As of April 1, 2016, changes to the U.S. Bankruptcy Code, announced by the Judicial Conference of the United States in February, became active. Cases filed after this date are subject to the updated bankruptcy code. While the changes are minute overall, businesses who are planning to file bankruptcy may find themselves more affected by these changes than they anticipated. Here’s what you need to know.
Consumer Deposit Priority
The consumer deposit priority under Section 507(a)(7) was raised from $2,775 to $2,850.
Filing a preference claim in a non-consumer debtor case under Section 547(c)(9) was raised from $6,225 to $6,425.
Employee Compensation & Benefit Contributions
Sections 507(a)(4) and 507(a)(5), both the employee compensation and employee benefit contributions were increased from $12,475 to $12,850.
Bankruptcy Venue Provision
28 U.S.C. Section 1409(b) states that actions to recover for non-insider, non-consumer debt be brought against defendants in their own residential district. The dollar amount has increased from $12,475 to$12,850.
In order to file an involuntary petition, total claims can no longer be under $15,325 and must be $15,775 or more.
The definition of small business debtor in Section 101(51D) has been raised to a total amount of $2,566,050.
Across the board, this is only about a 3% increase. However, businesses that intend to file bankruptcy may find that these changes significantly impact how their bankruptcy unfolds. Although there are some additional small changes to the U.S. Bankruptcy Code that also were enacted on April 1, 2016, they are less likely to affect businesses and more likely to have an impact on individuals.
When To Contact An Experienced Bankruptcy Attorney
Business bankruptcy can be exceedingly complex, and determining what you qualify for and what would be the best type of bankruptcy to file in your particular case is not always easy. If your business is struggling financially, especially in light of the new changes to the Bankruptcy Code, it is more important than ever to contact an experienced business bankruptcy attorney who can help guide you through the process of filing for bankruptcy.
Contact the Law Firm of Joel M. Aresty today to learn more about bankruptcy law and how these changes to the Code may affect your business. We are available now to assist you and can provide you the legal representation and support you need to move through each stage of bankruptcy. Call now for a consultation to discuss your specific case at (305) 904-1903 or toll free at 1-855 DOC LAWS.