Chapter 12 Farm Bankruptcies Rising, but Still Lower than 20 Year Average
We see an uptick in Chapter 12 farm bankruptcies, but the overall number is still below "average"
Because of the 1980’s farm crisis, Congress created a new Chapter in the Bankruptcy code specifically for farmers - Chapter 12. It was introduced in 1986 as a temporary measure but then made permanent in 2005. It allows farmers to retain their farm assets but reorganize their debt structure to hopefully allow them to keep the family farm.
Here is a chart that shows the number of Chapter 12 filings since 2007:
As you can see, the average over the last approximately 20 years is in excess of 400 Chapter 12 filings on an annual basis. For the last three plus years the average number has been lower than 300 and bottomed out at about 150 in 2022-2024 time period.
However, we are seeing an increase to slightly less than 300 in 2025 and perhaps this trend will continue in 2026.
We will keep you posted.