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Farm bankruptcies rise in 2025, ag lawyer urges early monetary critiques for 2026
An ag lawyer says as farm bankruptcies enhance throughout the Midwest, proactive monetary critiques could possibly be a essential danger administration technique.
Joe Peiffer with Ag and Enterprise Authorized Methods says reviewing phrases and monitoring bills may assist farmers keep away from mortgage defaults.
“If issues aren’t going to work in a restructuring mode, they may have to have a look at potential liquidation of property,” he says. “You could possibly have depreciation recapture on the sale of kit. However in case you’re coping with the sale of a farm, you’re going to have probably need to take care of long-term capital beneficial properties.”
A current report from the American Farm Bureau Federation confirmed a 46 % enhance in Chapter 12 bankruptcies from 2024.
However, Peiffer tells Brownfield it may be used as a instrument to assist restructure debt.
“There are provisions in Chapter 12 that permit a farmer to keep away from paying the revenue taxes that may come up after they need to promote farm property,” he says. “Chapter 12 could possibly be the reply that can assist you get a contemporary begin.”
Peiffer says early planning and often monitoring stability sheets may assist farmers higher put together for the upcoming crop 12 months.
AUDIO: Joe Peiffer, Ag and Enterprise Authorized Methods
