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Honored Advisor

Raising limits on Chapter 12

I see they`re fixin` to roop the the taxpayers again by raising chapter 12 bankruptcy limits from $4 million to $10 million, like they did 30 some years ago.  Chapter 12 was a "rock held over the head of the banker" to make writing off debt more palatable that closing out a bigger hardup farmer.  But $10 million or even $4 million debt????  I don`t call that helping some poor farmer in a Norman Rockwell painting, if you have $4 million in farm debt, in my book you are on your own Buddy Boy, now they want to raise it to $10 million??  Are Senators Grassley and Ernst smoking rope?  The "bipartisan" Democrats that want it, that`s understandable no surprise there, but our 2 normally sane senators on that bandwagon?

 

I`m sure it`ll be a ag bank bailout, though I thought banks were under new rules to not make stupid loans.  But the greedy clowns that have $4 million or proposed $10 million in debt, that`s in big business territory.  Yes, we did bailout GM, which wasn`t so much about bailing out the car manufacturer as it was putting taxpayers on the hook for their unsustainable legacy costs (pensions).    

 

And to keep the `cheap food` merry-go-round going they need to prop up the greedy clowns that have no lack of testosterone when it comes to expanding, even if it`s done stupidly.  

 

https://www.agriculture.com/news/business/agriculture-leads-bankruptcy-filings-report-shows

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4 Replies
Veteran Advisor

Re: Raising limits on Chapter 12

Did  you  think  for  a  minute,  the  whispers  behind  closed  doors,  would  be  anything  less  - ? 

 

Bankruptcy,  could  be,   somewhat  familiar  in  today's  Beltway  crowd -  maybe  ?            

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Honored Advisor

Re: Raising limits on Chapter 12

I`m a little surprised that at least the foundation of a farm debt bailout was being started this early ...and after the 1986 fiasco ag lenders were supposedly required to have more collateral so "it`d never happen again" and those of us farm borrowers do pay a little higher interest to pay for that bailout which essentially of our nextdoor competition that still bids $400 land rent.

 

I hear 2 opinions on it, one being "the government can`t afford to  bail `em out again" and the other being when gossiping about a 1986 bailout clown still going nuts buying land and machinery "He got bailed out last time and they`ll bail him out again...he has no shame" .  Looks like the setup will be going in the latter direction.

 

Chapter 12 was put in on an emergency in the 80`s, those that got in over their head with debt and were responsible probably got out or were sold out long before chapter 12 even came along. That Stamp Farms outfit with their 40,000 acres Top Producer of the year in 2012, see if he could`ve held out a few more years and could be gotten in on chapter 12 instead of chapter 11, he`d be the finalist for 2020 "Top Producer of the year" farming 80,000 acres.

 

The bankers must be privately telling these politicians that the tsunami of foreclosures is coming, bank examiners must`ve been asleep at the wheel again.   The heck of it is those of us that are sensible are the one`s that have a target on our backs, because literally if you owe the bank $100,000 and have trouble, YOU have a problem, if you owe the bank $10 million and can`t pay then the BANK is the one with the problem.  Of course with chapter 12 it painlessly goes on the taxpayer`s tab.

Veteran Advisor

Re: Raising limits on Chapter 12

Has  anyone  interviewed  that  Chris M.  that  wrote  the  2012  article  for  A  W  - ?    

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Veteran Advisor

Re: Raising limits on Chapter 12

The regulations put in place after 1986 "so it wouldn't happen again" are another example of "good intentions" that don't produce worthwhile results.IMO, bailouts just lead to more consolidation, which can lead to the "need" for more bailouts.  Don't bail them out.  It may be the oppurtunity some young, beginning, or small farmers need to pick up some pieces and get established.