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RECORD 



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Number 8 



AUGUST, 1934 



Volume 12 



,». 



Debt Relief Under 



F 



razier-L.em 



-L 



keA 



men 



dment 



additional 5 per centum of the 

 appraised price within four years 

 from the date of said agreement. 

 e. Payment of an additional 5 

 per centum of the appraised price 

 within five years from the date of 



;■ 1 



FARMER "A" of La Salle county, 

 Illinois, has a $12,000 mortgage 

 at five per cent on his 120 acre 

 farm. He also has a chattel mortgage 

 of $1,500 at six per cent, and ad- 

 ditional unsecured notes at seven per- 

 cent amounting to $1,000 — a total 



debt of $14,500... .. ::.i-.;-'o-'V'':-^^^^^ 



He has been unable to pay $760 

 annual interest and keep up the taxes. 

 Creditors have been patient but have 

 finally decided to foreclose. What can 

 he do about it? : -^ 



: He can go to his creditors and ask 

 for a scaling down of interest, prin- 

 cipal, or both. Or he can go to the 

 county conciliation commissioner ap- 

 pointed by the federal district court, 

 and ask him to intervene toward se- 

 curing a scale-down or extension of 

 his debt.._ _..;., ^.., ,_:.,;., ^.., ,.-..., .;':-;;;• 



Let us assume that the creditors 

 •are unwilling and insist on foreclos- 



:■•>■.'■' 



make objections and exceptions to th^ 

 appraisal by appeal to the court. 



After the value of Farmer "A's" 

 property has been fixed by appraisal, 

 the referee in bankruptcy is required 

 to set aside Farmer "A's" exemptions 

 subject to the chattel mortgage. The 

 referee shall further order that 

 Farmer "A" may retain possession of 

 the remainder of his property subject 

 to the mortgages up to the appraised 



value.- : • , o .. r ■■■■■ :.. .>-',;; : '.-i- ■ ■;• -: .; ■ ■ 



If the mortgage holders agree, the 

 trustee appointed by the court shall 

 sell to Farmer "A" his farm, and 

 chattels at the appraised value upon 

 the following terms and conditions, 

 and upon such conditions as in the 

 judgment of the trustee shall be fair 

 and equitable: ' : 



,: a. Payment of 1 per centum in- 

 terest upon the appraised price ■ 

 Tz: within one year from the date of — 

 ;■ said agreement. 



b. Payment of 2J/2 per centum ; 

 of the appraised price within two 

 • years from the date of said agree- 



:•".;• ment. ■-^;-:. /";■/• .•••■.•- i.^: •:...■.. 



'![/'■ c. Payment of an additional 254 C 

 ■ ' per centum of the appraised price ; 



within three years from the date 



of said 



agreement. 



, d. P a y- f^ 



ment of an 



ing. Under the Frazier-Lemke amend- 

 ment to the federal bankruptcy act, 



^Farmer "A" may have his lawyer 



.draw up a petition to the federal 

 court that he be adjudged a bankrupt, 

 that his property be appraised, his 

 exemptions as prescribed by the state 

 law ($400 of personalty in Illinois in 

 case he is the head of a family) sub- 

 ject to any liens thereon, be set aside, 

 and that he be allowed to retain pos- 

 session of the remainder of his prop- 



■.erty. ■ ' - /■. 



Appoint Appraisers , 



Thereupon the judge is required 

 appoint apprais- 

 ers to put a fair 

 a n d reasonable 

 value on the 

 property of 

 Farmer "A" — 

 not necessarily 

 the market value 

 #f time of ap- 

 p r a i s a I. Any 

 creditor, or 



Farmer "A" may ,^ whiteside county farm bureau float in celebration at sterling. 



; said agreement. 



f. Payment of the remainingv 

 unpaid balance of the appraised 

 price within six years from the v 

 date of said agreement. 



;3 : One Per Cent Interest 



Interest shall be paid on the ap- 

 praised price and unpaid balances of 

 the appraised price yearly, as it ac- 

 crues, at the rate of 1 per centum per 

 annum and all taxes shall be paid by 

 Farmer "A.".;,,-;..,, ■,.■_...-... v. ,..•;■,•■; ;-..•>■. 



The proceeds of such payments on 

 the appraised price and interest shall 

 be paid to the lien holders as their 

 interests may appear, and to the 

 trustee of the unsecured creditors, as 

 their interests may appear, if a 

 trustee is appointed. 



If Farmer "A" is fortunate enough 

 to secure the consent of the creditors 

 to a reasonable reduction in the face 

 value of his debt, he is privileged to 

 dispose of any part of it provided he 

 pays the appraised value of such part 

 to the secured creditors as their in- 

 terests may appear, and the trustee 

 of the unsecured creditors as his in- 

 terest may appear. 



If Farmer /*A" fails to comply fully 

 with the terms and conditions as to 

 ; payments, as provided, both to 

 ; any or all of the secured cred- 



itors, or to the trustee of the 

 unsecured creditors, then such 

 secured creditors or the trustee 



may proceed to 

 foreclose. 



However, 1 e t 

 us assume that 

 one of the se- 

 cured creditors of 

 Farmer "A" files 

 written o b j e c- 

 tions to the man- 

 ner of payments 

 and distribution 

 of Farmer "A's" 

 property. Let us 

 (Cont'd on P. 9) 



Published monthly by the Illinois Agricultural Association at 165 So. Main street, Spencer, Ind. Editorial Offices, 608 So. Dearborn St., Chicago, 111. 

 Entered as second class matter at po&t office, Sppncer, Ind. Acceptance for mailing at special rales of postage provided in Section 412, Act of Feb. 28, 

 1926, authorized Oct. 27, 1925. Address all communications for publication to Editorial Offices, Illinois Agricultural Association Record, 608 So. 

 Dearborn St., Chicago. 



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