If your small business is struggling with debt, Chapter 11 Subchapter V bankruptcy may be the right solution. This relatively new type of bankruptcy was introduced in 2019. It is designed to help small businesses with total debts of up to $3,024,725 to restructure their debts in a more efficient and cost-effective manner than traditional Chapter 11.
Here are the top reasons why your business might be a good candidate for Subchapter V bankruptcy:
You Would Earn a Profit if You Didn’t Have So Much Debt
Unlike Chapter 7, which involves closing your business and liquidating assets to pay creditors, Chapter 11 Subchapter V allows you to keep your business operational while reorganizing debt. This is ideal for businesses who have a solid business model but need relief from overwhelming debt. Subchapter V allows you to restructure unsecured debts over a three- to five-year repayment plan and secured debts as long as ten years.
You Need Protection from Creditors
Filing for Chapter 11 Subchapter V provides immediate protection from creditor lawsuits, repossessions, and collection efforts. This automatic stay gives you breathing room to develop your reorganization plan without the constant pressure of aggressive creditors. It allows you to focus on stabilizing your business and working towards a long-term solution.
You Need a More Affordable Bankruptcy Process
Traditional Chapter 11 bankruptcy can be costly and time-consuming, often requiring extensive legal fees. Subchapter V streamlines the process by eliminating some of the more complex requirements, making it a more affordable option for small businesses.
Is Chapter 11 Subchapter V Right for Your Business?
Navigating bankruptcy laws can be complex, and making the right choice for your business requires expert legal guidance. At Hurley Law, we help small businesses in the Dayton and Cincinnati region explore their bankruptcy options and create a strategy for financial recovery. Contact us today for a consultation to learn how we can help your business get back on track.
