Subchapter V Bankruptcy Attorneys Greensboro NC
Subchapter V – Small Business Reorganization Act
Subchapter V of the Chapter 11 Bankruptcy Code is also known as the Small Business Reorganization Act (SBRA). The SBRA makes it easier for business entities and individuals to create a Chapter 11 Bankruptcy plan; while also, assisting in restructuring small businesses successfully, maintaining a business’s employees, and protecting the value of the business.
The SBRA was signed into law in August of 2019 and took effect in February of 2020. Through the SBRA, small businesses have access to filing for Chapter 11 Bankruptcy whereas before they may not have been qualified to file for a reorganization case. A business entity or person who engages in business or commercial activities with non-contingent, liquidated, and secured and unsecured debts, with aggregate liabilities of $2,725,625 or less may elect to use Subchapter V of the Chapter 11 Bankruptcy Code. Subchapter V is not applicable to a small business operating a as a single real property or real estate company.
*The US Congress has temporarily increased the debt limit to $7,500,000 through March 27, 2021 in response to COVID-19.
Benefits of SBRA
- No Absolute Priority Rule
- Debtor Files Plan (90 Days to File)
- Easier Retention of Counsel & Subchapter V Trustee
- Reduced Administrative Expenses
- Payment of Expenses Over Term of Plan
- Post Confirmation Plan Modifications
- Automatic Stay Protection
- Modification of Specific Mortgages on Principal Residences
- Potential Early Discharge of Debt
- No Cramdown of Vehicle Loans
Are you eligible for Chapter 11 Bankruptcy or Subchapter V?
Contact our office and speak with one of our attorneys today for guidance and how to proceed forward with your business and path to debt relief. We will work with you throughout the entire process and assist you in finding the best course of action and options for you.