HomeWhat Does The New Chapter 11 Subchapter V Mean For Your SBA Loan?

What Does The New Chapter 11 Subchapter V Mean For Your SBA Loan?

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Many business owners think failing to repay business debt means: your business is over.

This simply isn’t true. Business debt is a problem which CAN be handled, just like everything else; but only if you take pro-active steps. Lawscape helps you understand the law, and works with you to make sure that business debt isn’t the end of your business. 

What Are Some Ways We Can Help With Business Debt Relief?

Our experienced business debt relief consultants are here to help you through this stressful time. 

All set? Alright, let’s delve into this new fascinating piece of legislation that could be a real game-changer for you: The Chapter 11, Subchapter V. This new addition to bankruptcy law is targeted specifically at helping small businesses to reorganize their debts in a painless, speedy, and budget-friendly manner. The law is quite the talk of the town these days, so let’s have a closer look at what it brings to the table.

The Latest Lifesaver on the Block: Chapter 11 Subchapter V

This newly minted option for SBA loans that have hit a rough patch looks pretty promising on paper. The Chapter 11 Subchapter V has notable differences from the standard Chapter 11 bankruptcy process. Here’s the abridged list:

  • It’s simpler to confirm plans
  • Only the debtor can file a plan
  • No need for the disclosure statement
  • Contested plans can be confirmed despite objections from an impaired class
  • The absolute priority rule is not applicable anymore
  • No creditors committee
  • Forget about those quarterly U.S. Trustee payments

With these modifications, you can expect a speedier and consequently less expensive reorganization for your small business. Basically, Chapter 11 Subchapter V can be your lifeline to keep your business afloat in this uncertain economic climate.

How Does It Compare with the Traditional Chapter 11?

Back in the day, regular Chapter 11 bankruptcies were a pain. They were not only heavy on the pocket but also had a success rate of nowhere near 50%. Therefore, if your business is struggling and the main chunk of your debt is due to an SBA loan, this new Chapter 11 Subchapter V bankruptcy could potentially be your knight in shining armour.

The Biggest Win: Modifying Lien on Your Primary Residence

The greatest payoff with this new bankruptcy procedure could be the ability to modify your SBA related loan. If you’ve pledged your main residence as collateral for your SBA loan, unfortunately, neither Chapter 7 nor Chapter 13 bankruptcy is going to be of much rescue in case of default. However, Chapter 11 Subchapter V might!

Here’s how it works: a small business debtor’s plan could modify a creditor’s rights if the new value received was not mainly used to acquire the real property, but primarily in association with the debtor’s small business. So, you might be able to leverage Chapter 11 Subchapter V to hold onto your home and alter the repayment terms of the loan. Though you probably won’t be able to escape the lien completely, saving your house would be a triumphant victory!

Ring Up Lawscape from Lawscape

If you’re in San Diego County and think your small business might benefit from filing bankruptcy, don’t hesitate to get in touch with us. Lawscape and his team at the Lawscape can help your business navigate through these challenging waters.

We edge out other lawyers with our proven track record in handling SBA loan and Treasury collection cases across the country. Whether through out-of-court negotiations, compromise offers or structured workouts, we strive to come with the best solutions for your SBA loan miseries.

Also, if you’re grappling with an SBA lender lawsuit in San Diego, Orange or L.A. County, we can throw in our expert litigation or bankruptcy assistance as well.

Why Choose Lawscape to Handle Your Treasury or SBA Debt Problems?

Over the years, we’ve resolved millions of dollars in SBA and Treasury debts through Offer in Compromise and negotiated repayment agreements, thus saving our clients from bankruptcy or home foreclosures. We’re also particularly adept at fending off Treasury debts via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, and other means.

The Agency Practice Act has empowered our attorneys to represent federal debtors all over the U.S. before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

So, if you’re dealing with SBA debt or Treasury debt collection issues, feel free to contact us. We can review your case and suggest the best potential solutions. We’re here to help; your success is our victory.

(Note: Certain images used in this presentation come under a Creative Commons License. Head over here to see the full list of images and attributions).

All set? Ready to face the shark? Hurry up and contact the Lawscape now!

Lawscape Can Help You Manage Your Business Debt

If you’re struggling with business debt, we can help you understand your situation. During the initial consultation, we’ll go over the contract, and other legal documents you signed. After that, our firm will work with you to get a better understanding of your situation, and help you come up with a game plan that keeps your business alive. 

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Everyone has different types of business debt. What matters is that you take it seriously. Regardless of whether it’s secured, or unsecured, you need to work with a firm that understands how to negotiate, reduce, settle, and manage, this business debt. 

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