24 Hour Toll Free Help

Small Business Case

Small Business Case

Under 11 U.S.C. § 101(51C), the small bankruptcy business claim is identified as a case which has a "small business debtor". How does a filer know if they have small business debts?

The United States Bankruptcy Code outlines a 2 part test:

  • Is the business debtor involved in business or commercial activities (with the exception of primarily owning and operating real property) with liquidated, non-contingent unsecured and secured debts of $2,190,000 or less?
  • Has the U.S. Trustee appointed a creditors' committee, and if they have not, has the United States Trustee decided the creditors' committee is unable to sufficiently oversee the debtor (11 U.S.C. § 101(51D))?

To prepare the Chapter 11 Bankruptcy small business case the debtor in possession must provide: the most recent prepared balance sheet, cash-flow statements, a statement of operations and the most recently filed United States tax return. All documents must be attached to the Chapter 11 Bankruptcy petition. If the documents are not provided a statement for the reason of their absence must be provided. Under 11 U.S.C. §§ 308, 116, the Chapter 11 Bankruptcy small business debtor must also provide documentation to the bankruptcy court outlining their projected cash receipts and disbursements and their profitability analysis. The debtor must also provide reports about their tax status and whether or not all of the business tax returns have been filed.

The United States Trustee provides additional oversight for a small business Chapter 11 Bankruptcy including: 1) evaluating the debtor's viability; 2) reviewing the debtor's business reorganization plan; 3) outlining and explaining the requirements for filing the debtor's bankruptcy reports and 4) monitoring the debtor's business activities throughout the duration of the bankruptcy case.

Small business bankruptcy claims generally can be resolved more quickly than large business bankruptcy claims. Small business debtors can create and file their Chapter 11 Bankruptcy reorganization plan during the first 180 days. This is considered an "exclusivity period" and although it can be extended up to 300 days, it can not be extended as long as other business cases which can be lengthened up to 180 if the bankruptcy court determines there is cause.

More Help on Small Business Case

  • Chapter 11 Bankruptcy - Unlike Chapter 7 Bankruptcy which liquidates the debtors non-exempt assets, Chapter 11 Bankruptcy allows the Debtor (which is generally a corporation or partnership) to restructure their debt obligations and continue to operate their business (although the business is supervised by the bankruptcy court and should be managed and operated for the benefit of the creditors). - read more

  • Creditors Committee - A Creditors\' Committee, appointed by the U.S. Trustee, represents the interest of unsecured creditors, bondholders, retirees or security holders in a Chapter 11 Bankruptcy reorganization (some small business cases do not require the U.S. trustee to appoint the committee). - read more

  • Liquidation - Chapter 7 Bankruptcy is known as a \"liquidation\" bankruptcy and creditors will be paid from the liquidation of the debtor\'s assets. - read more

Chapter 7 and Chapter 13 Bankruptcy Help

The two most common consumer bankruptcies are Chapter 7 and Chapter 13, our sponsoring lawyers handle these types exclusively so you can be sure you are getting accurate legal advice when you file bankruptcy. Our Bankruptcy attorneys will fight to protect your rights and your property, fight the aggressive and annoying creditors for you, and they can help you keep your home, vehicles and other property.

A lawyer will be committed to getting you debt relief and providing you with valuable information, services and advice to get you a better financial future. There are many convenient locations to make filing bankruptcy or learning about the alternatives we offer, even easier.

Get Help Now

Recent Bankruptcy Articles

  • Home Equity and Bankruptcy
    If you have equity on your house, then it is possible to use that equity in order to pay off your Chapter 13 bankruptcy at a much faster pace.
    - read more

  • Fair Credit Reporting Act
    The primary purpose of the Fair Credit Reporting Act is to ensure fairness and accuracy of credit reporting, and that the procedures followed are reasonable.
    - read more

  • Most Common Reasons for Bankruptcy
    A list of ten most common reasons people usually file for bankruptcy, including harassment from creditors and to end wage garnishments.
    - read more

  • Student Loans and Bankruptcy
    According to new changes, your student loan will only be discharged if the bankruptcy court is convinced that paying back the loan would bring about undue hardships for you or the people who are dependent on you.
    - read more