IMPORTANT NOTICE: The Small Business Reorganization Act and the Cares Act

Many new laws have been passed to assist home and business owners during the COVID-19 virus pandemic.

The Small Business Reorganization Act and the Cares Act were passed to allow persons in business to move efficiently through a bankruptcy organization.

  1. Small Business Reorganization Act

            Highlights of this law include:

  • Debt limits are increased from $2,725,000 of debt to $7,500,000 (secured and unsecured). The increase ends on March 27, 2021.
  • Business owners retain full ownership even if unsecured creditors are not paid in full.
  • A faster process to approval by eliminating disclosure requirements.
  • Expenses are reduced.
  • Creditor voting on your plan is eliminated.
  • No Trustee fees.
  • No creditors can file a plan.
  • A court appoints the trustee to assist in obtaining a consensual plan.
  1. Cares Act and Consumers

          Highlights of this law include:

  • An extension of chapter 13 plans to seven years if a direct or indirect hardship exists. This includes unemployment due to the pandemic.
  • Stimulus payments are not included in your income calculations.
  • A possible decrease in some existing payments to creditors.
  • Federally insured mortgages must defer regular mortgage payments for six months or more upon request. This includes deferral or forbearance options.
  • DOE back student loans payments are suspended to September 30, 2020.
  • Current mortgage foreclosure forbearance.

Please contact Attorney James M. Nugent to discuss your options. Don't risk losing your home, business or other valuable assets.

Contact James M. Nugent