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Veteran Advisor

Debt Limit Raised

On Friday, August 23, 2019, the President signed into law:

H.R. 2336, the “Family Farmer Relief Act of 2019,” which increases the debt limit used to determine whether a family farmer is eligible for relief under chapter 12 of the Bankruptcy Code;

 

What say you?

 

Mike

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6 Replies
Honored Advisor

Re: Debt Limit Raised

Don`t like it.  Don`t like raisin $4 million debt to $12 million, maybe those with a $12 million debt and in trouble wouldn`t be too hurt to work a real job for a few years.  But, you know what this is, don`t you?  It`s a bank bailout, make everyone have to share in the pain of a write-down of a highroller.

Maybe I shouldn`t complain, it`ll hold up land values for all of us, but it frosts me that a chosen few figured out "alchemy".

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Frequent Contributor

Re: Debt Limit Raised

That's some pretty funny stuff there.

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Frequent Contributor

Re: Debt Limit Raised

Objectively, should not be popular with the vast majority of people who are farming. It is a competitive game.

Although neither should an estate tax exemption of $10M.

But if you're an heir who is looking at the NW total on his/her balance sheet it is all good.

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Frequent Contributor

Re: Debt Limit Raised

I do still feel for the many friends back in the 80s who stood at parade rest for the court martial while they blew taps.

Later found out they didn't really have to.

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Honored Advisor

Re: Debt Limit Raised

The way I feel about it, you should be 110% honest with your lender, if you feel you have to lie "a little" to get an operating note, you are on the road to perdition already.   And that was the case for the golden boys in the early 1980`s they had $40,000 feed bills at the elevator, all kinds of fertilizer bills at every supplier that would extend them credit.  The honest man sat down with his banker and laid it all out and probably came to the conclusion in 1984 that the hole was impossible and only getting deeper with 18% interest rates, well, he had a farm sale, his 4020 brought $4,000 and his farm brought $1200/acre, but he paid everyoine off before it got deeper and put mainstreet businesses out of business.

Those that lied, cheated and stole until 1987 got an elevator ride out of their deep hole and promptly bought some of that $1200/acre land before it went up and of course remodeled or built a new house with their newly acquired, ill gotten gains.  All thanks to the chapter 12 and debt write offs. Now history will perhaps rhyme with their sons and grandsons getting 36 row planters and commercial capacity bin sites debts written off.

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Senior Contributor

Re: Debt Limit Raised

yep Ba, and that $1200 was actually lowered to $800 for land they owed on, as the Farm Credit services deemed it would take about a third of the value to foreclose on them and wait out the two year redemption period.

So any big wheel in the 80's came out of the decade with an average land debt of $800 or less. Anyone that tells you differently is like the pale skin blue eyed lady speaking with forked tongue.

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