Menu

Legislation extending Chapter 12 bankruptcy protection for farmers was sent to President Bush Aug. 1 and was expected to be signed into law, according to information from the American Farm Bureau Federation (AFBF).

The legislation passed the House in late June, and passed the Senate with no amendments July 31. The Family Farmer Bankruptcy Protection Act extends Chapter 12 provisions through Dec. 31. The effective date is retroactive to July 1.

Attempts are in the works to make Chapter 12 laws permanent, but that effort is being "held hostage" in the entire debate on bankruptcy reform, according to Mary Kay Thatcher, AFBF deputy director of public policy.

"There is absolutely no controversy about Chapter 12, … but to guarantee farm votes for other reforms," the permanent Chapter 12 legislation is being held hostage, Thatcher said.

About the extension, Thatcher said, "It’ll happen." The Chapter 12 laws are only about 15 years old, she said, and weren't made permanent to start with until lawmakers could determine their effectiveness.

"As long as it keeps getting extended every six months, nobody falls between the cracks," Thatcher said.

The president was expected to sign the current extension at press time.