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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. 15, 2020
A typical Chapter 11 bankruptcy allows a business to continue in operation while its debt is restructured. However, this remedy is often disadvantageous to small businesses due to its strict reporting requirements, creditors committee involvement and potentially high administrative costs. The Small Business Reorganization Act (“SBRA”), which went into effect in 2020, provides a lower-cost, simplified restructuring process designed for small businesses — those with debt of less than $2.7 million.
In addition, the Coronavirus Aid, Relief and Economic Security Act (“CARES”), enacted on March 27, 2020, makes the new SBRA remedy available to a larger class of business debtors by temporarily increasing the debt-eligibility limit to $7.5 million. This expanded eligibility only lasts for a year.
The SBRA added Subchapter V to Chapter 11, creating a streamlined procedure that allows small businesses to pay off a portion of their unsecured debts under a three- to five-year reorganization plan. Among other features, Subchapter V:
- Provides that only the debtor can propose a reorganization plan
- Does not require a disclosure statement
- Usually does not involve appointment of a creditor committee
- Allows approval of a business reorganization plan even if creditors raise objections
- Eliminates many of the reporting requirements that Chapter 11 places on debtors
- Allows for administrative and court expenses to be paid over the life of the plan rather than in a lump sum up front
- Allows easier modification of loans secured by a principal residence
Although a trustee is appointed for every case, the trustee’s role is only supervisory, with no active involvement unless a dispute arises that needs resolution in order for the Subchapter V process to continue.
Once the Subchapter V plan is successfully completed, the remainder of the business’s unsecured debt is discharged.
If you are a small business owner in financial distress, you should consider contacting a bankruptcy attorney to see if SBRA is a remedy suitable for your situation. Remember, you have to act before March 27, 2021 to avail yourself of CARES’ expanded debt limits for eligibility.
If you are having serious financial problems, talk to an attorney at the Law Offices of James C. Zimmermann. We may be able to help you get back on track through bankruptcy or other debt relief options. Arrange a free consultation by calling 973-764-1633 or contacting us online. Our New Jersey offices are conveniently located in Hackensack, Vernon, Wayne, Pompton Lakes and Nutley.
