If your business was badly hurt by the pandemic shut down, you may be able to reorganize your company’s debts under a special type of Chapter 11 bankruptcy.
COVID Was Also a Small Business Disaster
In New York, small businesses were hit hard when the state shut down for almost a year. While some service industries were able to pivot to working from home, small retail owners were left with no customers and growing bills. If you have reached the point where your business’s debts are becoming overwhelming, the right debt lawyer may be able to help.
The Small Business Reorganization Act
The Small Business Reorganization Act (SBRA) is a part of Chapter 11 bankruptcy (subchapter V) that was designed specifically to help smaller business. Like Chapter 11, SBRA allows small businesses keep their businesses open while reorganizing their company’s debts. Previously, to be able to be a part of an SBRA program, your business could be in no more than $2,725,625 in debt.
As part of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, this limit was raised to $7,500,000. This, however, is a temporary change and will revert back to the original limit on March 27, 2022.
SBRA vs. Standard Chapter 11 Proceedings
The SBRA program was designed to be a faster, easier, and more cost-effective option over a traditional Chapter 11 bankruptcy case. There are a number of differences between SBRA proceedings and regular Chapter 11 bankruptcies:
This is just a simplified overview of these programs. To learn more about how the basics of Chapter 11 Bankruptcies work, click here – https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics
There are multiple procedures available in Chapter 11 bankruptcy, and it is easy to get confused and overwhelmed. If you’d like to talk directly to a compassionate, knowledgeable, human being, reach out to New York debt attorney Ronald Weiss for a free consultation. He can tell you which type of Chapter 11 bankruptcy is right for you, and help you get the process started. Call 631-271-3737 and take the first step to a fresh start.