Recently released data from U.S. Courts show that farm bankruptcies increased 23% year-to-year. An American Farm Bureau Market Intel report shows a total of 627 filings took place during a 12-month period that ended in March of 2020. That makes five straight years of Chapter 12 bankruptcy increases, including a faster rate of filings since January of this year.
Wisconsin was the hardest hit with 78 filings during those same 12 months. Nebraska was next with 41 filings, and Iowa was third with 37. More than 50% of the Chapter 12 filings took place in the 13 states of the Midwest, followed by 19% in the Southeast.
“Each bankruptcy represents a farm in America struggling to survive or going under, which is both heartbreaking and alarming,” says Farm Bureau President Zippy Duvall. “Even more concerning, the difficulty in staying afloat is made worse by the pandemic and related shutdowns as farmers are left with fewer markets for their products and lower prices for the products they do sell.”
Currently, the bankruptcy filing increase isn’t related to the pandemic. That is certain to change as U.S. unemployment is projected to reach over 14% in the second and third quarters. A decline in off-farm income will hurt small and medium-sized farms that often rely on off-farm income to supplement their bottom lines. Farmers who are considering bankruptcy to help find debt relief and financial freedom may need the expertise of a bankruptcy attorney to help them walk through the process of filing for bankruptcy. A bankruptcy attorney can provide invaluable guidance throughout each stage of the process, from determining eligibility and choosing the right type of bankruptcy to filing paperwork and providing representation in court.
(From the National Association of Farm Broadcasters)