Gillespie & Murphy, P.A.
Call For A Free Consultation : (252) 558-1374

UPDATE: To protect your safety during the coronavirus (COVID-19) crisis, we offer telephone conferences, in place of face-to-face meetings. Please contact our office today to set up a remote consultation.

“10% off Chapter 7 and 13 bankruptcy filings” - More details

Small business bankruptcy in a time of COVID

The coronavirus pandemic has hit one sector of the economy particularly hard: small businesses. Staying afloat can be challenging even in a favorable economic climate. The COVID downturn has had a crushing impact on small business owners across the country, with many shuttering their doors permanently. For some, bankruptcy is the only way out.

Fortunately, there is a glimmer of good news amidst all the bad: Recent changes to federal bankruptcy law have made it more accessible, less expensive and less time-consuming for small businesses to reorganize through bankruptcy.

Business bankruptcy

Chapter 11 bankruptcy - which allows businesses to reorganize, establish a realistic payment plan and, hopefully, re-emerge profitably - is notoriously complicated, time-consuming and expensive. The Small Business Reorganization Act of 2019 (SBRA) created a streamlined alternative for businesses with less debt. Subchapter 5 bankruptcy allows small businesses to pursue reorganization on a faster timeframe. This path is far less complicated and costly than a full-fledged Chapter 11 bankruptcy.

However, businesses can only qualify for Subchapter 5 bankruptcy if their debt is under a certain limit. As originally set out in the SBRA, that limit was $2.725 million. Congress raised that limit to $7.5 million with the recently enacted Coronavirus Aid, Relief and Economic Security Act (CARES Act). This change - which will last a year - allows more businesses to take advantage of a simpler, faster and less expensive bankruptcy reorganization.

Act now to consider your options

Because of the limited timeframe for the lower debt limit, now is the time to consider Subchapter 5 bankruptcy if your business is struggling. Speak with an attorney about your options.

No Comments

Leave a comment
Comment Information
Attorneys Email Us For A Response

Need Help?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Four Different Locations To Serve You Schedule an appointment at our New Bern, Wilmington, Greenville, or Jacksonville office.

Wilmington Office
321 North Front Street
Wilmington, NC 28401

Phone: 252-558-1374
Fax: 910-254-3444
Wilmington Law Office Map

Gillespie & Murphy, P.A.
320 Middle Street
New Bern, NC 28560

Phone: 252-558-1374
Fax: 252-636-0625
New Bern Law Office Map

Jacksonville Office
200 Valencia Drive, Suite 119
Jacksonville, NC 28546

Phone: 252-558-1374
Jacksonville Law Office Map

Greenville Office
101 W 14th St, Suite 101
Greenville, NC 27834

Phone: 252-558-1374
Greenville Law Office Map