As a small business owner who may be considering filing Chapter 11 bankruptcy, you may be at a point in your personal and business life where you feel like the odds are stacked against you – and especially when it comes to finances. Believe it or not, though, there actually have been new and helpful laws made for debtors lately; for instance, the Small Business Reorganization Act of 2019 is meant to help small companies and individuals with business debts headed into bankruptcy.
Filing for Chapter 11 can be a trying time, but the Small Business Reorganization Act (SBRA) provides debtors who qualify with new tools for a reorganization of debt.
Following is a rundown of some of the benefits of the SBRA:
- Removal of U.S. Trustee fees, which can be very costly, and overall streamlining the re-organization process.
- Elimination of the absolute priority rule, which is often difficult for Chapter 11 debtors to satisfy.
- Administrative expenses may be stretched out during the term of the bankruptcy rather than required to be paid on the effective date of the plan.
- Some residential mortgages can be modified, meaning that a small business owner may be able to modify such a loan if it was not originally used to buy a home and was used mostly for business purposes.
- Plans can be approved without acceptance if creditors of certain criteria are met.
- Discharge can occur quicker in certain cases, especially for individuals.
Overall, Chapter 11 is helpful to debtors who own businesses as a reorganization may occur while the doors are still open. With an automatic stay in effect, this means that debt collections activities are halted in most cases. Working with a skilled bankruptcy attorney, business owners and individuals who qualify can come up with a plan to restructure and discharge debts.
You probably have many questions about bankruptcy, including which type of bankruptcy will work best for you, how much you will have to sacrifice (very little in many cases), and whether you will have to go to court. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.