United States: Chapter 12 Family Farmer Cases In Missouri: A Look Inside The Numbers

Chapter 12 of the Bankruptcy Code, enacted in 1987, provides relief to family farmers facing financial distress. Chapter 12 is available exclusively for family farmers that want to reorganize their financial affairs. While Chapter 12 was very popular in the first few years after its enactment, the number of Chapter 12 cases decreased after the farm economy stabilized. Nevertheless, hundreds of Chapter 12 cases are still filed every year in the United States.

Many agriculture experts predict increased distress for farmers in the near term, so it is natural to speculate whether Chapter 12 will play an increased role in the future. In fact, Chapter 12 filings nationwide were about 28% higher in the first six months of 2016 than in the comparable period in 2015. With this increase in agricultural distress and the increase in Chapter 12 filings, it is a good time to examine how Chapter 12 has worked in practice in Missouri.

The methodology of this examination was simple. All Chapter 12 bankruptcy cases filed in Missouri between 2000 and 2015 were identified through online searches of the dockets for both the Eastern and Western districts. After adjusting for various anomalies, 126 unique Chapter 12 cases were filed in Missouri between 2000 and 2015. Ten of those cases are still pending and have been ignored for purposes of arriving at the percentages in Table 1.

Outcomes of Chapter 12 cases

There are four primary possible outcomes for a Chapter 12 case:

  1. Converted to Chapter 7 or dismissed before plan filed. If the Debtor fails to file a Plan, there are two possible dispositions of the case: (a) conversion of the case to one under Chapter 7, or (b) dismissal of the case. Because of the Bankruptcy Code's longstanding hostility to involuntary liquidations of farmers, the Court can convert a Chapter 12 case only if the Debtor consents or the Debtor commits fraud in connection with the case. A total of 20 cases were either converted to Chapter 7 or dismissed before a Plan was filed.
  2. Case converted or dismissed after a plan was filed but before confirmation. This occurs when the debtor files a Plan, but is unable to obtain confirmation of the Plan. If the Debtor does not voluntarily convert its case to Chapter 7, the Court will eventually dismiss the case. Nine cases were dismissed or converted after a Plan was filed but before confirmation.
  3. Plan confirmed but no Chapter 12 discharge. This occurs when a Plan is confirmed, but no discharge is entered. Unlike Chapter 11, where the discharge can be obtained on the Effective Date of the Plan, in Chapter 12 the discharge is normally not entered until all Plan payments have been made. Many Chapter 12 debtors are able to confirm a Plan but thereafter default in making the Plan payments. These cases are typically either dismissed at some point after the default or the Debtor voluntarily converts the case to Chapter 7. After subtracting, the ten cases that are still pending, a total of 32 cases fall into this category.
  4. Plan confirmed and discharge entered. This is the most desired outcome for a Chapter 12 debtor. Not only does this Chapter 12 debtor obtain a confirmed Plan, the debtor also completes payments under the confirmed Plan and receives a discharge. (It appears that no hardship discharges were approved in Missouri during the relevant period.) All data in this article excludes cases that resulted in a hardship discharge under Section 1228(b), which are very rare. A total of 55 cases fall into this category

There are several interesting conclusions that can be drawn from the data in Table 1. First, nearly one-half of Missouri debtors achieved the ultimate objective in a Chapter 12 case, i.e. confirmation of a Plan, followed by completion of Plan payments and receipt of a Chapter 12 discharge. The remaining Chapter 12 cases end in either conversion to a Chapter 7 liquidation or dismissal.

Second, most Chapter 12 debtors are able to at least file a repayment Plan. 83% of all Chapter 12 debtors propose a repayment Plan at some point in their cases. And over 91% of all debtors that are able to file a Plan eventually convince a court to confirm it.

Third, many debtors fail to perform under their confirmed Plans. Of the 87 closed cases where a Plan was confirmed, no Chapter 12 discharge was entered in 32 of them. Therefore, about 36.7% of all confirmed Plans result in a post-confirmation default that precludes entry of a discharge.

Another interesting metric is comparing Missouri Chapter 12 outcomes with Chapter 12 outcomes nationwide. While there is no readily available data for nationwide Chapter 12 outcomes for 2000 through 2015, the Executive Office of the United States Trustee (EOUST) does maintain a database that shows cases outcomes for 1,809 Chapter 12 cases that were closed nationwide in fiscal years 2009-2014. See generally, Flynn, Chapter 12: Outcomes for Family Farmers and Fishermen, American Bankruptcy Institute Journal (September 2015) at p. 36.

Therefore, Missouri debtors have on the average a slightly more positive set of outcomes than Chapter 12 debtors nationwide. Missouri debtors are slightly more likely to receive a Chapter 12 discharge, and they are slightly less likely to have their Chapter 12 cases dismissed or converted. Successful Missouri cases, however, proceed at a slightly slower pace than their counterparts nationwide.

Timing considerations

Under Section 1221, a Chapter 12 debtor must file a Plan within 90 days after the petition date. The court can extend the filing period if it concludes that the need for an extension is "attributable to circumstances for which the debtor should not justly be held accountable." For the most part, the Missouri Chapter 12 debtors filed their Plans on a timely basis as the median number of elapsed days between the petition date and the date of the first Plan was 92 days.

However, the data suggest that many farmers struggle to obtain confirmation of their Plans. The median number of days between the petition date and entry of a confirmation order is 196 days, which means that it typically takes over 100 days after filing a Plan to obtain confirmation. This is probably because most Chapter 12 debtors have to amend their original Plan in order to secure confirmation. In fact, of those Chapter 12 debtors that obtain a confirmed Plan, 70.6% of them file at least one amended Plan before confirmation. In fact, slightly over 30% of all debtors with confirmed Plans file at least three Plans before confirmation.


  1. While Chapter 12 is far from a cure-all, it does work a significant percentage of the time as evidenced by the 47.4% of Chapter 12 debtors that obtain a discharge.
  2. Chapter 12's liberal rules governing amendments, both pre- and post-confirmation, are frequently used. Farmers clearly need flexibility in proposing their Plans and pursuing confirmation. A debtor's need to file an amended Plan is not necessarily an omen that the Plan will ultimately fail. In many instances, a debtor was eventually be able to obtain a discharge in spite of filing one or more post-confirmation amendments. Both debtors and lenders should recognize at the outset that a substantial number of confirmed Plans require post-confirmation modification.
  3. Missouri's experience with Chapter 12 is very close to the nation as a whole.
  4. The influence of Chapter 12 is probably much more significant than the modest number of cases indicate. The results in Chapter 12 cases provide a spectrum of potential outcomes that influence both lenders and borrowers in out-of-court workout discussions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.