Small Business Bankruptcy Lawyers in Seattle
Obtaining Financial Relief Under Subchapter V of Chapter 11
Is your small business struggling to turn a profit because of substantial debt? This may be particularly upsetting if your company is the culmination of a lifelong dream. You likely anticipated a few years of hardship but might not have expected this endless degree of financial struggle. Especially because of the COVID-19 pandemic, millions of small business owners like yourself are currently asking the same question: Do we keep fighting, or do we cut our losses?
Fortunately, a new option just became available under Chapter 11 bankruptcy: Subchapter V. This section is the result of the Small Business Reorganization Act of 2019, and it took effect in February of 2020—just in time to help small businesses struggling with the financial ramifications of the pandemic. Subchapter V may be a gamechanger for your business because it eliminates many of the obstacles that would have prevented you from achieving relief through traditional Chapter 11.
At Henry & DeGraaff, our small business bankruptcy attorneys can assess your situation to determine:
- Your small business’s eligibility for Subchapter V; and
- Whether Subchapter V is the solution your small business needs.
If Subchapter V is right for you, we can help you file with maximum efficiency and precision. We have years of experience helping business owners survive financial hardship, and we look forward to putting this experience to work for your livelihood.
Subchapter V is a streamlined, cost-effective reorganization process, eliminating many of the obstacles that made Chapter 11 nearly impossible for small businesses. To qualify as a small business under Subchapter V, you must owe no more than $2,725,625*, at least 50% of which was accrued through commercial or business expenses.
Under Subchapter V, small business bankruptcy will NOT need to involve:
- Disclosure statements
- Creditors’ committees
- Plan approval by creditors
The elimination of these requirements and procedures reduces both the time and cost of the entire filing process. Additionally, Subchapter V does not enforce the Absolute Priority Rule, which would normally prevent you from retaining ownership interests unless all your creditors are repaid in full. Without the Absolute Priority Rule, you have a greater chance of keeping your business assets AND reducing your financial obligations.
Like Chapter 13, Subchapter V will require you to make monthly payments for 3-5 years using all your disposable income. Once you complete this plan, you should become eligible for a debt discharge, in which the court cancels your legal obligation to repay certain debts.
*The maximum amount of debt you can owe while still qualifying for Subchapter V was temporarily increased to $7,500,000 under the Coronavirus Aid, Relief, and Economic Security Act. This threshold will return to $2,725,625 in March of 2021.
Experienced, Creative & Sophisticated
With years of experience between our attorneys, our goal is to deliver a higher level of service, only taking cases where we can add value.
We understand that no two cases are ever the same. We provide tailored solutions for every client and strategize in order to provide optimal results.
As a law firm that focuses on creative and collaborative solutions, we always seek opportunities that go even beyond the law to help provide the results you deserve.
Our ability to tackle complex issues has allowed us to win appellate decisions and push the law in our clients' favor. We pursue compensation arrangements that reward success.
While Subchapter V is much simpler than a traditional Chapter 11 case, a successful proceeding will require dedicated support from our experienced team. We are here to help you maximize the benefits and minimize the risks of bankruptcy. We know your small business means a great deal to you and your family, and we are ready to do everything in our professional power to help you protect what matters most.
It is my belief that we came out way ahead of the game but we owe the success to Jacob.- Kim & Mike
5 stars are not enough.- Joe
Jacob successfully took over our Chapter 11 bankruptcy case.- Jerry
Jacob was always focused on our needs and desires concerning our real estate.- Previous Client
If you need their services don't hesitate to give them a call.- Reese H.