President Clinton Tuesday signed a law that grants a six-month extension of a bankruptcy chapter for farmers.  The provision keeps in place Chapter 12 for farmers who may need to reorganize farm debt in coming months.

Sen. Charles Grassley (R-IA), who was a major force behind the extension, also wants Chapter 12 made a permanent part of the federal bankruptcy code.  "Chapter 12 has proven itself a viable safety net and kept more farmers in business," he said.

Chapter 12 prohibits lenders form foreclosing on property if a farmer is able to make rental payments.  Another key element of the chapter is the removal of a requirement for farmers to obtain creditor approval of a reorganization plan as the farmer works to become solvent again.  Grassley says that often has led to farm families being forced off their land.