Solutions for Farmers with Financial Troubles
Nebraska farmland spreads out in beige-grey sheets all around us. Cows graze in the winter cornfields. Grain elevators pepper the vistas like statuesque farmers awaiting a harvest. The terrain looks like it is bracing for a dark stormy winter with gusts of winds approaching 50 mph.
On our trip from Omaha to Davenport, Nebraska, my father-in-law Howard Duncan and I discuss his growing up on a wheat farm in Southern Kansas. He knows what it means to put in a 14-hour day bailing hay and working the field. He knows what it means to have your livelihood at the whims of a hail storm or a lightning fire.
As bankruptcy attorneys, we have been discussing the financial distress that Nebraska farmers and rural residents are experiencing. During the first quarter of this year, Nebraska had the slowest growing economy out of any state. The leading cause was our distressed agribusiness sector. Corn prices are low. Farm cash rental rates are relatively high. Farmers have run out of working capital and borrowed operating cash against their land, which is a recipe for disaster.
As we sit in the Davenport Community Center, you get the sense that the farmers and bankers are holding their breath, bracing for tough times ahead. It is not a matter of if a crash will happen but when it will happen. One of the speakers comments that we are not at the breaking point…yet. The two farmers at our table audibly laugh, echoing the word “yet,” almost acknowledging to each other that they are at or past the breaking point.
Like so many other rural communities, the grocery store closed within the last year or two. Businesses in town have a tough time keeping their doors open. Money flows out of the community. People are holding on. In many rural Nebraska communities, there is limited or no access to an attorney to advise or assist when financial distress rears its ugly head.
Whether you are a rancher, farmer, or person living in a rural community, we are here to help you.
When it comes to dealing with financial troubles there are both bankruptcy and non-bankruptcy options. The Chapter 12 bankruptcy is specifically designed to help the family farmer deal with financial issues pertaining to their farm. In a Chapter 12 bankruptcy, the bankruptcy “automatic stay” protects the farmer from creditors, allowing them time to propose a plan to reorganize and repay their debt. In addition to a Chapter 12 farm bankruptcy, you may be able to file a Chapter 7 or Chapter 13 to deal with personal debt. Our attorneys have been successful in restructuring or reorganizing debt by negotiating or working with your lender where we use bankruptcy as a safety net.