The present harsh economic climate brought about by COVID-19 has impacted many businesses. Hence many companies are filing for Bankruptcy in Dallas TX. The government has signed legislation that seeks to provide some relief. It is in the form of a $2 billion stimulus package named CARES Act. Let’s look at the key provisions.
There is now midway between Chapter 7 and Chapter 11 filings. Businesses with less than $2,725,625 in debt can choose this feature.
Subchapter V is now revamped to be known as the “Small Business Reorganization Act of 2019” or “SBRA”. It allows a business to go through Chapter 11 filing without fulfilling all mandates of the same.
He can operate as a debtor-in-possession in collaboration with a trustee taking care of the financial reorganization plan.
The SRBA has also raised the eligibility mark from $2,725,625 to $7,500,000. This benefit is applicable only in the first year (till March 2021)
It seeks to lower job loss potential and liquidation possibilities.
For the purpose of calculating the disposable income of a wage earner under Chapter 13, the new legislation now deducts any payment made for the treatment of the COVID-19 virus.
Another amendment allows individuals to modify their wage earner restructuring plan under Chapter 13. This step is possible only if they prove they are facing hardships in the existing program, due to the COVID-19 infections
So the government is trying its best to offset the negative impact on the economy with this CARES Act. Get in touch with a competent attorney specializing in Bankruptcy in Dallas TX to know your chances.
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