Congress is considering the extension of Subchapter 5 in Chapter 11 bankruptcy to help small businesses. When you take into account the continuing effects of the pandemic on small businesses, this extension is essential.
Extending Subchapter 5 to Support Small Businesses
In 2019 Subchapter 5 was added to Chapter 11 of the U.S. Bankruptcy Code with the goal of making reorganization bankruptcies more accessible to small businesses. It went into effect in 2020 and as the pandemic continued to wreak havoc on millions of small businesses, Subchapter 5 was being applied. At the time owners with $2.75 million or less in debt could apply for bankruptcy.
