Farm Bankruptcy Bill Passes

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Iowa Senator Chuck Grassley and Senator Al Franken from Minnesota have sent a bipartisan farm bankruptcy relief bill to the President. It passed 82-17 in the Senate.

The bill is designed to make it easier to declare chapter 12 bankruptcy and reorganize.

When farmers file bankruptcy, they often have to sell assets like farm equipment or land. When they do that, the government takes a portion of that in taxes, sometimes that difference makes the reorganization unaffordable.

Grassley says the original bill 20 years ago, was a response to the 1980s farm crisis, but in 2012, the Supreme Court ruled it unconstitutional.

Grassley thinks the ruling ignored the intent of Congress, but the new law has clarified that and does the same thing in a constitutional way.

He's been trying to get this law passed for several years, so the government isn't at the head of the creditor line, "Maybe you don't have enough money left to reorganize. So basically, we were putting the government further down the chain of creditors. So farmers could reorganize, have an efficient operation once they sold something off, and still be in the business of farming."