Free Consultation

(801) 676-5506


Call Us

Can I Keep Animals and File Bankruptcy?

People who are considering bankruptcy often wonder whether they will be able to keep their property, and farmers are no exception. People who keep livestock and grow crops for a living are often worried that by filing for bankruptcy, they will end up putting themselves in a position where they will be forced to part with the very property that allows them to make a living.

Can I Keep Animals and File Bankruptcy

Individuals who keep livestock, professionally, as a side-business, or as a source of food may specifically have concerns about whether they will be able to keep their animals if they file. This depends on a number of factors, including the type of bankruptcy for which you file and whether you can claim your livestock as exempt.

Different Types of Bankruptcy have Different Outcomes

In a Chapter 7 bankruptcy, a debtor’s non-exempt assets are sold off and the proceeds are used to pay off creditors. As a result, any livestock that you owned that was non-exempt would likely be seized by the bankruptcy trustee. That being said, bankruptcy law provides exemptions under which you may be able to protect your animals.

For example, Ohio bankruptcy exemptions allow people to exempt up to $12,625 in personal property (not to exceed $600 in any one item), including animals that are held primarily for personal, family, or household use. Ohio Revised Code 2329.66. For information specific to Utah Bankruptcies, you need Utah bankruptcy attorneys or you can call our office for your free consultation.

If you are filing for Chapter 12 bankruptcy, however, things are much different. Chapter 12 is a type of reorganization bankruptcy that is only available to family farmers, fishermen, or ranchers. Under Chapter 12, you need to be able to establish that the majority of your debts are farming-related and that you make most of your money through your farming operation. Importantly, both businesses and individuals can file for Chapter 12, making it suitable for people who operate their farms as sole proprietors and those who have chosen to operate their farms through a business entity such as an LLC.

One of the main benefits of filing for a reorganization bankruptcy is that it allows a business to keep its assets, including livestock, while it is in bankruptcy. In addition, during the period of the bankruptcy, the filer is protected from any collection activity from creditors, including repossession or foreclosure.

Chapter 12 Bankruptcy Eliminates Barriers for Fisherman and Farmers

In a Chapter 12 bankruptcy, debtors propose a payment plan to the court that will last anywhere from three to five years. In most cases, the plan will last for three years unless the court approves a longer period for cause. If there are any claims for child support or alimony at issue, however, the plan must be for five years unless the plan proposes to pay 100% of these claims.

According to the US Courts website, Chapter 12 eliminates many of the barriers to relief that farmers would face under Chapter 11 or 13. For example, Chapter 12 is more streamlined and less complicated than Chapter 11 and it allows for higher debt limits than those found under Chapter 13.

Keep Your Animals in Bankruptcy

There are different requirements for individual or married couple filers and corporate or partnership filers under Chapter 12. The criteria for an individual or an individual and spouse are as follows:

  • The individual or husband and wife must be engaged in a farming operation or a commercial fishing operation.
  • The total debts (secured and unsecured) of the operation must not exceed $4,031,575 (if a farming operation) or $1,868,200 (if a commercial fishing operation).
  • If a family farmer, at least 50%, and if family fisherman, at least 80%, of the total debts that are fixed in amount (exclusive of debt for the debtor’s home) must be related to the farming or commercial fishing operation.
  • More than 50% of the gross income of the individual or the husband and wife for the preceding tax year (or, for family farmers only, for each of the 2nd and 3rd prior tax years) must have come from the farming or commercial fishing operation.

On the other hand, the criteria for a corporation or partnership are:

  • More than one-half the outstanding stock or equity in the corporation or partnership must be owned by one family or by one family and its relatives.
  • The family or the family and its relatives must conduct the farming or commercial fishing operation.
  • More than 80% of the value of the corporate or partnership assets must be related to the farming or fishing operation.
  • The total indebtedness of the corporation or partnership must not exceed $4,031,575 (if a farming operation) or $1,868,200 (if a commercial fishing operation).
  • At least 50% for a farming operation or 80% for a fishing operation of the corporation’s or partnership’s total debts which are fixed in amount (exclusive of debt for one home occupied by a shareholder) must be related to the farming or fishing operation.
  • If the corporation issues stock, the stock cannot be publicly traded.

Free Consultation with a Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


Recent Posts

Marriage Legal Help

Securities Lawyer Salt Lake City

Intellectual Property Litigation

Eminent Domain Lawyer

Different Types of Adoption

Where to File for Divorce

Share this Article

Michael Anderson

About the Author

People who want a lot of Bull go to a Butcher. People who want results navigating a complex legal field go to a Lawyer that they can trust. That’s where I come in. I am Michael Anderson, an Attorney in the Salt Lake area focusing on the needs of the Average Joe wanting a better life for him and his family. I’m the Lawyer you can trust. I grew up in Utah and love it here. I am a Father to three, a Husband to one, and an Entrepreneur. I understand the feelings of joy each of those roles bring, and I understand the feeling of disappointment, fear, and regret when things go wrong. I attended the University of Utah where I received a B.A. degree in 2010 and a J.D. in 2014. I have focused my practice in Wills, Trusts, Real Estate, and Business Law. I love the thrill of helping clients secure their future, leaving a real legacy to their children. Unfortunately when problems arise with families. I also practice Family Law, with a focus on keeping relationships between the soon to be Ex’s civil for the benefit of their children and allowing both to walk away quickly with their heads held high. Before you worry too much about losing everything that you have worked for, before you permit yourself to be bullied by your soon to be ex, before you shed one more tear in silence, call me. I’m the Lawyer you can trust.