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Tag Archives: Small Business Reorganization Act

Does Subchapter V Allow Corporations to Discharge Debts Based on Fraud?

The Small Business Reorganization Act of 2019 created Subchapter V, designed to allow small companies to reorganize without Chapter 11’s usual expenses, delays and complex procedures. Subchapter V applies to both individual and corporate debtors, but not always equally to both. Federal courts are in conflict over the ability of corporations to discharge certain types […]

Can Chapter 11 Provide a Company Relief from PPP Loans?

Small businesses that used the Paycheck Protection Program to keep their workforces employed during the COVID-19 pandemic may now be looking for ways to relieve their financial burdens. One path for relief is PPP loan forgiveness through the U.S. Small Business Administration (SBA). Alternatively, a company might be able to use Chapter 11 bankruptcy to discharge […]

Bankruptcy Options for Small Businesses in Financial Distress

Navigating financial challenges is a common part of running a small business. But when the burden of debt becomes too heavy to bear, owners have legal alternatives to shutting down the enterprise. The primary bankruptcy options that allow small businesses to stay in operation are Chapter 11 and Chapter 13. Which option is best suited […]

How Subchapter V Helps Individual Debtors Get Chapter 11 Plans Confirmed

Chapter 11 is used mostly by financially stressed companies seeking protection from creditors while working to pay off debt and return to solvency. This form of bankruptcy relief is also available to qualifying individual debtors, but until recently it was too complex and costly to be feasible for them. However, the Small Business Reorganization Act […]

Meeting the Subchapter V Test of Being “Engaged in Commercial or Business Activities”

The Small Business Reorganization Act (SBRA), enacted in 2020, created a new procedure called Subchapter V, which made it easier for small businesses to file for Chapter 11 protection. Since then, Subchapter V has been used extensively to help business owners regroup, reorganize and return to solvency when they otherwise would have gone under. However, […]

COVID-19 Complicates Estimation of Future Income for Subchapter V Reorganizations

The Small Business Reorganization Act (SBRA) offers a simpler and more affordable alternative to the traditional Chapter 11 bankruptcy process, which historically has been of little use to modest-sized companies. The SBRA procedure, known as Subchapter V, allows such businesses to create three- to five-year repayment plans based their “projected disposable income.” However, the recession […]

How the CARES Act Expands the Reach of Small Business Bankruptcy Protection

In February 2020 the Small Business Reorganization Act went into effect, creating a low-cost, streamlined procedure, known as Subchapter V, for small businesses seeking bankruptcy protection from creditors. No sooner had the law gone into effect than the COVID-19 virus hit the U.S., with a resulting economic recession that put thousands of businesses across the […]

CARES Helps Bankruptcy Filers During the COVID-19 Pandemic

More than 40 million U.S. workers have filed for unemployment since the coronavirus pandemic spread across the nation, and many who still have their jobs are understandably worried that layoffs could be coming anytime. Business owners, too, are feeling the pain. A recent BizFed survey found that approximately 90 percent of small companies in the […]


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