Resource
Prepare to file for bankruptcy during the pandemic
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Bankruptcy may be a legal tool for an individual or business in distress when other alternatives have been exhausted, such as restructuring, out-of-court negotiations with landlords and lenders, and preserving or obtaining cash through government programs. For some small businesses planning to shut down, bankruptcy is not needed. Instead, they simply cease to operate.
The most common types of small business bankruptcy include Chapter 7 and Chapter 11 – both stop creditors from continuing to collect while giving the individual or business time to plan a reorganization and renegotiate. Currently, the Small Business Reorganization Act (SBRA) amends Chapter 11 to streamline and simplify bankruptcy under a new section 5 for smaller businesses.
RESOURCES
- Umbrex Episode 240: Daniel Weiner Options for Distressed Businesses
- Guide to gathering documents for bankruptcy – NOLO.com
- Chapter 7 Bankruptcy Document Checklist – thebankruptcysite.org
- United States Courts – bankruptcy forms
- Estimate Insolvency – determine whether you qualify for bankruptcy
- Changes to Bankruptcy Under the CARES Act – Varnumlaw.com
- Small Business Reorganization Act (SBRA) May Help Small Companies Weather COVID-19 – Law360.com
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