Small Business Bankruptcy in Los Angeles
Providing Guidance for Chapter 11 Subchapter V Bankruptcies
The Small Business Reorganization Act (SBRA), which is the new Subchapter V added to Chapter 11 of the bankruptcy code, was signed into law in 2019 and became effective in 2020. It was designed to provide a lifeline to struggling small businesses and could not have come at a better time. At Azadegan Law Group, APC in Los Angeles, our bankruptcy team can provide the guidance you need to improve your small business’s future.
Reach out to our law office today at (310) 340-1550 to request a case review with one of our attorneys to learn more about what we can do for you and your business.
What Are the Benefits of Choosing a Subchapter V Bankruptcy?
Subchapter V gives small businesses a simplified process for paying off their debt as long as they are still earning a profit despite their struggles. Small businesses that file for this new subchapter of bankruptcy can compel creditors to accept court-approved repayment plans. The repayment plan can also be used to shed unsecured debt, such as credit card debt.
Below are some of the benefits of choosing a Subchapter V bankruptcy:
- You can continue to run and own your business as long as you keep up with your repayment plan.
- Bankruptcy court can confirm your plan without acquiring creditor approval. On the other hand, a traditional Chapter 11 requires the approval of creditors.
- In a traditional Chapter 11 bankruptcy, your creditors can submit a plan. In a Subchapter V, however, no one other than your business may submit a plan.
- In a Subchapter V bankruptcy, it is unnecessary to file a disclosure statement with the bankruptcy court.
- In a Subchapter V bankruptcy, you can pay your administrative expenses throughout the length of your plan.
On March 27, 2021, the COVID-19 Bankruptcy Relief Extension Act of 2021 was signed into law. Among other relief, this legislation extends the higher $7,500,000 debt limit for subchapter V eligibility for another year. The new sunset date is March 27, 2022 .Businesses with more than $7.5 million in debt do not qualify for a Subchapter V bankruptcy. Moreover, at least half of your business’s debt must be business-related.
Discuss Your Subchapter V Bankruptcy Case with a Member of Our Legal Team Today!
If you are considering filing for bankruptcy for your small business, the experienced team at Azadegan Law Group, APC in Los Angeles can guide you through the process and inform you of any other legal options available to you that may reduce your financial burdens. We know how overwhelming this situation is for you and will provide the advice you need to smoothly navigate it.
Reach out to our law office today at (310) 340-1550 to set up an initial case review with one of our knowledgeable bankruptcy attorneys to learn more about the benefits of filing for a Subchapter V bankruptcy.