Publications for Collections / Creditor - Debtor Rights

A record-setting wet spring, fluctuating commodity prices, tariffs, and rising input costs are just a few of the pressing challenges for farmers and ag-related businesses. While the federal and state governments are being supportive of Michigan farmers as they face during this difficult time, providing disaster relief, crop insurance flexibility and loan programs, the reality is that many farms and agribusinesses are facing money troubles beyond the relief offered by these programs.

In sports, it is often said that, “The best offense is a good defense.” This adage holds true not only on the field of play, but also in business and in life.

The purpose of bankruptcy is twofold: (1) to provide the party filing for bankruptcy—the “debtor”—with a fresh start, and (2) to fairly distribute the debtor’s non-exempt assets to creditors in accordance with the priority scheme set forth in the U.S. Bankruptcy Code.

By most measures the economy is strong. Unemployment is low. The stock market is roaring. Gross domestic product is rising. Under these circumstances, bankruptcy is on few people’s minds.

On July 16, 2014, the Uniform Law Commission (the “Commission”) approved a series of changes to the Uniform Fraudulent Transfer Act (the “UFTA”). The UFTA had previously been adopted by most states in the country, including Michigan. The Commission’s amendments included changing the name of the law from the UFTA to the Uniform Voidable Transactions Act (the “UVTA”).