Subchapter 5 Bankruptcy Attorney in Rockland County, New York

If you need a Subchapter 5 Bankruptcy attorney throughout Metropolitan New York and Maryland in response to the current coronavirus pandemic and its devastating effect on many small businesses, The Lauterbach Law Firm is here to help. Subchapter 5 is a new and innovative form of bankruptcy designed to help small businesses. Our firm offers a free virtual consultation to see if we can help your business reorganize under Subchapter 5 in order to both survive and thrive.

In August 2019, Congress enacted the Small Business Reorganization Act (SBRA), effective February 19, 2020, which added a new Subchapter 5 to Chapter 11 of the United States Bankruptcy Code. The goal of Subchapter 5 is to help small business owners reorganize in a more expeditious and less costly manner. Contact us to learn more about how we can help you.

Who Can Benefit From a Subchapter 5 Bankruptcy?

Originally limited to businesses with $2.7M in total secured and unsecured debt, the Coronavirus Aid, Relief and Economic Security Act (“CARES ACT) temporarily raised that ceiling to $7.5M, but that increase expired on June 21, 2024, and the limit for cases filed on or after April 1, 2025 is $3,424,000 as adjusted under 11 U.S.C. § 104. Small businesses are required to show that at least half of their pre-petition debts arose from commercial business activities. Additionally, businesses whose primary activity is owning “single asset real estate,” meaning they derive substantially all income from the operation of a single piece of real estate, are among those excluded from Subchapter 5 under 11 U.S.C. § 1182(1).

How Do I File?

Subchapter 5 is a streamlined form of Chapter 11 of the Bankruptcy Code. It is initiated by filing a Chapter 11 petition and electing Subchapter 5. The small business debtor then files documents with the court, including a recent balance sheet and statement of operations. A plan of reorganization must be filed within 90 days from the date of filing the petition. A Subchapter 5 U.S. trustee is appointed to oversee the small business debtor’s plan of reorganization.

Where Rockland County Businesses File

Rockland County businesses file in the White Plains division of the Southern District of New York, at 300 Quarropas Street, which also serves Westchester County.

Advantages of Subchapter 5 Bankruptcy

Subchapter 5 offers a more efficient and economical vehicle to negotiate a Plan of Reorganization with your creditors, including:

No quarterly U.S. trustee fees;
No unsecured creditor committee;
No absolute priority rule. Equity holders maintain their equity in the company without needing to add new capital;
Reorganization plan confirmation is possible without agreement by creditors as long as criteria are met that include equitable treatment of creditors.

At the Lauterbach Law Firm, we’ll review your company’s business and specific issues it is encountering to determine if Subchapter 5 is a viable vehicle to help your business survive. Our experienced bankruptcy attorneys will guide you through the entire process from filing to confirmation of a Subchapter 5 Plan in order to emerge as a leaner and more successful business.

Contact Our Rockland County Subchapter 5 Bankruptcy Attorney

We know how important your business is to you, and we are equipped to assist you through every step of the Subchapter 5 bankruptcy process. Contact The Lauterbach Law Firm today to learn more about what we can do for you.