This is a Chapter that envisages providing a mechanism for family farmers and fisherman who have fiscal problems an opportunity to repay their debts, wholly or partly. The debtor’s herein has to submit a repayment plan spread over three or five years, envisaging regular payments. The proceedings under this chapter are initiated by a petition being filed voluntarily by the debtor at the concerned Court at the place of his residence and in case of a corporation or partnership, at the principle place of its business. Furthermore, the official bankruptcy form should divulge the complete details of the creditor including the amount and nature of the claims as well as details regarding the debtor’s property. Furthermore, a trustee is appointed who carries on the duties of evaluating the case as well as carrying out the functions of a disbursing agent. He also convenes a meeting of the creditors, in which the debtor has to satisfactorily provide answers on queries regarding the repayment plan and his financial affairs. On confirmation of the plan by the Court, the trustee has the duty to distribute the fund in accordance with the plan.
When all payments under the plan have been made, the debtor’s liability will be discharged subject to the condition that all domestic support obligations have been fulfilled and certain exceptions. Chapter 12 also envisages a hardship discharge, that provides for discharge of liability, even if full payment has not been made, if such default was due to circumstances beyond the control of the debtor.
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