New Small Business Bankruptcy Law is Timely
In these days of falling stocks, empty shelves, and people in quarantine, small business owners need to be aware that on February 19 Congress gave them a powerful, convenient, and cost effective way to reorganize their businesses without having to pay 100% of their debts and without having to sell their assets.
The Small Business Reorganization Act (SBRA) took effect in February at, fortunately, the right time. Now, small business owners can use the tools and powers granted to Chapter 11 Debtors with many roadblocks and impediments removed. Plans can still be confirmed by creditor vote, but now can be confirmed by the Court so long as creditors are treated fairly. All you have to be able to do is pay secured creditors the value of their collateral on new terms, and unsecured creditors can be paid just the net distributable income that your business earns above expenses over a period of 3 to 5 years.
This means that small standalone business owners, whose debts are less than $2,725,625 have a promising and effective way, over and above any relief the government may provide, to make sure their business can survive these challenging times. If your business is impacted, and you do not have cash reserves to stay afloat, do not give up until you see a Board Certified Business Bankruptcy Attorney.
This article is written by an attorney at Attorney Donald Wyatt PC. Always consult an attorney before making any legal decisions. To make an appointment today, please click here to contact us.