Source: United States Senator for Rhode Island Sheldon Whitehouse
04.08.22
Legislation helps small businesses stay open and individuals keep their homes as they find their financial footing through bankruptcy
Washington, DC – Senators Sheldon Whitehouse (D-RI), Chuck Grassley (R-IA), Dick Durbin (D-IL), and John Cornyn (R-TX) cheered passage of their new bipartisan legislation to help small businesses and individuals stay afloat during bankruptcy. The bill passed unanimously in the Senate last evening.
“The pandemic and supply chain disruptions have left lots of Americans and small businesses in financial trouble. This legislation extends our improvements to the bankruptcy process for small businesses, to help business owners and their employees stay afloat as they face economic hardship. It also helps more Americans keep their homes as they go through bankruptcy,” said Whitehouse. “I’m pleased to build on the bipartisan success of my small business relief bill with Senator Grassley.”
“Small businesses that fall on hard times should not face a mountain of paperwork designed for major corporations in order to reorganize and continue operating. Senator Whitehouse and I passed the Small Business Reorganization Act in 2019 to streamline and eliminate barriers in the bankruptcy process for small businesses. This unanimous action in the Senate builds on this bill’s success and expands access for more small businesses to efficiently reorganize. I’m grateful for the work of my colleagues in moving this bill forward,” Grassley said.
“American families and small businesses need Congress’s help to get through the pandemic and economic challenges,” said Durbin. “That’s why I’m joining my colleagues in proving our commitment to providing the tools and flexibility for them to once again be successful. Our bipartisan legislation will provide small businesses and families with more flexibility to navigate the bankruptcy system and get back on their feet.”
Whitehouse and Grassley passed the Small Business Reorganization Act in 2019 to establish streamlined bankruptcy procedures that help small business owners keep their companies afloat and preserve jobs. The CARES Act of 2020 temporarily allowed more small businesses to qualify for those streamlined procedures by increasing the upper debt limit for small businesses from $2.7 million to $7.5 million. That increase expired on March 27, 2022.
The new legislation provides a two-year extension to the CARES Act increase to $7.5 million, and makes minor technical fixes to the Small Business Reorganization Act. It also increases the debt limit for individuals to qualify for Chapter 13 bankruptcy for two years, allowing more individuals the opportunity to try to save their homes from foreclosure. This increase addresses the concern that rising home prices and exploding student loan debt will push increasing numbers of individuals over the debt limit to qualify for Chapter 13 bankruptcy.