Helping Small Businesses Use Subchapter 5 To Their Advantage
The most common form of bankruptcy for businesses is Chapter 11. For small businesses, however, Chapter 11 can be unnecessarily complex. This is where subchapter 5 comes in.
Subchapter 5 bankruptcy allows certain businesses a simplified process by which they can pay down their debts. Since 1997, we at Giddens & Gatton Law, P.C., have assisted small business owners, shareholders, partners and other parties in New Mexico with all aspects of bankruptcy. When you need guidance about filing Chapter 11 or are interested in how subchapter 5 could help you, we can help.
What To Know About Subchapter 5 Bankruptcy
Subchapter 5 is a fairly new development in the world of bankruptcy law. It became part of the U.S. Bankruptcy Code in 2019 to make it easier for small businesses to file for reorganization bankruptcy. However, not every small business qualifies. You can only use Subchapter 5 if your business is still operating, you have debt under $7.5 million and at least half your debt is business debt.
What Are The Advantages For Small Businesses?
Subchapter 5 is appealing because it offers many benefits compared to standard Chapter 11. For instance:
- There is no need for creditor approval.
- You submit the repayment plan, not your creditors.
- You can continue operations.
- You do not have to file a disclosure.
- You make payments in installments.
The best way to initiate a bankruptcy petition is to seek counsel from knowledgeable bankruptcy attorneys. Our lawyers understand bankruptcy law inside and out, including whether you qualify and how to take full advantage of Subchapter 5.
Learn More About Your Options In A Free Consultations
If you are interested in using Subchapter 5 or another form of bankruptcy to get your debts under control, reach out to us at Giddens & Gatton Law, P.C.. To request a free initial consultation about your options, call our Albuquerque office at 505-273-3720 or send us an email.