What action can be taken when an FLP borrower files for Chapter 7 Bankruptcy?

When a Farm Loan Program (FLP) borrower files for Chapter 7 Bankruptcy, it is essential for the lender to maintain compliance with bankruptcy laws and uphold proper communication with the borrower and their legal representation. Providing notice of all available servicing options to the borrower's attorney, with a copy to the borrower, is an appropriate and responsible action in this context.

This option ensures that the borrower is informed of their rights and the various avenues available to address their financial difficulties while navigating through the bankruptcy process. This can include potential loan modifications, deferments, or other alternatives that may help the borrower retain their farm operation. It also aligns with the legal requirement to communicate with both the borrower and their attorney, ensuring that all parties are informed and that the borrower receives adequate support during this challenging time.

Engaging in proactive communication during bankruptcy proceedings demonstrates a lender's willingness to work with the borrower, fostering a constructive relationship and potentially improving the outcomes for both parties involved.