What Is Robo-signing in South Florida Foreclosures?

Mortgage servicer Ocwen recently settled $11 million in relief to settle foreclosure misconduct claims, and over $2 million of that settlement went to homeowners in Florida. While the win was a big one for people that had unfairly lost their homes in the past, it is a reminder that mortgage servicers do not always act honestly and in good faith.

In 2013, Ocwen also settled another matter that involved robo-signing, a practice that is illegal in South Florida and throughout the country. Robo-signing is rampant in the mortgage industry, and borrowers rarely know that it is taking place. So, what is robo-signing and how can you use it as a defense if you are in fear of losing your home?

What Is Robo-signing?

Robo-signing was one of the worst loan servicing abuses that came to light during the housing crisis of 2008. At the time, the mortgage servicing industry was often condemned by both the courts and the media for falsifying affidavits in thousands of foreclosure cases. While the practice is an illegal and dishonest one, it did provide many homeowners with defense in their foreclosure case. Robo-signing does not happen as much as it once did, but that does not mean it does not happen at all. If you are in fear of foreclosure, it is important to know what robo-signing entails, and if it was a part of your case.

In judicial foreclosure states, such as Florida, the lender foreclosing on the home must show that the homeowner did not pay their mortgage for a certain period of time, and that the bank has standing. To have standing means the lender owns the mortgage.

To prove these elements of their case, the lender must submit certain documents and a written statement signed under oath, known as an affidavit, must be signed by someone that typically works at the bank or a representative of the lender. The person that signs the affidavit must carefully review all of the paperwork associated with the loan, and they should have some personal reason for believing the facts within those documents to be true. The purpose is to prevent a foreclosure from occurring if the lender did not have standing or if the homeowner was not actually behind on their mortgage payments.

In 2010, many employees who worked for the big banks testified that they engaged in robo-signing practices. These employees did not fully review the documents presented to them and they had no knowledge that either the bank owned the loan, or that the homeowner was behind to the degree the foreclosure papers indicated. These employees stated that they spent approximately 30 seconds on each affidavit and that they could not confirm the facts being presented within the documents. It is because the affidavits are signed so quickly and without real review that those who sign them are known as ‘robo-signers.’

What Impact Do False Affidavits Have on Foreclosures?

In order to lawfully foreclose on a property, lenders must ensure the foreclosure paperwork is accurate and that it has been reviewed properly. If an affidavit, or another document associated with the foreclosure, is not correct, the foreclosure should not be allowed. Any document signed by a robo-signer could be considered incorrect because they do not have the time to fully review it and ensure that the documents they are attesting to are accurate.

Now that the practice of using robo-signers is so common, judges in South Florida are starting to take a closer look at the affidavits being submitted during a foreclosure case. Although at one time, judges mainly relied on the affidavit and automatically assumed them to be true, now a judge will look through the paperwork themselves more often to determine that everything is in order.

How to Challenge a Foreclosure Based on Faulty Affidavits

The robo-signing scandal cast a shadow on the integrity of the paperwork involved in a foreclosure case and today, the courts are much more likely to examine bank foreclosure affidavits and other documents. Judges are typically more willing to listen to claims from the homeowner that certain documentation is false or incorrect. Fortunately, due to the fact that Florida is a judicial foreclosure state, it is quite easy to challenge a foreclosure based on faulty affidavits.

In judicial foreclosure states such as Florida, in order to foreclose on your home, the lender or servicer must file a lawsuit against you and argue their case in court. It is at this point that you can raise the defense that a robo-signer was used in your foreclosure case and that the documents are not correct. How do you know that a robo-signer was used in your case? This is one way in which working with a South Florida foreclosure defense lawyer is of great help. A lawyer will know what to look for, and how to fight back against these practices.

Suspicious documents also provide borrowers more room for negotiating during the foreclosure process. If you can cast doubt on the paperwork being presented, the lender may be more motivated to help you through a mortgage modification or other defense instead of taking the matter to court.

Another way to challenge a foreclosure based on faulty affidavits is during a Chapter 13 bankruptcy. When going through a Chapter 13 bankruptcy in Florida, all creditors must file a claim in order to ensure they will receive payments according to the borrower’s Chapter 13 repayment plan. This applies to mortgage lenders, as well. If the lender cannot provide the necessary documents to prove the debt and the fact that it was reviewed under sworn testimony, the borrower can oppose the lender’s claim.

Call Our Foreclosure Defense Lawyers in South Florida Today

If you are in fear of losing your home, you may have more defenses available to you than you think. At Loan Lawyers, our South Florida foreclosure defense attorneys know the many defenses available and will use them to help ensure you can stay in your home. Call us today at 954-807-

1361 or fill out our online form to schedule a free consultation with one of our experienced attorneys.

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How to Fight Collection Efforts for Debts that Do Not Exist in Broward County

People undergo so many financial transactions in their lives that it’s impossible to keep track of them all. Debt collectors do not only know this, but they count on it. They use it to try and collect on debts that someone never owed. These are known as phantom debts, and you are under no legal obligation to pay a debt that you never borrowed. Of course, no debt collector will ever tell you that, and they are actually hoping that you do not ask.

So, if a debt collector is contacting you and asking you to repay a debt you do not believe you ever borrowed, is there anything you can do about it? Fortunately, there is.

Your Rights Under the Fair Debt Collection Practices Act (FDCPA)

While some creditors and debt collection companies do not act fairly, you do have rights. Under the federal Fair Debt Collection Practices Act (FDCPA), you have the right to ask the debt collector to verify your debt. This process is known as the debt validation process; you must request the validation within 30 days from the date of the first collection attempt. Once you have requested that the collector or creditor verifies your debt, they must provide proof that it has either owned the debt since it was borrowed or that they have purchased it from an original creditor.

If a debt collector can provide the necessary proof, they have the legal right to continue trying to collect on the debt. If they have standing—that is, they have something to lose if you do not repay the debt—the collector can even take legal action against you, such as filing a lawsuit against you and securing a court order that allows them to garnish your wages. On the other hand, if the collector cannot provide proof that they own the debt and that you owe it, they no longer have the right to continue trying to collect on the debt.

You can also determine if the debt is valid by checking your credit report with TransUnion or Equifax. If you do actually owe the debt, the original creditor and account may appear on your credit report. You can then ask the debt collector for the name on the original account and compare it with the report. If the collector states the correct name, it is a good sign that the debt is valid and can be collected from you.

It is important to note that credit reports do not always display the original creditor and account. For example, if you did not pay a utility bill and it was sent to a debt collector, your credit report will not show the original account. Any debt that has had the statute of limitations run out on it will also not appear on your report. It is important in this case to know that while the debt is still valid, the debt collector cannot take legal action against you to recover the debt.

Although checking your credit report is a good way to determine whether a debt is valid, debt collectors will sometimes list a phantom debt on your credit report. If, after checking your credit report, you see a debt you do not think belongs to you, you can dispute the debt. To start the process, send a letter to the credit bureau telling them you dispute the debt and specifically state

the errors you believe were made. Also, contact the furnisher of the debt to tell them you are disputing the debt. From there, the credit bureau will give you specific instructions on how to dispute the debt according to their own procedures.

After you contact the debt collector and the credit bureau, you should also get in touch with the original creditor if you have determined which company that is. You should inform them that a debt collection company is trying to collect on a debt that you have no record of borrowing. The creditor may be able to tell you if the debt is valid and if it has been sold to a specific debt collection company.

How to Stop Phantom Debt Collection Efforts

Just like with other unfair debt collection practices, it is possible to stop debt collectors from contacting you and trying to collect on a phantom debt. It is important to work with a South Florida debt defense lawyer to do this because you will have to start by sending the debt collector a cease and desist letter. An attorney will know the most important elements to include within the letter, including the actions you will take against them if they do not comply.

Although a cease and desist letter can stop phantom debt collection efforts, the debt collection company does have the legal right to contact you one more time after they receive your letter. During this point of contact, the debt collector can inform you that it will stop trying to collect on the debt, that it may take legal action to collect on the debt, or the specific legal action that will be taken.

How to Report Phantom Debt Collectors

Again, under the FDCPA, it is against the law for debt collectors to try and collect on debts that do not exist. If you have been contacted by a debt collector in regards to a phantom debt, you should report them to the Consumer Financial Protection Bureau, the Better Business Bureau, or Florida’s Attorney General. A debt relief lawyer can advise on whether you can also file a lawsuit against the debt collection company for certain damages.

Call Our Debt Defense Lawyers in South Florida Today

If you have been contacted by a collector for a debt you believe does not exist, call our South Florida debt defense lawyers today. At Loan Lawyers, we know how to prove a debt is not yours and will advise you of your legal options. Call us today at 954-807-1361 or contact us online to schedule a free consultation.

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Have you received a letter from Goede, Adamczyk, DeBoest & Cross?

Many homeowners in South Florida are finding themselves in foreclosure for falling delinquent on homeowner’s association and condominium association dues.  Typically the association will have an attorney sending a letter to the homeowner that the association intends to foreclose.

If you have received a letter from any of the attorneys from Goede, Adamczyk, DeBoest & Cross, we would be very happy to speak with you.  Just like the association and their lawyers expect you to play by the rules, we expect them to do the same.

If you have received any letters from Goede, Adamczyk, DeBoest & Cross, it’s possible that they have violated the Fair Debt Collection Practices Act and we want to speak to you for your free case evaluation.

Call us at 1.888.FIGHT.13 to speak with an attorney about your free case evaluation.

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Why Am I Being Sued By a Debt Collection Company That I Have Never Heard Of?

All of us have fallen on hard times at one point in our lives and have struggled to keep up with our debts.  However, sometimes circumstances beyond our control get the better of us and there simply is not enough money at the end of the month to pay every debt.  Once someone has missed payments on a debt, the debt is often charged off and sold to debt buyers.  A debt buyer’s entire business model is buying debts for pennies on the dollar and then chasing people who are struggling financially to get them to pay.  It can be an incredibly profitable business model.  Oftentimes these debt buyers will sue to collect on the debts.  Sadly, few people hire competent lawyers to represent them.  Many people just ignore the lawsuit (bad idea) and others call the lawyers who filed the lawsuit begging for a payment plan (also a bad idea).

It is not uncommon for the lawsuit to be the first time that someone has heard of this debt buyer who is now suing them.  Although the law requires them to send you a notice that the debt has been transferred to them, we hear all of the time that clients never received that notice. Some debt buyers that we see commonly in Florida are:

• Crown Asset Management, LLC
• Velocity Investments, LLC
• Jefferson Capital Systems, LLC
• Cascade Capital, LLC
• JHPDE Finance I, LLC
• Cavalry SPV I, LLC
• Credit Corp. Solutions, Inc.
• Unifund CCR, LLC
• Portfolio Recovery Associates
• Midland Funding
• Second Round Sub

If you have been sued by any of these debt buyers, or any others, please call Loan lawyers for your free consultation.  We may be able to get you out of the debt without you having to pay anything to that debt buyer!  We have handled thousands of these cases over years and have eliminated over $100million in debt.  We may be able to eliminate the debt you are being sued on.  Call us at 1.888.FIGHT.13 for your free case evaluation with one of our attorneys.

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How to Avoid Foreclosure Rescue Scams in Broward County

As state and federal forbearance programs come to an end, it has sent many homeowners into a panic. Without the foreclosure protection residents in Broward County have been enjoying for the past 14 months, many residents are in fear of losing their home. While Florida is not likely to see the same collapse of the housing market we did back in 2008, it is simply a fact that foreclosures are going to start increasing. In fact, there was already an increase in foreclosure activity in April, and Pensacola had the third-highest rate of foreclosures of all cities with a population over 200,000. As a state, Florida had the fourth-highest number of foreclosures in the country.

The news is grim and some homeowners might try to find relief in a foreclosure rescue company. Unfortunately, these companies are usually trying to take advantage of homeowners rather than help them. The only real professional that can help you keep your home is a foreclosure defense lawyer in Broward County. If you are in fear of losing your home, outlined below are some of the most common foreclosure scams in Florida, and how to avoid them.

Mortgage Modification Scams

If you are finding it difficult to pay your mortgage, you may have a number of options still available to you. You can apply for a repayment plan, a forbearance agreement, or a loan modification. Typically, all you need to successfully use one of these options is a foreclosure defense lawyer who can negotiate on your behalf. Often, though, other companies known as loan modification companies will send you material in an attempt to get you to contact them.

The communications loan modification companies send typically look fairly official. They try to make their mailings look as though they came from a government official, or they guarantee they can stop your foreclosure. Truthfully, no one can tell you if they can stop the foreclosure without fully looking at the facts of your case.

These companies are simply trying to get you to call them so they can persuade you to pay them instead of your mortgage lender or servicer. Once they have your money, they then forget about your case and move on to the next person they can scam. Even if they continue working with the homeowner, they will charge exorbitant fees for a service you could have done with little or no assistance, such as contacting your servicer.

Forensic Loan Audits

The forensic loan audit scheme involves an auditor that will review your mortgage paperwork to determine if the lender violated the law. Although it is true that legal violations can help save your home from foreclosure, these types of audits do not usually turn up too many errors. These companies typically use a compliance software program that does not have the capacity to perform an in-depth review of your case necessary to spot violations.

The loan auditor may also tell you they will use the results of your audit to force the servicer into offering a modification, which just is not true. Of course, for this supposed service they will charge you high fees for which you will get very little value. To have any effect after finding a mistake, you would have to answer a foreclosure lawsuit or file your own lawsuit, for which you need an attorney.

Securitization Audits

Banks often use securitization methods, which involve bundling mortgage loans with similar characteristics and selling them to another company. A securitization audit then, will determine if your mortgage loan was one that was sold and if so, whether the process was done correctly.

A securitization audit can reveal certain information, but the problem with paying someone to do this for you is that the information is usually publicly available and you do not have to pay a fee for it. The auditor will not be able to give you any sound legal advice, and they may not even point out certain violations that could serve as a foreclosure defense.

The Florida Foreclosure Rescue Fraud Prevention Act

While foreclosure rescue schemes seem innocuous enough, they defraud homeowners who are already in financial trouble out of a tremendous amount of money. For this reason, several states have enacted legislation that prohibits people and companies from taking this type of predatory action, and Florida is no exception. In Florida, homeowners are protected by the Foreclosure Rescue Fraud Prevention Act.

Under this act, anyone that offers services claiming to help save residential properties from foreclosure must operate under tight restrictions. Sadly, of course, there are always bad actors and not everyone abides by the law.

How to Avoid a Foreclosure Rescue Scam

Once you understand the types of foreclosure rescue scams companies and individuals engage in, you can then take certain steps to avoid becoming a victim of one.

The most important steps to take are as follows:

• Do not pay upfront. Modification companies are much more interested in receiving your money than they are helping you, so they will typically charge a high upfront fee. Federal law prohibits this, and it is a red flag if any company asks for one.
• Always pay your servicer. Always make sure any payments you make towards your mortgage go to your servicer or lender. Never pay a modification company with the hope that they will fulfill their promise of transferring it to your servicer.
• Do not ignore your servicer. Modification companies may encourage you to stop all communication with your servicer, but doing so is a mistake. If you are facing foreclosure, you should actually be dealing with your servicer more, not less.

Call Our Foreclosure Defense Lawyers in Broward County First

It is true that you need help when faced with the idea of losing your home, but a modification company will not provide it. At Loan Lawyers, our Broward County foreclosure defense lawyers can provide the sound legal advice you need and help you avoid foreclosure altogether. Call us today at 954-807-1361 or fill out our online form to schedule a free consultation so we can advise on your case.

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Four Things to Beware of When Getting a New Credit Card in South Florida

It is no surprise that the pandemic has caused millions of people across the country financial hardship. A recent study conducted by WalletHub showed Americans paid approximately $82.9 billion in credit card debt just last year alone. While the news is good, as it shows that many people are paying down their credit card debt, that does not seem to be the case in South Florida.

The Stats

According to the Federal Reserve, credit card debt was $108 billion lower at the end of 2020 than it was in 2019. While that may have been the case across the country, it was not in South Florida. The stats for this area of the country are alarming. The average Miami household held approximately $13,701 in credit card debt and lowered their balances by just $16. In Fort Lauderdale, credit card debt in the average household increased by more than $600, and in Pembroke Pines, that number skyrocketed to $930.

This part of the state has some of the highest debt, and many borrowers went into the pandemic without a credit card at all. Now, at a time when many are unemployed and struggling just to keep their homes, they have additional debt on top of it all. Not all credit card debt comes from just borrowing the money initially. A lot of credit card debt comes from the high fees and interest rates credit card companies charge. If you are considering getting a credit card to help offset some of the pandemic’s financial burden, below are four things to watch out for.

1. Introductory Interest Rates

Credit card companies often offer an introductory interest rate to entice borrowers into choosing their cards over others’ offers. However, too many people do not look past the low rate long enough to realize it is only an introductory offer; that offer could last anywhere from three months to one year. Balance transfer cards that offer a zero percent annual percentage rate (APR) are notorious for this.

Introductory interest rates are good deals, but it is key to know that they do not last forever. Always read the fine print to find the rate that will take effect once the introductory rate period ends. It is sometimes difficult to find this rate, and credit card companies do that intentionally, hoping the initial rate is enough to get you to use their card.

2. Balance Transfer Fees

Speaking of cards that offer zero percent balance transfers, you should also watch out for any fees associated with the actual transfer. While the credit card company may not charge you interest, they may try to get around this by charging you a fee that offsets their cost. Often, these fees can be as much as three percent of the amount you are transferring, which may be a hefty amount if you are already trying to get out of debt by using the card.

If you do not use the card for any new purchases, and the rates will not adjust before you can pay off the balance of the card, this may not be an issue. You still, however, should pay attention to the fee being charged.

3. Rate Increases and Late Fees

You may think it is important to pay your monthly payment on time every month to help maintain your credit score with the major bureaus, such as TransUnion. However, it is just as important to make those timely payments every month so you do not incur any late fees. Credit cards do not only charge interest rates, but they may also charge you a late fee that is as much as $40 to $50 in addition to your balance and interest.

Additionally, if you are late making a payment, the credit card company may increase your interest rate. Sometimes, they raise it dramatically and may put it at 30 percent. This will impose an even bigger financial burden on you, and can make it more difficult to obtain loans and credit in the future if you cannot pay it.

Sometimes, an interest rate increase may happen that you have no control over. For example, activity in the lending markets may have an impact on interest rates and the credit card company may increase your interest rate without any warning. Still, it is important to contact your credit card company, inquire about the increase, and ask if there is any way you could get a lower rate.

4. Membership Fees

You may have no other option than to obtain a credit card that comes with a yearly membership fee. It is a fairly common practice, particularly with credit card companies that offer credit to people with little or no credit. Credit cards that offer perks, such as travel rewards, are also most likely to come with a membership fee to help the creditor cover their costs. Annual membership fees can be as much as $100 or more, and might come at a time when you do not expect it, putting you far over your credit limit. Always check to determine if a card you are considering has an annual fee, and whether or not you can afford it.

Our Debt Defense Lawyers in South Florida Can Help with Your Case

Debt from credit card balances, late fees, and high interest can quickly lead to a lawsuit, and debt collection companies will not care what part of your debt they are trying to collect before taking legal action. If a lawsuit has been filed against you, our South Florida debt defense attorneys at Loan Lawyers can help with your case.

Our skilled attorneys know the defenses that work in these lawsuits and will use them to protect you from wage garnishment and other consequences that can result from a lawsuit. Call us today at 954-807-1361 or fill out our online form to schedule a consultation with one of our experienced attorneys and to learn more about how we can help with your case.

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Business Bankruptcy Options

Just as most people will face ups and downs with their personal finances, the same is true for most businesses. In certain circumstances, businesses might benefit from filing for bankruptcy in the same way that an individual might. Filing for bankruptcy is often a valuable tool for reorganizing debt and keeping creditors at bay while the business works to regain its financial footing.

While both individuals and companies can file for bankruptcy, there are different steps involved and the stakes are often higher for businesses. You’ll want help from an attorney with specific experience guiding business owners through the bankruptcy process.

If you own a business and are considering filing for bankruptcy, the bankruptcy attorneys at Loan Lawyers can provide the guidance you’re looking for. We have more than a decade of experience helping people and businesses in Florida with bankruptcy filings, debt defense, foreclosure cases, and related issues. We’re proud to have helped thousands of people and businesses find their way back to a firmer financial footing. Their success stories are the reason we fight so hard for our clients.

Get a free case review today by calling our office in Fort Lauderdale or by filling out our contact form. We can discuss your particular circumstances and whether any of the following bankruptcy options are right for you.

Chapter 13: Adjustment of Debts for Individuals with Regular Income

Chapter 13 is typically used by individuals and not businesses, but there are businesses that may qualify for this type of bankruptcy filing. In particular, Chapter 13 bankruptcy is available for sole proprietorships because sole proprietorships are legally indistinguishable from their owners.

As is the case with personal bankruptcies, a business typically files for Chapter 13 bankruptcy instead of using some other method because the goal is a reorganization, not the liquidation of any remaining assets. Your business will file a repayment plan with your local bankruptcy court outlining how you will pay back your creditors. The amount you will be required to pay back under your repayment plan will depend on how much income you’re making, how much money you owe, and what other assets you have available.

An advantage of Chapter 13 bankruptcy is that you might be able to keep your business operational during the process. You have up to five years to pay off your debt, which can give you additional time to regain your financial footing.

Another advantage of Chapter 13 bankruptcy compared to other types of bankruptcy is that there are more asset exemptions available, allowing you to potentially hold on to more of your property. This can be quite attractive if you’re the sole proprietor of a business, as it makes it easier to do things like keep your house and your car when you file for bankruptcy.

However, if your sole proprietorship requires you to keep a lot of items, products, or equipment on hand, it can be difficult to pay for all those goods while still meeting the terms of your debt repayment plan. And missing just one payment can force you to start the whole process all over, along with having to potentially pay additional penalties and interest. For this reason, think carefully about filing for Chapter 13 bankruptcy if your business is eligible to do so.

Chapter 7: Liquidation Business Bankruptcy

It’s more common for businesses to file for bankruptcy under Chapter 7 than under Chapter 13, but it’s still fairly rare. This is because a Chapter 7 Bankruptcy, also known as liquidation bankruptcy, requires you to sell most of your assets to pay back your creditors. You will also likely be forced to close your business if you file for Chapter 7 bankruptcy.

A Chapter 7 bankruptcy filing for a business is fairly similar to a Chapter 7 filing for an individual or household. Once your business files for bankruptcy, the bankruptcy court will issue an automatic stay barring your creditors from taking any further action against you. You will then need to sell your non-exempt assets (“liquidate” is the official legal term), then use that money to pay back your creditors to the best of your ability. You can keep assets that are in the bankruptcy code’s list of exemptions.

After you’ve liquidated your non-exempt assets and repaid your creditors, the bankruptcy court will discharge your debts. However, as a Chapter 7 bankruptcy generally requires you to shutter your business in exchange for wiping out your debts, this will be the end of the road for your business. The exception is for sole proprietorships, as long as certain conditions are met.

While a Chapter 7 bankruptcy can be a viable option for some businesses, especially sole proprietorships, there are some potential risks if you choose to go this route. If you’re going to be forced to close your business down anyway by filing for Chapter 7 bankruptcy, you can probably do that on your own and avoid the court costs, attorney’s fees, and other expenses that come with the bankruptcy process. Business owners can also often get better prices for their assets than if those same assets were sold by the bankruptcy trustee. Finally, if your business is a partnership, filing for Chapter 7 bankruptcy may end up putting the personal assets of the various partners at risk of liquidation.

Chapter 11: Business Reorganization

By far the most common method businesses use to file for bankruptcy protection is Chapter 11. In fact, most businesses that are not sole proprietorships are required to use Chapter 11 instead of Chapter 7 or Chapter 13.

Like Chapter 13 bankruptcy cases, filing for bankruptcy under Chapter 11 allows businesses to reorganize their debts and come up with a payment plan instead of simply liquidating whatever assets they have left. This gives the business a chance to restructure and find a way back to profitability without having to fully shut down.

When a business files for Chapter 11 bankruptcy, the bankruptcy court will automatically block their creditors from taking any further legal action against the debtor as the business owners figure out the best way forward. The court will appoint a trustee to oversee the bankruptcy while the owners maintain day-to-day control over it.

The debtor must submit a highly-detailed three- to five-year repayment plan to the bankruptcy court and their creditors. As part of a repayment plan, a business can sell some of its assets, terminate existing leases and contracts, and take other steps to partially pay back their creditors. If the plan is approved and the business makes all of its payments, their remaining debts will be discharged.

One of the major hurdles when it comes to filing for Chapter 11 bankruptcy is the time and expense involved. The process can take years to complete. There are many steps and fees along the way. If your business does not have considerable assets, the costs of going through bankruptcy may outweigh the benefits of having some of your debts wiped out.

However, there’s a relatively new option available for smaller businesses that offers many of the same benefits as filing for Chapter 11 bankruptcy. In late 2019, Congress passed the Small Business Reorganization Act, which went into effect in February 2020. Among other things, this law added a new subchapter to Chapter 11 of the federal Bankruptcy Code. This new method of filing for bankruptcy is known as Chapter 11, Subchapter V.

This type of small business bankruptcy is often better suited for businesses with more limited assets. The small business bankruptcy process under subchapter V allows you to pursue reorganization without having a committee of creditors to be appointed or for your creditors to approve your repayment plan. There is also a streamlined process to complete the bankruptcy process. These simplifications cut down on the time and work required to get your reorganization plan approved. Lastly, Subchapter V shortens the whole bankruptcy process by imposing a 90-day deadline to get your repayment plan approved once you file. A shorter bankruptcy process overall means you will save a great deal in attorneys’ fees, court costs, and other expenses.

Contact a Bankruptcy Lawyer Today

There are many options available to businesses facing bankruptcy. Each option comes with its own set of requirements, advantages, and disadvantages. If you’re facing bankruptcy, you can’t afford to make a mistake when you’re trying to figure out how to save your business. Choosing the wrong bankruptcy option or making an error during the filing process could be quite costly.

Fortunately, you don’t have to navigate the bankruptcy process alone. The business bankruptcy attorneys at Loan Lawyers stay up-to-date on all the latest bankruptcy laws and regulations. We have the knowledge and experience to guide you through the process to make it as simple and painless as possible. Call us today or visit our contact page to get a free initial consultation.

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