To learn more about how you can file for subchapter 5 bankruptcy in New York, do not hesitate to reach out to our firm today to speak with a skilled Newburgh bankruptcy lawyer. Our legal team is on your side.
What is subchapter 5 bankruptcy?
Originally, this kind of bankruptcy was limited to businesses with $2.7M in total secured and unsecured debt, however, the Coronavirus Aid, Relief and Economic Security Act (“CARES ACT) passed in March 2020 permits businesses with collected debt up to $7.5M to be eligible for Subchapter 5 in order to meet the requirements of small businesses during these financially challenging times. Small businesses must show that at least half of their pre-petition obligations originated from commercial business activities. Also, only businesses described as “single asset real estate,” suggesting they emanate all income from the operation of a single piece of real estate substantially, are not qualified.
If you have additional questions about Subchapter 5, do not hesitate to reach out to our skilled New York bankruptcy attorneys. We are on your side.
What are the advantages of subchapter 5 bankruptcy?
There are several different benefits that Subchapter 5 supplies. This is because it provides a more efficient and economical way to bargain a Plan of Reorganization with your creditors, including the following:
- No unsecured creditor committee;
- No quarterly U.S. trustee fees;
- No absolute priority rule. Equity holders maintain their equity in the company without needing to add new capital;
- Reorganization plan confirmation is possible without agreement by creditors as long as criteria are met that include equitable treatment of creditors.
Do not wait to give our firm a call today. Our legal team is ready to assess your company’s business and clear issues it is facing to decide if this is a possible tool to help your business succeed. Our skilled bankruptcy attorneys will advise you through the entire process from filing to confirmation of a Subchapter 5 Plan in order to appear a more prosperous business. Reach out to us today to get started. We are on your side.
What steps do I need to take to file?
Acknowledge that Subchapter 5 is a streamlined form of Chapter 11 of the Bankruptcy Code. It is made by filing a Chapter 11 petition and selecting Subchapter 5. Then, the small business debtor files documents with the court, including a current balance sheet and statement of operations. Note that a plan of reorganization must be filed within 90 days from the date of filing the petition. A Subchapter 5 U.S. trustee is appointed to overlook the small business debtor’s plan of reorganization.
CONTACT A BANKRUPTCY LAWYER TO DISCUSS YOUR DEBT OR COLLECTION ISSUE
Michael D. Pinsky, P.C. represents clients in bankruptcy actions and related matters. Please call 845-394-2616 or contact the firm online to schedule a consultation.