The Small Business Reorganization Act ("SBRA") was signed into law in August 2019 and became effective in February 2020. The SBRA makes Chapter 11 bankruptcy more accessible and less expensive for small businesses by establishing a process under Chapter 11. The SBRA creates a new Subchapter V of Chapter 11 of the Bankruptcy Code.
To be eligible for relief under Subchapter V, a debtor (whether an entity or an individual) must have total debt not exceeding $3,024,725 (subject to adjustment every three years). Subchapter V permits debtors to reorganize their debt obligations and pay their debts over time. This is especially attractive to businesses that desire to continue operations while repaying their debts. In addition, eligible debtors considering Subchapter V, may want to take advantage of the increased debt threshold under the CARES Act. While more streamlined and affordable, Subchapter V bankruptcies can vary greatly in complexity so its important that you speak with your local, Houston qualified bankruptcy attorneys at Tran Singh LLP who specialize in debt relief services and are experienced in Subchapter V small business bankruptcies.
A Subchapter V bankruptcy proceeding begins when a petition is filed with the bankruptcy court serving the area where the business debtor is organized or has its principal place of business or principal assets. Customarily, your case will be held at the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, which is located in Downtown Houston and serves the following counties: Austin, Brazos, Colorado, Fayette, Fort Bend, Grimes, Harris, Madison, Montgomery, San Jacinto, Walker, Waller and Wharton. The court is required to charge a $1,167 case filing fee and a $571 miscellaneous administrative fee. If the debtor is an individual (or husband and wife), there are additional filing requirements, including, among other things, receiving credit counseling from an approved credit counseling agency.
Upon the filing of the Chapter 11 petition, electing to proceed under Subchapter V, an automatic stay is granted, which provides a period of time in which all judgments, collection activities, foreclosures and repossessions of property are suspended and may not be pursued by creditors on any debt or claim that arose before the filing of the bankruptcy petition. Following the filing of the petition, there are various additional schedules and statements which are required to be filed with the court. After filing, the debtor automatically assumes an additional identity as the "debtor in possession," which term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under Chapter 11, Subchapter V.
Under Subchapter V, a private trustee is automatically appointed. However, the debtor retains control of its assets and operations. While Subchapter V Trustees have authority to investigate the debtor's financial affairs and object to the allowance of proofs of claim, their primary function is to facilitate a consensual plan among the debtor and its creditors and to oversee the plan confirmation process and ensuring that the debtor commences making timely payments under any confirmed plan. Although the preparation, confirmation and implementation of a plan of reorganization is at the heart of a Subchapter V case, other issues may arise that must be addressed by the debtor in possession. Your experienced attorneys at Tran Singh LLP will guide you through any issues that may arise during your Subchapter V proceeding.
A key factor in the appeal of a Subchapter V bankruptcy is the ability of a business debtor to continue its day-to-day operations while providing a more expeditious process compared to a typical Chapter 11 reorganization. If your business is facing financial difficulties and struggling to pay debt obligations, the answer may be a Subchapter V bankruptcy to maintain viability while reorganizing debt obligations, depending on the particular facts and circumstances of your situation. If you are an individual and Chapter 7 and Chapter 13 are not feasible options for you, Subchapter V may provide an avenue for relief.
We encourage you to reach out to your local, Houston bankruptcy attorneys at Tran Singh LLP, specializing in debt relief services and have experience in Subchapter V cases and the nuances and complexities involved, and are equipped to guide you through the bankruptcy process and advise you on the path to achieve your goals.
To be eligible for relief under Subchapter V, a debtor (whether an entity or an individual) must have total debt not exceeding $3,024,725 (subject to adjustment every three years). Subchapter V permits debtors to reorganize their debt obligations and pay their debts over time. This is especially attractive to businesses that desire to continue operations while repaying their debts. In addition, eligible debtors considering Subchapter V, may want to take advantage of the increased debt threshold under the CARES Act. While more streamlined and affordable, Subchapter V bankruptcies can vary greatly in complexity so its important that you speak with your local, Houston qualified bankruptcy attorneys at Tran Singh LLP who specialize in debt relief services and are experienced in Subchapter V small business bankruptcies.
A Subchapter V bankruptcy proceeding begins when a petition is filed with the bankruptcy court serving the area where the business debtor is organized or has its principal place of business or principal assets. Customarily, your case will be held at the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, which is located in Downtown Houston and serves the following counties: Austin, Brazos, Colorado, Fayette, Fort Bend, Grimes, Harris, Madison, Montgomery, San Jacinto, Walker, Waller and Wharton. The court is required to charge a $1,167 case filing fee and a $571 miscellaneous administrative fee. If the debtor is an individual (or husband and wife), there are additional filing requirements, including, among other things, receiving credit counseling from an approved credit counseling agency.
Upon the filing of the Chapter 11 petition, electing to proceed under Subchapter V, an automatic stay is granted, which provides a period of time in which all judgments, collection activities, foreclosures and repossessions of property are suspended and may not be pursued by creditors on any debt or claim that arose before the filing of the bankruptcy petition. Following the filing of the petition, there are various additional schedules and statements which are required to be filed with the court. After filing, the debtor automatically assumes an additional identity as the "debtor in possession," which term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under Chapter 11, Subchapter V.
Under Subchapter V, a private trustee is automatically appointed. However, the debtor retains control of its assets and operations. While Subchapter V Trustees have authority to investigate the debtor's financial affairs and object to the allowance of proofs of claim, their primary function is to facilitate a consensual plan among the debtor and its creditors and to oversee the plan confirmation process and ensuring that the debtor commences making timely payments under any confirmed plan. Although the preparation, confirmation and implementation of a plan of reorganization is at the heart of a Subchapter V case, other issues may arise that must be addressed by the debtor in possession. Your experienced attorneys at Tran Singh LLP will guide you through any issues that may arise during your Subchapter V proceeding.
A key factor in the appeal of a Subchapter V bankruptcy is the ability of a business debtor to continue its day-to-day operations while providing a more expeditious process compared to a typical Chapter 11 reorganization. If your business is facing financial difficulties and struggling to pay debt obligations, the answer may be a Subchapter V bankruptcy to maintain viability while reorganizing debt obligations, depending on the particular facts and circumstances of your situation. If you are an individual and Chapter 7 and Chapter 13 are not feasible options for you, Subchapter V may provide an avenue for relief.
We encourage you to reach out to your local, Houston bankruptcy attorneys at Tran Singh LLP, specializing in debt relief services and have experience in Subchapter V cases and the nuances and complexities involved, and are equipped to guide you through the bankruptcy process and advise you on the path to achieve your goals.
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TRAN SINGH LLP
2502 La Branch Street | Houston, Texas 77004 | Phone: (832) 975-7300 | Fax: (832) 975-7301 | Email: [email protected]
DISCLAIMER AND LEGAL NOTICE
We are a debt relief agency. We help people file for relief under the Bankruptcy Code.
2502 La Branch Street | Houston, Texas 77004 | Phone: (832) 975-7300 | Fax: (832) 975-7301 | Email: [email protected]
DISCLAIMER AND LEGAL NOTICE
We are a debt relief agency. We help people file for relief under the Bankruptcy Code.