Business Bankruptcy Attorney in New Jersey

When you do not think your business can survive or can only survive if eliminating or reorganizing debt will help it continue to operate, the federal bankruptcy laws can be a useful tool.

A business in financial trouble must weigh both bankruptcy and non-bankruptcy state court options.

If the business can no longer operate, consider whether a Chapter 7 Bankruptcy or a state court insolvency procedure called an assignment for the benefit of creditors is the better option then just stopping operations.

SMALL BUSINESS  CHAPTER 11 AND SUBCHAPTER V CASES IN NEW JERSEY

If you believe you can continue to operate the business but need some breathing room to deal with your creditors, weather the storm of high costs, inflation, changes in your market and the other challenges, a Chapter 11 bankruptcy or the new Subchapter V of Chapter 11 may be the answer.

The Small Business Reorganization Act of 2019 (SBRA) added Subchapter V to Chapter 11 bankruptcy laws. Congress wants to see small businesses recover and be profitable.

If your company did not sell stock to the public, it is able to use Subchapter V for help.

Many businesses can survive these drastic (but temporary) financial problems like a sudden change in the market, customer base or a drop in cash flows or just bad luck. It may be possible to reject expensive contracts and retail commercial or industrial leases.

Subchapter V has debt limits. Until June 21, 2024, the debt limit for Subchapter V eligibility is $7,500,000.00. This helps more pandemic-affected businesses with larger debts. After this date, the Subchapter V bankruptcy debt limits will be reduced to $2,750,000.00. Businesses owing more than this amount will no longer be eligible for Subchapter V bankruptcy.

Any business seeking to reorganize in Chapter 11 or the new Subchapter V must be prepared to move quickly by developing a strategy with its attorney. How will the business reorganize? When will a plan of reorganization be filed with the Court? How will you change the business’ focus? What is the right choice for your business?

Let’s discuss this further. Give my office a call today for your free 1-hour, no obligation consultation.