This alert summarizes these changes to the law and when they take effect. For a fuller discussion of the SBRA, please see Joe Ammar's recent article in the Michigan Bankruptcy Journal. New bankruptcy laws for small business debtors. On February 19, , a new . Forms effective April, CARES Act Changes On March 27, Congress passed and the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Section of that legislation made several changes to the Bankruptcy Code, most of them temporary, to provide financial assistance during the coronavirus crisis. Oct 02, · New Bankruptcy Law to Change Chapter 11 Filing for Small Businesses October 2, Chapter 11 bankruptcy is frequently referred to as a “reorganization” bankruptcy that usually involves “a corporation or partnership.” In other words, companies are given a second chance to stay in business by reorganizing to repay creditors over a set.
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The new statute has important implications for businesses. SBRA is aimed at simplifying the bankruptcy process for small businesses by increasing efficiency, lowering costs, and easing the plan confirmation process.
This statute was a great idea before the economic tsunami we are experiencing but now it is a real blessing. The legislation was designed to address several concerns that are part of the existing Chapter 11 procedural requirements.
This statute, Chapter 5 is designed to ease some of the burdens that certain mechanical processes in the typical Chapter 11 reorganization require of an entity filing a petition for relief under the United States Bankruptcy Code. In the past, Chapter 11 had a low percentage of success and filers were often forced to convert their Chapter 11 petition to a Chapter 7 liquidation plan.
Several changes to bankruptcy laws are in effect for The changes were decided during a legislative meeting in Q3 of with two reforms being introduced the 1st of the new year. The first reform relates to the Swiss Debt Enforcement and Bankruptcy Act while the second reform—also referred to as an amendment—is related to the Federal Act on Private International Law.
In the newest reform that was enacted on January 1st, debt collection offices will no longer be able to offer information on debt collection proceeds to a third party. This is especially prevalent when a debtor requests a 3-month notification payment order. Now, this information will be available if the creditor proves with a day deadline. For the revisions of the Federal Act on Private International Law, the current legislation previously enforced strict conditions to foreign decision of bankruptcy.
These specific restrictions actually slow down the court, preventing the case from reaching its verdict. However, the new amendments will make all foreign bankruptcy court proceedings run smoother, faster, and with effective coordination of insolvency. Luckily, these new changes to bankruptcy laws will not affect the processes behind filing for bankruptcy. In fact, the new tax laws that were introduced in already influenced the way we used to file for bankruptcy, with a focus on businesses.
However, on Aug. Gerdano said in a press release. Under SBRA, each case will be handled by a trustee with powers similar to the powers enjoyed by Chapter 12 and 13 trustees. SBRA also changes the treatment of administrative expense claims, such as post-petition trade credit. Unlike other Chapter 11s where all unpaid administrative expense claims must be paid when due or on the effective date of a Chapter 11 plan, in small business cases, the debtor can stretch out payment of administrative expenses over the term of the Chapter 11 plan.