Earlier this month, we spoke with Brownfield Ag News¹ to encourage farmers to confirm their records are all in order when reaching out to their banks for 2026 operating lines of credit as well as to make informed financial choices for their operations.

Although a farmer should keep their balance sheet and cash-flow records updated throughout the year, people do get distracted and busy. If you have not updated these records in a while, don’t put it off longer — pick a time in the next week to sit down and, in the words of Nike, just do it.

Our attorneys assist a lot of farmers, so over many years we tend to see a number of the same errors in judgment from new clients. If you are deep in debt or otherwise feeling financially desperate, it is easy to fall into a trap of “surely I can get around the problem by doing this” or “I’ll just do this temporarily, and then I’ll fix it” without realizing your shortcut or “fix” may, in fact, not be legal.

These are among the issues we see time and again, not in order of frequency:

• Selling in a relative’s name. If your grain or other farm product is pledged as collateral to a guarantor, you cannot sell it to a different buyer without getting the written consent of the guarantor. To get around this, some farmers have carried out sales under the name of a relative, with or without their knowledge—not only does it not absolve the farmer of liability, now they’ve put that relative at legal risk too.
• Selling sealed grain without permission. This is very similar to the above, except if you’ve sealed grain with the Commodity Credit Corporation and break that contract without permission—whether it’s under your name or someone else’s—now you’re dealing with the federal government on top of other legal problems.
• Selling to an unauthorized buyer. If your farm product is collateral to the bank and you are required to sell to a particular buyer, again, you cannot sell to a different one without written consent. Not even under your own name.
• Selling equipment with a lien on it. This one is fairly self-descriptive; if your combine has one or more liens on it, even if you are selling to repay those liens, you need to obtain written permission to make the sale. You then need to satisfy those liens before spending the proceeds anywhere else. This applies even if you’ve paid off the money you borrowed to buy the equipment, because most banks take blanket security interests that place liens on all equipment, even if that bank didn’t lend any money for that equipment.
• Falsifying your financial statement to the bank. Be upfront with a lender about your revenue, expenses, assets, and liabilities. Even if the loan officer couldn’t properly verify everything you provide them and determine the lie themselves, you are only setting yourself up for failure by agreeing to a loan you cannot afford to pay back timely.
• Submitting false crop-loss insurance claims. By now in this list, you should have the idea that providing false information to an office or agency holding the purse strings is not only legally ill-advised, it puts you in a bad financial position further down the line.
• Not properly filling out tax forms. Some people cheat on their taxes with full awareness; others provide incomplete information out of ignorance or inexperience, not understanding that to the government it looks much the same as cheating. When in doubt, hire qualified, professional help to assist with this.
• Applying for an unsecured or other high-fee loan, such as a merchant cash advance (MCA). An MCA is equivalent to a payday loan, which breaks the rules of an actual helpful business loan by requiring nearly-immediate repayment, imposing usurious rates or fees (even with immediate repayment), and providing no loan officer to go to with questions, concerns, or appeals.
• Not communicating with creditors when times are tight. We get it: Nobody wants to admit they’re overextended, especially not a hardworking farmer wired to be optimistic about future yield and income. But in this case, it truly is better to ask permission than forgiveness, both for better financial planning and to avoid legal troubles.

Of course, the main problem our attorneys see—the one behind all these mistakes—is a farmer not seeking assistance early enough to avoid these or other problems. We’ve said it before, but it bears repeating: While Ag & Business Legal Strategies is certainly qualified and willing to help farmers in legal trouble, we’d rather prevent it in the first place.

We have farm experience; we are related to and friends with farmers; and we want every farmer to succeed. The best way for you, the farmer, to keep doing that is to call us for advice as soon as you realize you have a problem, rather than waiting until it has reached (or passed!) a critical tipping point.

(319) 363-1641

At Ag & Business Legal Strategies, we want our clients to be honest with themselves and have a solid business plan. Our team will help you create and execute that business plan, and, if necessary, assist you with the legal, tax, and practical aspects of debt restructuring or bankruptcy.

Don’t wait for the problems to become insurmountable. Connect with someone you can trust today, not tomorrow, when it may be too late.

¹Brownfield Ag News, “Farmers Should Review Farm Financials Ahead of 2026 Loan Renewal Season.” Nov. 11, 2025.