The Senate last week approved a bill that would allow farmers to continue using Chapter 12 bankruptcy protection for another nine months.
The Senate's voice vote on Thursday follows passage of a House bill earlier in the week to extend the bankruptcy provision until Dec. 31. The law giving farmers this special bankruptcy protection expired on Thursday.
"The current depression in the farm economy underscores the need to get this safety net on the books for good," said Sen. Charles Grassley, R-Iowa. Unlike Chapter 11 of the bankruptcy code governing corporate reorganizations, Chapter 12 does not require farmers to obtain the consent of creditors before reorganization. Congress has continually renewed the 1986 law since it first expired in 1991.
John Blanchfield, manager of agricultural banking and rural development at the American Bankers Association, said he was concerned about other recent proposals that would have made it easier to use Chapter 12 by loosening income, debt, and qualification standards.
-- Craig Woker