As a bankruptcy lawyer, I am pleased to see that there is a new part of Chapter 11 Bankruptcy. Subchapter V greatly benefits small businesses and individuals alike.
The new Subchapter V of Chapter 11 Bankruptcy Small Business Reorganization Act of 2019 became law in February of 2020 (SBRA; H.R. 3311). https://www.congress.gov/bill/116th-congress/house-bill/3311/text
Small Businesses – Chapter 11 Subchapter V:
Before this new Subchapter V took effect, many businesses just could not afford the expense of a Chapter 11 Bankruptcy. There is a great deal of reporting and disclosures requiring the hiring of accountants, appraisers, and/or special counsel. This is in addition to their lawyers. The time, effort and costs make it impossible for a small business with debt to file bankruptcy. These small businesses sometimes are forced to file Chapter 7 and give up their businesses. Small businesses’ debt can make it impossible to remain operational and recover. These entrepreneurs are forced to close their doors and give up their dreams. Their debt was not enough to justify the costs and time of filing Chapter 11 Bankruptcy. However, this has changed.
This law was enacted to enable allow the following:
- Better Path for Small Businesses to Restructure
- Reduce Liquidations
- Save Jobs
- Increase $ Recovered for Creditors
- Recognize the Value that America has for the Entrepreneurs.
Individuals – Chapter 11 Subchapter V:
Before this new Subchapter took effect, individuals with over $419,275 in unsecured debt and/or secured debt of $1,257,850 could not file a Chapter 13 bankruptcy. These individuals were forced to file a Chapter 11. As with small businesses, it was not economically possible to afford a traditional Chapter 11. They can be forced to file a Chapter 7 and lose their assets.
Below are just a few of the major benefits:
- Restructure debts
- Maintain regular business operations
- Reject unfavorable executory contracts and/or leases
- Strip off or Strip down liens
- Shed debt to make your finances more profitable going forward
- Keep your assets
If you have a small business with overwhelming debt or an individual who is over the debt limits for filing Chapter 13, you may benefit from this new part of the Bankruptcy Code.
I am available to meet with you and evaluate your situation. Chapter 11 Subchapter V can help you! https://njbankruptcylawfirms.com/chapter-11-subchapter-v/
Call me today for a Free Consultation: Ralph A. Ferro, Jr., Esq. (201) 446-5904.