In the new year, businesses in debt will have new options to help keep the doors open and get debt relief. Last month, President Trump signed a bi-partisan bill into law that amends Chapter 11 of the bankruptcy code to allow businesses with less than $2.7 million in debt to file a special reorganization plan, which will be known as a Chapter 11(V). Until now, a business’s only option was to file either a regular Chapter 11, which can be costly, or file a more affordable Chapter 7
, which requires them to close up shop.
A Chapter 11(V) is a more affordable solution because the bankruptcy estate is administered by a standing trustee, similar to a consumer Chapter 13 case. Additionally, there is no creditors’ committee, which makes the case less complex. The new law takes effect in February 2020.
Michael A. Cibik, Esquire
Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few bankruptcy attorneys in the Philadelphia area certified by the American Bankruptcy Board.
If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.