- Martelle, Gordon
New Version of Chapter 11 Bankruptcy
Congress enacted a new version of Chapter 11 for small businesses with less that 7.5 million dollars of debt. The new version makes much simpler reorganizations for small businesses, including sole proprietorships, LLC’s and small corporations.
Unlike traditional Chapter 11 matters, there is a much simplified procedure for the Sub-chapter 5 reorganizations. This includes much less paperwork, no Disclosure Statement, a simplified Plan of Reorganization and easier confirmation, including no voting on the plan.
These changes make the procedure much less costly than the prior Chapter 11 proceedings which were very complicated.
The plans length is between 3-5 years depending on the specifics of an individual business. Once the plan is completed, the remainder of the unsecured taxes are discharged, much like in Chapter 13.
For more information, please contact our offices and we can advise you whether you might qualify.