Adjustments to certain dollar amounts in the Bankruptcy Code may affect your decision and strategy to either file a bankruptcy or in defending certain actions filed against you or your company. The automatic adjustments to the dollar amounts in various provisions of the Bankruptcy Code, 11 U.S.C. 101 et seq. went into effect on April 1, 2013. You may access the official forms by clicking the following link to the United States Courts:
The following highlights some of the noted changes in the Bankruptcy Code:
Small Business Debtor: The Bankruptcy Code permits a person engaged in commercial or business activities (excluding a person whose primary activity is the business of owning or operating real property or activities incidental thereto (that has aggregate non-contingent liquidated secured and unsecured debts as of the filing of a bankruptcy in an amount which has been increased not to exceed $2,490,925.00 (excluding debts owed to one or more affiliates or insiders). The filing of a Small Business Chapter 11 has both advantages and disadvantages and one must consult with a professional to determine what is the best option for you.
Involuntary Bankruptcy: Did you know that an involuntary bankruptcy case may be filed against you or against a debtor under Chapter 7 or 11 of the Bankruptcy Code? There are various restrictions and requirements to file an involuntary case against a person. In addition, an involuntary case against a person may be filed by three or more entities, each of which holds a claim against the debtor that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount, or an indenture trustee representing such a holder, if such non-contingent, undisputed claims aggregate at least in an amount that has been increased to $15,325.00 more than the value of any lien on property of the debtor securing such claims held by the holders of such claims. Again, there other provisions which must be reviewed carefully before an involuntary bankruptcy is filed against any person and you should consult with a professional before embarking on such a course of action.
Location of Trustee lawsuits: A trustee in a case under the Bankruptcy Code, pursuant to 28 U.S.C. § 1409 may commence a proceeding arising in a related to such a case to recover a money judgment or property worth less than the following amounts which have been increased: (1) money judgment of or property worth less than $1,250.00, (2) a consumer debt less than $18,675.00 or (3) a non-consumer debt against a non-insider less than $12,475.00. If the amounts sought by the trustee is less than the amounts noted than the lawsuit must commence in the District Court for the District in which the defendant resides.
There are various other changes which are now effective April 1, 2013 which are identified in the link above, including various pending changes in the Official Bankruptcy Forms. Before taking a course of action you should meet with the appropriate professionals both legal and financial to determine the best way to proceed.
This blog has been prepared for informational purposes only and is not offered, or should be construed, as legal advice