Under the Plan different types of claims are treated differently.It must provide for full payment of all priority claims, unless a priority creditor agrees to different treatment of the claim or, in the case of a domestic support obligation, unless the debtor contributes all “disposable income” to a five-year plan.This overview of Chapter 12 Bankruptcy is written to provide an introduction to the basic Chapter 12 process, highlighting some of the issues that distinguish it from other types of bankruptcy and explaining how it may be useful to family farmers and family fisherman who are experiencing financial distress. There are many complex issues that extend far beyond the scope of this short overview.
While Chapter 11 provides a good forum for large investor-owned corporations to work through complex financial difficulties, it is costly, cumbersome, and overwhelming for an unsophisticated small business.
The trustee then distribute the funds to creditors according to the terms of the plan, which usually offers creditors less than full payment on their claims.
A Chapter 12 plan usually lasts three to five years.
Under the Bankruptcy Reform Act of 1978, there are several types of bankruptcy protection available, which either involve rearranging the debtor's financial affairs to allow him to continue operating his business or the liquidation of the debtor's asset.
CHAPTER 11 Bankruptcy Under Chapter 11, only the debtor may submit a plan of reorganization within 120 days of the initiation of the bankruptcy case.
Normally the fees should be paid to the clerk of the court upon filing.