Small Businesses with under $7.5 million in debt.
Small Business Bankruptcy options include both Chapter 11 filing and Subchapter 5. Subchapter 5 applies to business with less than $2.7 million in debt and allows for reorganization. Depending on the size of your business, Subchapter 5 should be explored. Two new changes to the rule: a judge to enforce the restructuring plan, rather than a creditor and an owner can continue running their business. Congress recently expanded eligibility to businesses with up to $7.5 million in debt, helping save many small businesses.
To file, an entity must have the businesses most recent balance sheet, federal income tax return, statement of operations, and cash flow statement. Even if you do not have the aforementioned items, we recommend reaching out to determine considerations. The Chapter 11 or Subchapter 5 bankruptcy plan must be submitted for approval within 90 days, so the importance of pre-planning is vital. Contacting our office early in the process will be essential to ensure the proper handling of Chapter 11 or Subchapter 5 bankruptcy - rest assured we are here to help you through the process.