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Chapter 12 bankruptcy is debt relief for Massachusetts fishermen

The men and women of Massachusetts' fishing industry have seen some tough times in the last two decades due to foreign competition, overfishing, government regulations and now climate change. New England's cod fishery, for example, has declined from more than 1,200 boats in the 1980s to fewer than 100 today.

For those who make their living in the fishing industry, the capital investment in a boat, tackle and other equipment is significant. Financially struggling fishermen may end up facing mountains of debt. For small family fishermen, Chapter 12 bankruptcy may provide much needed debt relief.

To qualify for Chapter 12, the debtor must be a family fisherman or family farmer with a steady annual income. A family fisherman is defined in the Bankruptcy Code to include an individual, a married couple, a partnership or a corporation. To be eligible, the fishing operation must not have more than $1,500,000 in debt. Several other requirements must be met for eligibility as well.

Under Chapter 12, the debtor proposes a plan for repayment of some or all of the outstanding debt over a period of three to five years. In this respect, it is similar to Chapter 13 bankruptcy, although Chapter 12 is designed for business operations with higher amounts of debt than the wage earners for whom Chapter 13 was designed.

The fishing industry in Massachusetts has a long and proud history. But, that doesn't pay the bills or put food on the table for those who have been adversely affected by economic circumstances beyond their control. A Chapter 12 bankruptcy can provide a fresh start for hard-working Massachusetts residents.

Source: Findlaw.com, "Chapter 12: Basics and Eligibility," accessed Nov. 25, 2016

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