With agricultural lenders fearing a tidal wave of farm bankruptcies as soon as this spring, lawyers in the Midwest say they want Sen. Chuck Grassley (R-Iowa) to raise the debt limit for so-called "family farmer" bankruptcies, Reuters reported yesterday. Farmers in states like Illinois, Indiana and Iowa are scrambling to secure lending for the 2016 growing season at a time when prices for their corn have halved from three years ago. As they seek restructuring advice, many are told their debts surpass the $4 million limit for a chapter 12 family farm bankruptcy, said at least five lawyers who represent either debtors or creditors. They say the $4 million cap is out of touch with most farms' current operating size, often thousands of acres of land paid for by expensive leases and worked using tractors that can cost more than $250,000. "The debt limit for chapter 12 bankruptcies should be raised to at least $10 million," said Joseph Peiffer, a bankruptcy attorney in Cedar Rapids, Iowa. Without a new limit, farmers would be forced into a more costly chapter 11 filing.
