Vernon owns a family run farming business.He earned $100,000 in the current financial year.He owes $70,000 that he cannot pay.This debt forms a part of his farm expenses to creditors,but he wants to keep the business running.Which type bankruptcy should Vernon file for?

Question

Quizplus · Accepted Answer

Vernon should file for Chapter 12 bankruptcy, which is designed specifically for family farmers and fishermen who have a regular annual income. It allows them to restructure their debts and keep their business running. Chapter 7 bankruptcy would require Vernon to liquidate his assets to pay off his debts, while Chapter 11 and Chapter 7 bankruptcy together may not be necessary or applicable for his situation. Chapter 7 and Chapter 12 bankruptcy may also not be necessary, as Chapter 12 is tailored specifically for his type of business.

Vernon Owns a Family Run Farming Business