Due to COVID-19, all consultations will take place via video, phone, or email. Please don’t hesitate to call or submit a contact form to set up an appointment. Thank you and stay safe.

The Small Business Reorganization Act of 2019

File Chapter 11 Via Subchapter V

Historically, large businesses and corporations have used Chapter 11 Bankruptcy to reorganize debt and set up a new financial business model. Because it is the most expensive form of bankruptcy, however, small business owners haven’t seen similar benefits. They have run into endless legal roadblocks and, ultimately, failed to create a repayment plan with creditors that allows them to continue running their business.

The Small Business Reorganization Act of 2019 addresses these obstacles. Effective on February 19, 2020, small business owners have exclusive access to Subchapter V of Chapter 11 Bankruptcy. It is tailored to their needs and limited resources, streamlining the entire process to help small businesses recalibrate their finances and achieve a new beginning.

How Is Chapter 11 Changing for Small Business Owners?

Chapter 11 Bankruptcy has not been easy for all business owners. Without the resources and capital typically found in a large corporation, the costs and complex procedures have proven too difficult to overcome. With the Small Business Reorganization Act of 2019, however, this may no longer be the case. Our lawyers at LSS Law are fully prepared to help small business owners take full advantage of Chapter 11’s new subchapter.

What Are the Beneifts?

If you are a small business owner, here are a few powerful benefits of Subchapter V:

  • You create and file your repayment plan. Previously, you would have been at the mercy of your creditors or a trustee. Although the court will appoint a trustee for your case, you will most likely retain full control and decision-making power.
  • Your creditors do not get to approve or reject your plan. In a typical Chapter 11 case, the court or trustee would establish a committee of creditors, and they would vote on whether your repayment plan was sufficient. Obtaining creditors’ approval was one of the major roadblocks to success for small business owners before the act.
  • The court may cramdown your unsecured debt. So long as your repayment plan outlines your use of all projected disposable income, the court can cramdown (i.e. lessen/discharge) outstanding debt without your creditors’ approval. Furthermore, the act eliminates the Absolute Priority Rule, which previously prevented you from keeping your assets if you can’t repay your debt in full.
  • You may be able to modify your mortgage. If you used a residential mortgage from your primary place of residence in connection with your business, the court may modify the interest rate, maturity, or principal of the mortgage.

Despite these potential advantages, successfully filing Chapter 11 Bankruptcy will require prior knowledge, relevant experience, and legal prowess. LSS Law believe small businesses are the backbone of the American economy, and we want to play a role in helping your business overcome today’s financial hardship and thrive for years to come.

Contact Our Small Business Reorganization Attorneys

Your business began with a vision, and coming to terms with current financial affairs may be painful. But we have full faith in your ability to surmount these challenges and turn that initial vision into a reality. To learn more about how Chapter 11 Bankruptcy may be the new beginning you need, get in touch with our legal team today.

Specialized Experts The Small Business Reorganization Act Chapter 11

The often times difficult Chapter 11 bankruptcy that traditionally favored larger companies is now available for small businesses through The Small Business Reorganization Act. Allows us to help you build a comprehensive strategy to navigate the process with the help our recognized team.

Real Client Experiences

  • “Excellent company to work with providing timely advice and guidance.”

    - Diane A.

  • “.... very attentive, patient and knowledgeable”

    - Tavy B.

  • “Well prepared, great attention to detail, and very empathetic to my needs.”

    - Walter L.

  • “I felt extremely well represented [by LSS Attorneys] during the whole process.”

    - Philippe K.

  • “[A]n amazing attorney to work with, extremely thorough, hands on and always available for any questions or concerns that you have.”

    - Katherine S.


Are You Ready for a Brighter Future?

Contact us 
for a free 
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.