Market News & Headlines >> Congress Passes Farm Bankruptcy Bill
The U.S. Senate late last week passed legislation that will make it easier for more farmers with larger amounts of debt to file for bankruptcy protection.
The bipartisan bill - called the Family Farmer Relief Act of 2019 – would allow producers filing for Chapter 12 bankruptcy to have as much as $10 million debt compared with the current ceiling of $4.15 million.
The legislation was previously passed by the U.S. House of Representatives and is now only needs President Trump’s signature to become law.
Without this change to the law, farmers whose debts exceed $4.15 million are forced to use Chapter 11 bankruptcy protection, which is more costly and onerous, bankruptcy experts told Reuters News Service.
The bill aims to help the farm community avoid "mass liquidations and further consolidation in the largest sectors of the industry," said U.S. Senator Chuck Grassley, the Iowa Republican who introduced the legislation in the Senate in December.
Bankruptcy lawyers and farm groups have long advocated for this change, but the American Banking Association opposed the legislation, saying it would result in tighter credit terms for many farms.