Bloomberg Law
April 15, 2020, 9:46 AM

New Bankruptcy Law Could Save Small Businesses Slammed by Virus

Alex Wolf
Alex Wolf

The U.S. lost 170,000 small businesses in the last recession. Whether things go better this time may depend on a new law aimed at easing their path through bankruptcy.

The Small Business Reorganization Act, which went into effect just two months ago, was intended to make the process of reorganizing an insolvent company with less than $2.7 million in debt faster and cheaper. The $2 trillion coronavirus relief package enacted in March will allow as many as 70% of small businesses to qualify by temporarily raising the debt limit to $7.5 million for the next year.

The change could ...

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