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Mr Zimmerman was helpful and kind and prompt . He always answers his phone and that is refreshing . I will be using him for my bankruptcy in the future. He is one of the good ones . He is an outstanding attorney who truley care . He made ev...
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Mr. Zimmermann is a fantastic bankruptcy attorney who handled my case with care, efficiency and urgency. We were able to beat a judgement against me in the nick of time, and I truly feel a sense of relief due to the services of Mr. Zimmerma...
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This Lawyer will go above and beyond for you. As well as show tremendous empathy for those who are vulnerable and scared. His compassion to help civilian's shows through his actions and with his word. When he says he is going to call he cal...
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I’ve worked with Mr.Zimmerman on two different legal issues. In both instances he was fantastic! He is extremely knowledgeable and compassionate and able to breakdown a course of action into language anyone can understand. I would highly re...
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I highly recommend Mr. Zimmermann as an attorny. I recently purchased an investment property and boy was he helpful. He was easily available, very clear in explaining various concepts, laws and regulations, and provided very helpful tips o...
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- posted: Nov. 22, 2024
Congress took several steps designed to help American individuals and businesses survive the economic effects of the COVID-19 pandemic. Two programs in particular made it easier for people and companies to obtain certain forms of bankruptcy protection. However, these were enacted as temporary measures, and the bankruptcy law has now reverted to the pre-pandemic standards.
On June 21, 2024, the amount of debt that a party can have when filing for Chapter 13 bankruptcy or Chapter 11, Subchapter V bankruptcy dropped sharply from their COVID-era levels. This will affect a large number of individuals and small business owners seeking debt relief. The current rules for each program are as follows:
Chapter 13 bankruptcy — Through Chapter 13 bankruptcy, individuals with a steady income can establish a repayment plan that pays off their debts pursuant to a schedule lasting three to five years. Presently, the maximum debt for individuals seeking a Chapter 13 bankruptcy plan is now $1,395,875 in secured debts (such as mortgages and car loans) and $465,275 in unsecured debts (including credit card debt and medical bills). When eligibility was expanded due to the pandemic, the limit was increased to $2.75 million, which included both secured and unsecured debts.
Chapter 11, Subchapter V bankruptcy — Part of Chapter 11, Subchapter V is a streamlined bankruptcy option for small businesses. Introduced in 2019 under the Small Business Reorganization Act (SBRA), Subchapter V offers a faster, more affordable path for small businesses to reorganize their debts while maintaining operations. With the reversion to the pre-COVID standard, companies now must have $3,024,725 or less in debt to qualify under this provision. This is a sharp decrease from the $7.5 million limit used during the pandemic.
With these adjustments, debtors who might have been able to establish Chapter 13 or Subchapter V protection might now find themselves ineligible. Those whose debts exceed the current limits may need to explore other options, such as Chapter 7 bankruptcy for individuals or traditional Chapter 11 bankruptcy for businesses, which can be more complex and costly.
The expiration of the increased debt limits is a reminder that bankruptcy laws frequently change, affecting who qualifies for certain programs. Consulting an experienced bankruptcy attorney can help determine the best path forward for you under the current rules. An attorney can review your financial situation, explain the pros and cons of different bankruptcy types and ensure that your case is handled properly. If you are facing financial difficulties, seeking legal guidance early can help you make informed decisions and regain control of your financial future.
At the Law Offices of James C. Zimmermann, we assist New Jersey clients with a wide range of bankruptcy issues, including eligibility for Chapter 13 and Subchapter V proceedings. For a consultation, please call 973-764-1633 or contact us online. Our offices are in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley.
