Chapter 11 Bankruptcy Attorneys in San Diego
Why Should I file Chapter 11 Bankruptcy?
Most importantly, The Small Business Reorganization Act of 2019 went into effect in February 2020 and may offer your business the Chapter 11 relief it needs. As a result, under this Act, small business owners may reorganize and restructure debts in a less costly process, as compared to traditional Chapter 11 bankruptcy filings. Finally the Act allows to streamline the process, eliminate some administrative costs, and allow debtors the space they need to improve their finances.
Changes to Chapter 11
The Small Business Reorganization Act allows for the following in the Chapter 11 process:
- First, The total secured and unsecured debts must be under $2,725,625.
- Secondly, A trustee who will not have a role in your business’s daily operation will be appointed. They will ensure payments are disbursed under the terms of your reorganization plan.
- Third, A status conference will be held within 60 days of filing, unless extended for good cause.
- Reorganization plan is filed within 90 days, unless an extension is granted. A disclosure statement is not required, but you will have to provide an analysis of the liquidation and a projection of how you will make payments.
- Rights of a secured lender and lien on your home may be modified if value from the loan was connected with the business and not used to obtain the residence.
- The Act removes the “absolute priority” rule, meaning business owners may keep the equity in their business and use disposable income to pay down their debts over a period of three to five years.
- Administrative expenses may be paid over the duration of the Chapter 11 plan.
- Finally, Discharge of debts addressed under the repayment plan is granted when you complete payments.
Get Started Today
If your business needs help, do not hesitate to reach out to our San Diego Chapter 11 bankruptcy lawyers – your business is too important to wait. To learn more about how the upcoming Small Business Reorganization Act may affect your bankruptcy filing, contact the Law Offices of Mark L. Miller.