self employed farm ?'s

[yikes]

We are considering filing BK.WE have a small family farm and both work off the farm, we have some farm equipment(old,used total value under $20,000) crops planted for next year, and little to no equity on the farm.
Due to job loss and medical issue we now have $40,000 in CC- always make those payments on time until now. My Husband will be laid off next month and it is going to be very difficult to continue making all of our payments on time.
By selling off livestock and harvest time we do have at times small chunks that we can throw towards CC, we are able even with a layoff to pay our farm and non CC bills with alot of sacrifice.
My ?'s are:do we have to liquidate all farm equipment(we do list farm income on our taxes,after deductions the farm as a rules has a negative cash flow)
Could we hope for the best and settle CC bills over the next couple of years as we obtain small chunks of change with out being sued by CC .
We spoke to a lawyer who really just wanted to give us a very vague idea regarding BK and suggested we start out with getting an appraisel before he could really advise.
Thanks in advance

[325Falcon]

What state are you in? It really depends on your exemptions, I know my state allows some Farm exemptions regardless of value. IE: 2 cows, 2-oxen, 2-hogs, crops planted,4 tons of hay etc etc.

[yikes]

Thanks for that info. We are in Ohio

[HenriettaHen]

Not sure if a Chapter 12 BK applies to your situation, but it would be worth a look:

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter12.html

If you are very close to and considering bankruptcy NOW, then selling your remaining assets to pay CC debt may not actually solve your CC debt problem, but only delay the inevitable.

You'll need to pull together all the records for your farm and see how your annual farm income compares against your outside incomes.

I live on a farm, but my BK was personal. Farmers discuss BK as if it were the weather. Good luck on this one, let us know what happens with the numbers.

[yikes]

I would like to make this personal as far as the BK - I am not sure if I can, our taxes combine all incomes and expense. I looked into a CH12 and it seems similiar to a CH13(which the Lawyer seemed to dislike). I really hate to sell our equipment (junk that it is) It would keep us from farming which at this point is a huge part of our and our childrens lives even if it does not make us much if any profit.

[lrprn]

I really hate to sell our equipment (junk that it is) It would keep us from farming which at this point is a huge part of our and our childrens lives even if it does not make us much if any profit.

Here are the bankruptcy exemptions in Ohio (not a debtor-friendly state) - http://www.bankruptcyinformation.com/OH_exemp.htm

In the Personal Property section: "Animals, crops, books, musical instruments, appliances, household goods, furnishings, hunting & fishing equipment & firearms to $200 per item, $1500 total ($2000 if no homestead claimed)" Assuing you have a house you want to protect, then if your equipment comes in under $1500+$400 wild card for a total of $1900, you're fine. If the equipment is worth more than that, then it could be at risk depending on how sellable it is. Also your trustee might make you pay him/her the difference between the value of the equipment and the exemption in order to keep it (the more likely scenario).

Time to make free or low-cost intial consultation appointments with 3-4 experienced bankruptcy lawyers in your area. It's the best way to find out exactly where you stand and whether bankruptcy is the best long-term answer for your financial problems.Hope everything works out in your favor! Keep asking questions - we'll help you sort things out as best we can.

[HenriettaHen]

"It would keep us from farming which at this point is a huge part of our and our childrens lives even if it does not make us much if any profit."

Ah, the happy world of farming. Not much chance for a profit.

But that's not what we're looking at here.

You'll be comparing your farm income against your outside income - in order to find out if you qualify for Chap 12. If farming produces more than 50% of your total income, you may qualify. Don't subtract your expenses at this point, just compare incomes.

Now organize your expenses and find out if 50% or more of your expenses are related to farming.

Do you qualify?