What is Chapter 12 bankruptcy? Only family farmers are eligible to file chapter 12 bankruptcy. It is the chapter where small farms can reorganize their debts and restructure their businesses. Chapter 12 is most similar to Chapter 13 bankruptcy, and involves the same basic features. There are limits on the amount of debt that an individual in a chapter 12 case may have, but those limits are substantially higher than the chapter 13 debt limits. Chapter 12 is also much more flexible than Chapter 13 (for example, debts may be stretched out much longer than five years), and there are some significant tax advantages to Chapter 12. Moreover, a Chapter 12 bankruptcy filing generally costs much less than a similar Chapter 11 case.