What is Subchapter V of the Bankruptcy Code?

Subchapter V of the Bankruptcy Code is a new section that was added in 2019 in order to help small business debtors. This new section offers a number of benefits for small businesses, including simpler and faster procedures, more flexibility in reorganizing their debts, and access to more financing options. At least 50% of the debtor’s unsecured debt must be incurred in the ordinary course of business in order for a small business to qualify for Subchapter V.

What Are The Benefits Of Subchapter V?

There are several benefits that small businesses can enjoy by filing for bankruptcy under Subchapter V. Perhaps the most significant benefit is that it allows small businesses to reorganize their debts in a simpler and faster manner than under traditional Chapter 11 bankruptcy. In addition, Subchapter V provides small businesses with more flexibility in how they repay their creditors. For example, they may choose to pay creditors based on their ability to pay, rather than on the priority of their claims. Finally, small businesses that file for bankruptcy under Subchapter V have access to more financing options, as creditors are typically more willing to extend credit to businesses that are undergoing bankruptcy proceedings.

How Can Subchapter V Help My Small Business?

If your small business is struggling to repay its debts, Subchapter V may be a good option for you. By filing for bankruptcy under this new section of the Bankruptcy Code, you can take advantage of the benefits it offers, including simpler and faster procedures, more flexibility in reorganizing your debts, and access to more financing options. An experienced bankruptcy attorney can advise you on whether Subchapter V is right for your small business and help you through the process of filing for bankruptcy.

When Should I Contact a Bankruptcy Lawyer?

Bankruptcy can be a difficult and stressful process, but it can also be a great relief for those who are struggling with unmanageable debt. If you are considering filing for bankruptcy, it is important to understand all of your options and the potential consequences of each one. Subchapter V of the Bankruptcy Code offers several benefits that may make it the best option for you.

If you are a small business owner considering bankruptcy, it is important to speak with an experienced bankruptcy attorney who can assess your situation and advise you on the best course of action. Bankruptcy is a complex area of law, and there are many factors to consider before filing for bankruptcy. An experienced bankruptcy lawyer can help you understand the pros and cons of bankruptcy and determine whether it is the right option for your small business. Call us today at (501) 891-6000 to get the legal help you deserve.

The post What To Know About Subchapter V Of The Bankruptcy Code appeared first on wh Law .