This Is Much Closer to a Personal Chapter 13 and Much Less Expensive
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your bankruptcy questions with oklahomacitybankruptcyattorney.pro. I’m going to go right back to the well. Oklahoma Chapter 11, Small Business Reorganization.
I’m aiming at all of you who can benefit, not just from this act, but the COVID decrease in income and relaxed telephone hearings. Small business, I’ve got some bullet points. Excuse me, if I’m looking away from the camera, but this is a pretty new deal.
Small business, here’s the benefits that you can get. And there’s additional benefits from the CARES Act. I talked about that last time. You can have up to 7 million in debt, 5 million more than you normally would, and still be able to utilize the Small Business Reorganization Act.
What do you get from that? Here you go. Okay. Streamlining reorganization process. I’ve got my bullet points here. Normally you’ve got a creditor committee and any of them can nominate reorganization plans. And you’ve got to get yours confirmed by them, not the case.
Huge difference in a Chapter 11, only you, the business, get to even propose a plan and you can get the trustee to go with it. You’re okay. You don’t necessarily need the creditor committee of which there may not even be a creditor committee to approve anything. That streamlines thing., Certainly your unsecured creditors aren’t going to have a committee and the plan filing not six months, 90 day, so speeding up the process.
Elimination of the new value rule. It’s probably enough for a whole other video, but has to do with equity holders in the small business, have to put up new value to retain their equity interest. Anyway, that rule is done away with.
You’ll probably know what that is if it applies to you and all of your disposable income will be applied to payments. And you can modify certain mortgages, so we’re not talking about the same thing as in an Oklahoma Chapter 13 personal home mortgage, but if you’ve got loans on real property, mortgages on residential property that are being used for your business, you can modify those under certain conditions in this newly reorganized Chapter 11. Another great benefit.
You can delay your payment of administrative expense claims. Certainly comes in handy, if you get other crushing debt, the administrative costs associated with the bankruptcy can be spread out.
That’s a power, not typically granted in your normal Chapter 11, and you can get your discharged within three years of making all your planned payments. Again, very streamlined, speeded up process.
And the discharge will basically relieve the debtor, the small business, of any obligation under the debts discharged, unless it’s payable after the first three years of the plan.
SI can give you more details for any businesses that this may apply to, but again, the big thing streamlined, no credit, or committee, most of the time. Certainly no unsecured creditor to committee. You come up with the plan, not the creditor, so you don’t have to compete with them.
Again, this, as I’ve mentioned in other videos, this is much closer to a personal Chapter 13 and much less expensive, much less effort, and just a great help. This is a pretty big deal in bankruptcy.