Three bills passed in 2019 will see changes to established bankruptcy law for small businesses, veterans and farmers. These bills are discussed briefly below.
The most discussed of the above changes were written into law via H.R. 3311, the “Small Business Reorganization Act of 2019” (SBRA), which will come into effect in February 2020. This bill is intended to help small businesses better access to chapter 11 bankruptcy.
This bill added a new sub-chapter to the chapter 11 bankruptcy defining a “small business debtor” and set aside special provisions for debtors falling into this category.
Business owners owing less than $2,725,625 in business debts may wish to consider seeking counsel to find out if they qualify as “small business debtors” under the new chapter 11 provisions.
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In another bankruptcy law change for 2020, veterans who file for bankruptcy will no longer need to count their Veterans Affairs or Department of Defense disability payments towards their income as required by the bankruptcy means test.
This change came into effect immediately upon passage of H.R. 2938, the “Honoring American Veterans in Extreme Need Act of 2019” (HAVEN Act) in September of last year.
Finally, in light of increased difficulties faced by American farm owners trying to repay farm loans, H.R. 2336, the “Family Farmer Relief Act of 2019” changed the limit on farm debt covered by chapter 12 bankruptcy from $3,237,000 to $10,000,000.
This change is expected to help family farms restructure and remain in operation during economic downturn in this sector.
With these changes in place, Santa Clarita residents and business owners may find new doors open to them when trying to access the bankruptcy process.
Individuals and businesses in Santa Clarita who feel these new laws may affect their planned bankruptcy proceedings can count on Louis J. Esbin to guide them through these new laws, and any other changes that 2020 has in store.
Louis J. Esbin founded his law firm and has been practicing in Santa Clarita, California and Canyon Country, Valencia, Saugus, Stevenson Ranch, Newhall and Castaic neighborhoods since 1993, where he provides Bankruptcy Law, Corporate Formation Law, Transactional Law, Merger & Acquisition Law, and Commercial Law services to clients throughout California and other states.