What is the Chapter 12 debt limit?

The ceiling lives in the Bankruptcy Code's definitions of "family farmer" and "family fisherman" at 11 U.S.C. § 101, alongside conditions about where the debt comes from and how much income the operation produces. We do not publish a verified current dollar figure for that ceiling on this page. Because it has been adjusted over time, checking the current statutory text or asking a local bankruptcy attorney is the reliable route.

Can a commercial fisherman file under Chapter 12?

Yes. Chapter 12 is available to a family fisherman with regular annual income as well as a family farmer, and the chapter's text reflects that throughout. Section 1203 describes the debtor operating the farm or commercial fishing operation, and § 1206 covers property used to carry out a commercial fishing operation, including a commercial fishing vessel. The definitions that decide eligibility are in 11 U.S.C. § 101.

Does a trustee take over the farm in Chapter 12?

Generally no. A trustee is appointed in a Chapter 12 case, but the debtor is treated as a debtor in possession and continues to control assets and conduct operations (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements). Under 11 U.S.C. § 1203, the debtor holds a Chapter 11 trustee's rights, powers and duties, subject to limitations the court may prescribe, including operating the farm or commercial fishing operation.

How is Chapter 12 different from Chapter 13?

Both are repayment-plan chapters, but Chapter 12 is written around a farming or fishing operation. The Chapter 12 debtor generally holds a Chapter 11 trustee's powers and keeps operating the business (11 U.S.C. § 1203), and the chapter carries § 1206 sales free of third-party interests and § 1232 treatment of certain governmental claims from disposing of farm property. Chapter 13 has no equivalent to either.

Does a Chapter 12 filing affect someone who cosigned with me?

Chapter 12 contains a codebtor stay. Under 11 U.S.C. § 1201, after the order for relief a creditor generally may not act or continue a civil action to collect a consumer debt of the debtor from an individual who is liable on that debt with the debtor or who secured it, subject to exceptions in the section. A creditor can ask the court for relief from that stay.

What happens to taxes if the plan requires selling farm property?

Section 1232 addresses that problem directly. An unsecured claim of a governmental unit arising from the sale, transfer, exchange or other disposition of property used in the debtor's farming operation is treated as an unsecured claim arising before the petition date, is not entitled to priority under § 507, must be provided for under the plan, and is discharged in accordance with § 1228.

What does the court expect me to file and report?

Beyond the petition and schedules, districts add operating duties. Some require a new bank account in the name of the debtor as "Chapter 12 Debtor" and monthly cash receipts and disbursements statements filed after each month (E.D. Wash. LBR 2082-1). Others require a liquidation analysis and a feasibility analysis attached to the plan, plus a summary of operations served on the trustee before the meeting of creditors (S.C. LBR 2082-1).

Fundamentals

Chapter 12 Bankruptcy for Family Farmers and Family Fishermen

Chapter 12 is the bankruptcy chapter written for family farmers and family fishermen with regular annual income. The debtor usually stays in possession, keeps operating the farm or fishing business, and repays creditors through a court-confirmed plan. The Bankruptcy Code defines who counts as a family farmer or family fisherman in 11 U.S.C. § 101.

Key points

Chapter 12 is a reorganization chapter for family farmers and family fishermen with regular annual income, not a liquidation chapter.
A Chapter 12 debtor is generally a debtor in possession who continues operating the farm or commercial fishing business (11 U.S.C. § 1203).
A trustee is appointed in every Chapter 12 case, but the debtor normally keeps control of the assets and the operation.
Chapter 12 carries tools no other consumer chapter has, including sales of farmland, farm equipment or commercial fishing property free of third-party interests (11 U.S.C. § 1206).
Eligibility turns on definitions in 11 U.S.C. § 101 that include income and debt tests; we do not publish a verified current dollar ceiling on this page.

If your income comes from farming or commercial fishing, the chapter most people talk about may not be the one written for you. Chapter 12 exists because a farm or a fishing boat is both a household's home and its business, and because seasonal income does not fit a chapter built around a steady paycheck. This page explains what Chapter 12 is, how a case runs, and where it differs from Chapters 7 and 13.

What is Chapter 12, exactly?

Chapter 12 is a reorganization chapter of the Bankruptcy Code available to a family farmer or family fisherman with regular annual income, structured so the operation can keep running while debts are restructured through a plan. Official court guidance describes it as available to that debtor while preserving the rights of farm lenders, and notes that the family farmer may be an individual, a corporation, or a partnership (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements). The Bankruptcy Code's definitions section, 11 U.S.C. § 101, is where the terms "family farmer" and "family fisherman" are defined, and those definitions carry the income and debt conditions that decide who may use the chapter. Chapter 12 is not a liquidation. Property is not sold off to pay creditors as a matter of course; instead, future earnings from the farming or fishing operation are committed to a court-confirmed plan, and the operation continues while that plan is performed.

Why does Chapter 12 matter in a bankruptcy case?

It matters because the general chapters were not drafted with a crop cycle or a fishing season in mind. Two features stand out. First, the debtor in a Chapter 12 case generally has the rights, powers, duties and functions of a Chapter 11 trustee, including operating the debtor's farm or commercial fishing operation (11 U.S.C. § 1203). Courts describe these debtors as debtors in possession: a trustee is appointed, but the debtor continues to control assets and conduct operations (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements). Second, Chapter 12 contains sale and tax provisions no other consumer chapter has. Section 1206 permits sales of farmland, farm equipment, or property used to carry out a commercial fishing operation free and clear of third-party interests, with those interests attaching to the sale proceeds. Section 1232 changes how certain government claims arising from selling farm property are treated in the case.

How does a Chapter 12 case work?

A case starts with a voluntary petition and the usual schedules of property, creditors, income and expenses, filed with the bankruptcy court (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements). A trustee is appointed, the debtor keeps operating, and the debtor proposes a plan. Under 11 U.S.C. § 1222 the plan must submit enough future earnings or income to the trustee's supervision to carry out the plan, must provide full payment in deferred cash payments of priority claims unless a holder agrees otherwise, and must treat claims within a class alike. The plan may modify the rights of secured and unsecured claim holders, cure defaults, and provide for sales of property. Districts add reporting duties: some require a separate "Chapter 12 Debtor" bank account and monthly cash receipts and disbursements statements (E.D. Wash. LBR 2082-1), and others require a liquidation analysis and a feasibility analysis attached to the plan (S.C. LBR 2082-1).

File the petition, schedules, statement of financial affairs and creditor matrix with the bankruptcy court.
A trustee is appointed; the debtor generally remains in possession and keeps operating (11 U.S.C. § 1203).
The debtor files a plan meeting the contents requirements of 11 U.S.C. § 1222.
Local rules commonly require operating reports, a summary of operations, and tax returns to the trustee (E.D. Wash. LBR 2082-1; S.C. LBR 2082-1).

What are the main limits and exceptions?

The first limit is eligibility. Chapter 12 is confined to a family farmer or family fisherman with regular annual income, and those terms are defined in 11 U.S.C. § 101 with conditions that include debt and income tests. A verified current dollar ceiling is not published on this page, and we would rather say that plainly than print a number we cannot trace to a source. The second limit is procedural. A Chapter 12 case may not be filed pro se where the debtor is a corporation or partnership, including a sole-member LLC (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements). That same guidance directs filers to the court's fee schedule and notes the Chapter 12 filing fee may not be paid in installments. Third, the § 1206 sale power is not a way to strip a lien: the proceeds of such a sale remain subject to the interest that was cleared from the property.

How is Chapter 12 different from Chapter 7 and Chapter 13?

Chapter 7 is a liquidation chapter, Chapter 13 is a repayment chapter for individuals with regular income, and Chapter 12 is a repayment chapter built specifically around a farming or commercial fishing operation. The clearest structural difference is control: in Chapter 12 the debtor generally holds the rights and powers of a Chapter 11 trustee and keeps operating the business (11 U.S.C. § 1203). Chapter 12 also carries the § 1206 sale power and the § 1232 treatment of certain governmental claims arising from disposing of farm property, neither of which exists in Chapter 13. A judicial comparison of Chapters 11, 12 and 13 notes that § 1206 applies only in Chapter 12 and modifies § 363(f) so a family farmer or fisherman can sell assets not needed for the reorganization without secured-creditor consent, subject to court approval (U.S. Bankr. Ct. S.D. Ala., SBRA guide (Judge Paul Bonapfel, 338 pp.) (updated June 2022)).

Chapter 12 compared with the two chapters consumers hear about most
	Chapter 7	Chapter 13	Chapter 12
Basic shape	Liquidation	Repayment plan for an individual with regular income	Repayment plan for a family farmer or family fisherman with regular annual income
Who may be the debtor	Individuals and entities, per the Code's eligibility rules	Individuals, per the Code's eligibility rules	May be an individual, a corporation, or a partnership (Bankr. W.D. Ky. guidance)
Who runs the business	A trustee administers the estate	The individual debtor	Debtor in possession with a Chapter 11 trustee's powers (11 U.S.C. § 1203)
Special sale power	None of this kind	None of this kind	Sales of farmland, farm equipment or commercial fishing property free of interests (11 U.S.C. § 1206)
Statutory filing fee	$245 (28 U.S.C. § 1930(a)(1)(A), (f)(1))	$235 (28 U.S.C. § 1930(a)(1)(B))	Set by the court's fee schedule; may not be paid in installments (Bankr. W.D. Ky. guidance)

What do people most commonly get wrong about Chapter 12?

The most common assumption is that Chapter 12 is only for large agricultural operations. The chapter speaks in terms of family farmers and family fishermen, and courts describe it as preserving farm lenders' rights while letting the operation continue, not as a chapter reserved for a particular acreage. The second is that fishermen are an afterthought. The Code text refers throughout to operating the debtor's farm or commercial fishing operation, and § 1206 expressly covers property used to carry out a commercial fishing operation, including a commercial fishing vessel. A third mistake is treating the appointment of a trustee as a loss of the farm: a trustee is appointed, but the debtor normally continues to control assets and conduct operations. A fourth is assuming an entity can file without counsel; a corporation or partnership, including a sole-member LLC, may not file a Chapter 12 case pro se in some districts (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements).

Frequently asked questions

What is the Chapter 12 debt limit?: The ceiling lives in the Bankruptcy Code's definitions of "family farmer" and "family fisherman" at 11 U.S.C. § 101, alongside conditions about where the debt comes from and how much income the operation produces. We do not publish a verified current dollar figure for that ceiling on this page. Because it has been adjusted over time, checking the current statutory text or asking a local bankruptcy attorney is the reliable route.
Can a commercial fisherman file under Chapter 12?: Yes. Chapter 12 is available to a family fisherman with regular annual income as well as a family farmer, and the chapter's text reflects that throughout. Section 1203 describes the debtor operating the farm or commercial fishing operation, and § 1206 covers property used to carry out a commercial fishing operation, including a commercial fishing vessel. The definitions that decide eligibility are in 11 U.S.C. § 101.
Does a trustee take over the farm in Chapter 12?: Generally no. A trustee is appointed in a Chapter 12 case, but the debtor is treated as a debtor in possession and continues to control assets and conduct operations (Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements). Under 11 U.S.C. § 1203, the debtor holds a Chapter 11 trustee's rights, powers and duties, subject to limitations the court may prescribe, including operating the farm or commercial fishing operation.
How is Chapter 12 different from Chapter 13?: Both are repayment-plan chapters, but Chapter 12 is written around a farming or fishing operation. The Chapter 12 debtor generally holds a Chapter 11 trustee's powers and keeps operating the business (11 U.S.C. § 1203), and the chapter carries § 1206 sales free of third-party interests and § 1232 treatment of certain governmental claims from disposing of farm property. Chapter 13 has no equivalent to either.
Does a Chapter 12 filing affect someone who cosigned with me?: Chapter 12 contains a codebtor stay. Under 11 U.S.C. § 1201, after the order for relief a creditor generally may not act or continue a civil action to collect a consumer debt of the debtor from an individual who is liable on that debt with the debtor or who secured it, subject to exceptions in the section. A creditor can ask the court for relief from that stay.
What happens to taxes if the plan requires selling farm property?: Section 1232 addresses that problem directly. An unsecured claim of a governmental unit arising from the sale, transfer, exchange or other disposition of property used in the debtor's farming operation is treated as an unsecured claim arising before the petition date, is not entitled to priority under § 507, must be provided for under the plan, and is discharged in accordance with § 1228.
What does the court expect me to file and report?: Beyond the petition and schedules, districts add operating duties. Some require a new bank account in the name of the debtor as "Chapter 12 Debtor" and monthly cash receipts and disbursements statements filed after each month (E.D. Wash. LBR 2082-1). Others require a liquidation analysis and a feasibility analysis attached to the plan, plus a summary of operations served on the trustee before the meeting of creditors (S.C. LBR 2082-1).

Sources

11 U.S.C. § 101 — Definitions · official source
11 U.S.C. § 1201 — Stay of action against codebtor
11 U.S.C. § 1203 — Rights and powers of debtor
11 U.S.C. § 1206 — Sales free of interests
11 U.S.C. § 1222 — Contents of plan
11 U.S.C. § 1232 — Claim by a governmental unit based on the disposition of property used in a farming operation
Bankr. W.D. Ky. official guidance — Chapter 12 Filing Requirements
E.D. Wash. LBR 2082-1 — Chapter 12 — General
S.C. LBR 2082-1 — Chapter 12 — General
U.S. Bankr. Ct. S.D. Ala., SBRA guide (Judge Paul Bonapfel, 338 pp.) (updated June 2022)
28 U.S.C. § 1930(a)(1)(A), (f)(1)
28 U.S.C. § 1930(a)(1)(B)

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Sources verified July 27, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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