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David F. Mills of Mills Law Firm recently spoke on “Current Issues in Agriculture” at the Eastern Bankruptcy Institute’s (EBI) 2017 Seminar in Myrtle Beach, South Carolina. 

The EBI provides continuing legal education for attorneys and paralegals, and provides information and resources on the current state of the law in the bankruptcy and business law fields. 

Mills represents clients in a wide range of bankruptcy matters, including assisting North Carolina farmers with Chapter 12 bankruptcy and related claims.  In addition to his bankruptcy practice, Mills serves as head of the Stubbs Bankruptcy Clinic at Campbell Law School in Raleigh, North Carolina.

When preparing for you free consultation with Mr. Mills, please bring the following documents to help us better understand your picture. If you can’t find all of these items, don’t let that discourage you from coming in. Often we can provide guidance on where this information can be obtained:

  • The most recent bill or statement from each creditor
  • All letters from collection agencies or lawyers
  • Any papers relating to a lawsuit
  • The past 6 months of paystubs
  • The past 2 years of tax returns
  • State ID (such as a driver’s license) and your Social Security card
  • A list of real estate and automobiles you own

Although this is not a complete list of what’s needed should you choose to pursue bankruptcy, it serves as a starting place to help us make an initial analysis of how we can provide the help you need.

Three major benefits come from bankruptcy. The first is the automatic stay, a federal court order that takes effect as soon as your bankruptcy case is filed. It prohibits your creditors (the people you owe money to) from calling or harassing you, suing you, repossessing anything or foreclosing on your home, or any other actions to collect a debt from you. They have to leave you alone.

The second benefit is the ability to claim exemptions. Exemptions represent certain types of property you can keep even though you’ve filed bankruptcy. These exemptions, in most cases, cover all the assets you own, meaning that in most cases you won’t lose any assets.

The third benefit is the discharge itself—the forgiveness of debt that bankruptcy provides to honest debtors—those that fully, accurately, and honestly disclose everything they own and everything they owe to the Bankruptcy Court.

Although these are the Big Three benefits that come from bankruptcy, there are many others—peace of mind, the ability to sleep at night, improvement of credit scores, the freedom to answer the telephone without fear that it’s another debt collector. Other, more technical benefits may also be obtained from a bankruptcy filing, like voiding certain kinds of judgments and liens against your property, and Mills Law knows how to use them to obtain the fresh start you need.

A bankruptcy discharge gets rid of most typical debts, including:

  • Credit card bills
  • Medical bills
  • Personal loans
  • Some taxes
  • Lawsuits
  • Business debt
  • Deficiency claims (debts left over after repossession or sale of a car, home, or other property)

Occasions also exist when bankruptcy will allow you to reduce the amount you owe on your cars and other personal property.

This is not a complete list. We can help identify those debts that will be extinguished by a bankruptcy discharge.

Bankruptcy will not get rid of all types of debt.  These debts are referred to as non-dischargeable debts because you will continue to owe them after your bankruptcy case is over.

Some debts that will survive the bankruptcy include:

  • Most taxes
  • Most student loans
  • Child support and alimony
  • Debts arising from fraud or shortly before you file bankruptcy

This is not a complete list. We will help identify which debts may be forgiven, and those that will remain, based on your personal case.

David F. Mills of Mills Law Firm is now serving as head of the Stubbs Bankruptcy Clinic for Campbell Law School.  Mills’s term began December 1, 2014 and continues to this day.

The Stubbs Bankruptcy Clinic is charged with providing students a unique experience in bankruptcy law as it tackles cases referred by the U.S. Bankruptcy Court and Legal Aid of North Carolina.

Mills, a double Camel, received both his undergraduate and graduate degree from Campbell University. He has been active with the school for years. He represents clients in a wide range of bankruptcy matters, including assisting North Carolina farmers with Chapter 12 bankruptcy and related claims.

For more information, visit the Campbell Law News website.

The first step toward your fresh start is to call Mills Law and schedule your free consultation. You’ll need to bring certain information (see “What to Bring to the First Meeting”). During this appointment you’ll meet with David Mills to talk about your concerns, goals, and the details of your financial situation. Based on your assets, liabilities, income and your objectives, we’ll help you decide whether bankruptcy is right for you and, if so, what type (or chapter) of bankruptcy will most help you.

At this point you’ll receive a list of additional information to gather and an outline of the steps needed in order to prepare for bankruptcy filing. We’ll also discuss the cost of the bankruptcy case so that you can make an informed decision.

Once you’ve provided all the needed information we can prepare the required documents for Bankruptcy Court, which you will carefully review to make sure everything is accurate, truthful, and complete. Once you’ve finished this step, your case gets filed.

At that point, the automatic stay stops your creditors from calling, writing, or trying to collect from you. The court appoints a trustee to oversee your case and sets up a meeting between you and this trustee. Rest assured you won’t be alone as Mills Law will be with you each and every step along the way. Mr. Mills will attend this meeting where the trustee will ask you a series of questions to make sure the information you’ve provided is honest and accurate.

Once you complete the requirements of the Bankruptcy Court, you’ll receive the discharge, which is the forgiveness of debt, and your case will soon be closed allowing your life to move forward with a clean slate.

If you’ve been making a lot of late payments, or not paying some debts at all, then your credit score has probably already taken a hit, and there’s likely nowhere to go from here but “up.”  Bankruptcy will show up on your credit report for up to 10 years, but ask yourself how long it will take you to dig out of the financial hole you’re in if you don’t file? Getting your debts forgiven in bankruptcy can give you some breathing room and a chance to finally get your feet back on solid ground.

By David F. Mills

This year is shaping up to be a problem for many farmers in our area. Too much rain last fall decreased crop yields, cutting into farmers’ profits and causing a shortage of soybean seed. Prices for soybeans, corn, and other commodities are well off the highs of a couple of years ago. The combined effect of these issues will likely lead to the unfortunate default by many growers on their 2015 operating loans and other farm-related debts.

Unfortunately, farmers often wait too long before seeking help. Farmers are, by nature, eternal optimists—“next year will be better.” Also, farmers in financial difficulty are worried and embarrassed. They want to keep their lender happy, keep their trade creditors (fertilizer, chemical, and fuel dealers) happy, and maintain something of a normal life. As a result, the farmer often just does nothing.

Over the past 24 years, I have represented many farmers in financial distress, including many in Chapter 12 family farm bankruptcy. I am always surprised by how long the farmer has waited before coming in to get advice and direction.

If you are a farmer facing financial difficulties, there are things that you can do proactively to get a handle on your financial situation. An attorney experienced in agricultural finance issues can help. To get a head start, ask yourself the following questions:

1. What do you own, and what is it worth? List your real estate, your vehicles, your farm equipment, and all your other assets. What is the value of each item today?

2. Who has liens against your assets? Does anyone have liens against specific equipment, or does anyone have a blanket lien on all your equipment? How about deeds of trust against your real estate, including your home? How much is owed to each of these creditors? If more than one creditor has a lien against certain assets, what is the order of their priority?

3. Are there creditors who don’t have liens (unsecured creditors)? Who are they and how much do you owe them?

4. In the last 2 to 3 years, have you completed a financial statement, balance sheet, or cash flow statement? Often you will complete these forms when borrowing money, especially through the Farm Service Agency (FSA) or the farm credit system. Are these statements accurate and up-to-date?

5. Are your assets insured, including your farm equipment?

6. Do you have any crop insurance claims, other types of insurance claims, or do you anticipate receiving a government program payment?

7. Have you made arrangements for renting land for the coming year? Do you owe any land rent from last year?

8. Has anyone filed a lawsuit against you? If so, you have only a limited amount of time to respond to it.

9. Has anyone started a foreclosure against you, or repossessed any equipment? Again, if so, you must respond within a short time or you may lose important rights.

10. Have you talked to the lenders you are unable to pay? Don’t ignore them.

11. Have you defaulted or are you about to default on a loan from FSA? You have certain rights as an FSA borrower (loan servicing options) but you must act within a limited time in order to take advantage of those options.

12. Do you have a projected budget for the current year, with projected income and farm expenses? Is it a realistic budget?

13. Do you NEED all of the land and equipment you currently own? Can you “trim the fat” and turn in or sell any of your assets? If you do, what are the tax consequences?

14. Do you owe any income taxes or payroll taxes? Are you current on your tax return filings?

15. Are any of your debts guaranteed or co-signed by someone else?

16. Does anyone have a lien on your crops?

17. What are your options for financing this year’s crops?

18. Have you talked with a lawyer who is experienced in dealing with farm debt issues, including family farm bankruptcy? Talking to me doesn’t mean that you will definitely file bankruptcy. Often, I am able to help my clients avoid bankruptcy and deal with their debt problems through a workout plan with their creditors. But bankruptcy is an option to be fully considered. Farmers have special rights and provisions under bankruptcy law to protect them from their creditors, help them reorganize their finances, and stay in business.

If you are a farmer in financial distress or have been denied a crop insurance claim, call me to schedule an appointment. We will discuss your situation and I will help you realistically identify and evaluate your options. My telephone number is (919) 934-7235.

David F. Mills is an attorney in Smithfield, North Carolina, having grown up on a tobacco farm in Jones County in eastern North Carolina. He has practiced bankruptcy law, focusing on agricultural debt relief, since 1991. He is an Adjunct Professor of Bankruptcy at Campbell University School of Law and a member of the American Agricultural Law Association.

Perhaps it seems ironic, but filing for bankruptcy protection costs money. There are court filing fees, trustee administration fees, attorney fees, credit counseling fees, etc. After learning about the costs involved, some who could benefit from bankruptcy protection may end up wondering, “Can I afford to file bankruptcy?” In a good number of cases where bankruptcy is appropriate, the answer is “yes.” If bankruptcy protection would be beneficial in your case, your bankruptcy attorney can advise you on how to afford it. Here are some examples of ways to pay for bankruptcy:

Stop paying unsecured creditors. Always do your utmost to pay the bills that cover the essentials of life: your mortgage, your electric bill, your car payment (assuming you’re not driving a Ferrari), etc. Many times, the other bills can wait. The money that you would otherwise send to these creditors can help raise money to file bankruptcy.

  1. Borrow money from a family member or friend. The legal obligation to repay the loan will generally be discharged in bankruptcy, but after you receive a discharge, you’re free to repay any debt voluntarily.
  2. Borrow money from your retirement fund. Just be aware that you will have to repay the loan within a certain amount of time to avoid a penalty.
  3. Try crowd funding. There are all kinds of websites out there that can help you ask family, friends, and total strangers to help fund your personal cause. GoFundMe is just one example of such a site. Or set up a PayPal account, and ask your Facebook friends to donate $5. Of course, this will require sharing personal details on social media, and only you can decide if that’s something you’re comfortable with.

Bankruptcy protection could benefit many people struggling with debt. A bankruptcy attorney can analyze your options, and give you advice going forward. Your initial consultation is free at Mills Law, so it won’t cost you a dime to find out what your options are. A fresh start might not be easy, but it can certainly be worth it.


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