A sudden drop in revenue caused by an external event can cause financial instability and decrease the longevity of small businesses. This is true for 31.7 million of them. Recent changes to Subchapter V of the Chapter 11 Bankruptcy Code were made to allow commercial businesses with fewer than 1,500 employees or more than $7.5 million in debt to be eligible for bankruptcy protection.
What Is the Process for Filing for Slight Business Bankruptcy Relief?
The court appoints an impartial trustee who will mediate and establish a consensual agreement between the debtors and creditors. The debtor must pay the trustee. The trustee can investigate the financial affairs of the debtor, but that is not their primary function. The trustee is responsible for all aspects of the debtor’s business operations and assets.
The debtor must file a plan of reorganization within 90 days of filing. It must include a brief history of all business operations and a liquidation analysis. All projections must also be included in the plan of payments. The program is not required to be accepted by creditors, unlike a Chapter 11 bankruptcy. A plan may include projected disposable income, which covers maintenance, support, and spending on business operations. It also includes a 3- to 5-year payment plan.
Consult a Trusted, Local Bankruptcy Attorney
Without an experienced attorney on your side, navigating a small-business bankruptcy process can be complicated and time-consuming. Trusted attorneys are familiar with all aspects of Maryland’s bankruptcy code. Call Bruner Wright today if your Maryland business is experiencing financial difficulties.
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee! Trey is one of the founding partners of Bruner Wright, P.A., Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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