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2 days 4 hours ago

Lead Express, Harvest Moon Financial, Gentle Breeze Online and Green Stream Lending, used Deceptive Marketing Practices
Lead Express, Harvest Moon Financial and others repeated drew interest-only charges, leaving consumers to pay more than promised
payday loanMay 22, 2020 – The Federal Trade Commission (FTC) has charged Lead Express, Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending with deceiving its customers by overcharging millions of dollars and repeatedly withdrawing money from customers bank accounts, without their permission.
Post from the FTC: According to the FTC, the 11 defendants, through Internet websites and telemarketing, and operating under the names Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending, used deceptive marketing tactics to convince consumers that their loans would be repaid in a fixed number of payments. In fact, in many instances, the FTC alleges, consumers found that long after the promised number of payments had been made, the defendants had applied their funds to finance charges only and were continuing to make regular finance-charge only withdrawals from their checking accounts.
In addition, the FTC charges that the defendants failed to make required loan disclosures, made recurring withdrawals from consumers’ bank accounts without proper authorization, and illegally used remotely created checks.
“Harvest Moon bled consumers dry, by promising a single payment payday loan, but then automatically debiting consumers’ bank accounts for finance charges every two weeks, in perpetuity,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.
The FTC charges the defendants with violating the FTC Act, the Telemarketing Sales Rule, the Truth in Lending Act and Regulation Z, and the Electronic Funds Transfer Act and Regulation E. The defendants named in the case are: Lead Express, Inc.; Camel Coins, Inc.; Sea Mirror, Inc,; Naito Corp.; Kotobuki Marketing, Inc.; Ebisu Marketing, Inc.; Hotei Marketing, Inc.; Daikoku Marketing, Inc.; La Posta Tribal Lending Enterprise; Takehisa Naito; and Keishi Ikeda.
The Commission vote authorizing the staff to file the complaint was 5-0. The U.S. District Court for the District of Nevada entered the temporary restraining order on May 19, 2020.
The FTC has information for consumers about payday loans, including alternative options and information for military consumers.
payday loan

MUSINGS FROM DIANE:
payday loanThose having financial challenges are easy targets for creeps, like payday lenders.  These lenders will open businesses, create loans and take innocent peoples hard-earned money.  When they get in trouble (like Harvest Moon) then they close that door, only to open another door the next day.  Avoiding using payday loan companies, it is the beginning of the end.  Look for other options – does your bank offer a short-term loan, can you take another temporary job, can you adjust why you are spending more than you are earning?  I know the solution is not simple, but please ask for help from someone who is interested in your best interests.  Never borrow money from your retirement accounts, unless you talk to someone (like me) who can explain the consequences.

How Can I Help You?
The post Lead Express, Harvest Mood Financial Sued by FTC appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.


4 days 4 hours ago

A Wave of Small Business Closures Is on the Way. Can Washington Stop It?
Bipartisan proposals address weaknesses of a hastily passed aid program.

One of the great threats to the post-pandemic economy is becoming clear: Vast numbers of small and midsize businesses will close permanently during the crisis, causing millions of jobs to be lost.

The federal government moved with uncharacteristic speed to help those businesses — enacting the Paycheck Protection Program, with $669 billion allocated so far.

But there is a problem. The structure of the program is not particularly well suited to the type of crisis that millions of businesses face. The program may have bought businesses some time, but in its current shape it will not enable many of them to remain solvent long enough to emerge from the other side of the pandemic in some viable form.

Rather, it is more tailored to what the crisis looked liked when shutdowns first took place in the olden times of March 2020, when it seemed that business closures would be a short-term blip and everyone might be able to get back to normal by summer.

It was intended to cover eight weeks’ worth of expenses, of which 75 percent must apply to payroll, for firms with under 500 employees. Now it is looking likely that many businesses will face revenue shortfalls for many months.

For loans made under the program to be fully forgiven, an employer must maintain pre-crisis employment levels. Now it’s clear many businesses will permanently shift to smaller staffing levels to remain viable, such as restaurants operating at partial capacity.

The program is technically available to companies that make a good-faith assertion that they need help to support operations. But it doesn’t distinguish between firms with mild and temporary disruptions and those facing threat of permanent closure.

Moreover, the structure of the program, which provides a recipient with a Small Business Administration-backed loan that is then forgiven if certain conditions are met, could make some business owners reluctant to take advantage. They might fear that if they run afoul of the government’s rules, they will have even more debt heaped on top of a failing enterprise.

“The risk is that they’ve spent more money on this program than anyone has ever spent on a small-business program in world history, but haven’t changed the trajectory of permanent small-business closures,” said John Lettieri, president of the Economic Innovation Group, a think tank that advocates business dynamism. “If the patient has a gaping chest wound and you give him a bandage, it’s better than nothing but probably isn’t going to keep the patient alive.”

When Congress enacted the Paycheck Protection Program as part of a $2 trillion aid package in March, it still seemed plausible that the disruption to the economy would be temporary. And the P.P.P. was devised to ensure that employers kept as many people on their payrolls as possible. But that has often acted at cross-purposes with the goal of having businesses ultimately emerge as viable enterprises.

“The P.P.P. makes sense in that incentivizing employers to keep people on payroll and compensating them for doing that is valuable, especially given the overwhelming of the unemployment insurance system that was happening,” said Adam Ozimek, chief economist of Upwork, a website for freelancers. “Conceptually that makes sense, but the issue is trying to do that and at the same time address the issue of massive small business insolvency that we are increasingly facing.”

Mr. Ozimek is dealing with the tension firsthand. In addition to his job as an economist studying labor markets, he is co-owner of Decades, a bowling alley, restaurant and bar in Lancaster, Pa. Before the pandemic, it employed the equivalent of 35 full-time employees, but it now needs fewer workers while takeout food is its only business. It has taken a P.P.P. loan.

Leading economists have identified the mass closure of service-oriented businesses as a particular risk for the medium-term future of the economy. One survey of 5,800 small businesses conducted in late March found that only 47 percent expected to still be in business at the end of the year if the crisis lasted four months.

“The loss of thousands of small- and medium-sized businesses across the country would destroy the life’s work and family legacy of many business and community leaders and limit the strength of the recovery when it comes,” Jerome Powell, the Federal Reserve chair, said in a speech last week. “These businesses are a principal source of job creation — something we will sorely need as people seek to return to work.”

There’s not much the government can do if a health crisis renders some types of businesses, especially those where large groups of people gather, nonviable indefinitely. But there are several ideas circulating on Capitol Hill to try to address the potential of mass small business closures.

Senator Michael Bennet, Democrat of Colorado, and Senator Todd Young, Republican of Indiana, plan to introduce a bill text Thursday on what they call the “Restart Act.” Businesses would receive loans to finance six months’ worth of fixed operating costs and payroll, offered at a low interest rate — no payments due for 12 months — and with a seven-year term.

In their bill, the government would forgive the share of the loan devoted to payroll, rent and other fixed expenses based on the company’s revenue decline. So it would act as a loan for companies that are able to weather the downturn, and act as a grant for those more severely affected.

Another group of senators, including the Republican Mitt Romney of Utah and the Democrat Joe Manchin of West Virginia, have proposed legislation that would build on the Paycheck Protection Program, in part by expanding the period for loan forgiveness from eight to 16 weeks.

In the House, Representatives Dean Phillips, Democrat of Minnesota, and Chip Roy, Republican of Texas, have offered legislation that would, among other steps, extend the duration of P.P.P. loans.

The bipartisan nature of the bills shows this issue doesn’t cleave along the usual ideological divides. A key question is whether whatever comes next will enable businesses that are in a deep hole now — but have a viable future once the public health crisis recedes — to get from Point A to Point B.

And it would particularly help if any new or revised P.P.P. program would have clearer rules of the game and greater predictability about who is truly eligible and under what terms.

“To be kind to both Republicans and Democrats who came up with this plan on the fly, the magnitude of the shock is so much larger than what anybody thought it was at the time,” said Joe Brusuelas, chief economist at RSM, an accounting firm that serves midsize companies. “It makes sense to revisit the program.

“Right now what we’re hearing from our clients is that they are frustrated and confused.”


6 days 22 hours ago

From: Time By: Melissa ChanMay 15, 2020

Every cent matters to Kim Jaemin, a cab driver in virus-ravaged New York City, whose diet has been reduced to instant noodles despite working 14-hour shifts, seven days a week.

Since the coronavirus pandemic emptied the streets of passengers, the 58-year-old from South Korea has been living on about $65 a day. He buys near-expired, discounted food that he rations to last the week. Two meals of the day consist of the cheapest brand of ramen noodles he can find. “Forget about nutrition,” he says.

On May 2, of the seven total passengers he picked up, five did not tip. The other two tipped him less than $3 each. While most of his fellow cab drivers have quit—either because they fear getting sick with COVID-19, which has killed dozens of their colleagues, or because they feel it’s useless to scour a deserted city for riders—Kim says he has no choice but to work more. “I have to make every possible penny, nickel and dime,” says Kim, who lives alone in Queens and scribbles every fare and tip he gets into a notepad.

“The only way I could survive,” he adds, “I have to work every day.”

That’s the reality for hundreds of New York City’s taxicab drivers who remain on the road, searching for scarce fares as ridership hits record lows. The number of cab rides in the city fell from about 506,000 during the first week of March to roughly 28,500 during the week of May 4, according to the Metropolitan Taxicab Board of Trade (MTBOT), the city’s largest taxi group, which represents more than 5,500 yellow cab owners. The city’s Taxi & Limousine Commission (TLC) did not disclose its data, but the MTBOT, which represents about half of the entire taxi industry, says fares across its fleets have dropped about 94%.

“It’s a staggering number that we’ve never experienced before,” MTBOT spokesman Michael Woloz says. “Theaters are dark. Restaurants are closed. All of the traditional fares have disappeared.”

Outside of Grand Central Terminal at 9 a.m. on a recent Monday, cabs are lined up, but most are waiting in vain. The world-famous transportation hub is near-vacant, and silence has replaced the usual clamor of rush-hour traffic. “It’s like a movie right now,” Mohamed Eleissawy, a 63-year-old taxi driver, says of the abandoned metropolis.

Amid a drop in fares, thousands of drivers have stopped working. In the first week of March, about 3,660 taxi drivers were still on the road, according to the MTBOT’s tally. Now, the group has counted fewer than 600. Thousands have signed up to deliver meals to sick or elderly residents for $53 per route as part of a new citywide program meant to help vulnerable populations and earn drivers more cash. By repurposing their jobs, the TLC said these drivers are “helping us to ensure that no one goes hungry.” But like Jaemin, many of the city’s cab drivers are inching closer to severe hunger themselves.

A new survey by the New York Taxi Workers Alliance (NYTWA), which represents about 23,000 taxi and rideshare-app drivers, found more than 82% of drivers have run out of money to buy food or say they will soon reach that point. Out of 919 drivers surveyed, more than 700 said they were unable to pay their rent or mortgage in March and April. The Independent Drivers Guild, which represents more than 80,000 for-hire drivers in the city, said 45% of its members in late April had asked for help securing food. Nearly 70% of the guild’s drivers said they were unable to make rent or mortgage in April, with more saying they won’t be able to pay in May.

The TLC said it’s still tracking fatality figures, but Bhairavi Desai, NYTWA’s executive director, says at least 50 drivers have died from COVID-19 so far. “It’s heartbreaking,” Desai says.

Desai fears the pandemic will be a “breaking point” for many drivers already suffering financial hardships due to competition with ride-sharing apps and crushing loans they took out to buy medallions, which are permits the city requires to own a yellow cab. In 2018, at least eight professional drivers in the city died by suicide, which advocates blamed on crippling debt. The industry had been showing signs of improvement, especially after the spate of suicides grabbed the attention of local lawmakers, according to Desai and Woloz. Then the pandemic hit.

“The yellow cab is the quintessential symbol of New York City,” Desai says. “But these are men and women, who for every time we think the bottom has finally settled in, it falls out all over again.”

Now, the futures of cab drivers are more uncertain than ever. As new COVID-19 cases slowly drop in New York City, advocates are hopeful the century-old taxi industry will rebound as it did after the Sept. 11 terrorist attacks and after Superstorm Sandy in 2015. “New York City is the biggest and best,” TLC spokesman Allan Fromberg says, “and we expect the future to be bright again in time.”

Desai and Woloz say yellow cabs could even become a vital part of the city’s recovery, transporting both people and goods as some commuters avoid crowded subways. “They know how to navigate through a crisis,” Desai says. “Through every city disaster, drivers have kept working.”

But predictions among some in the workforce are grim. “The coronavirus is the last nail in the yellow cab coffin,” says 36-year-old driver Khurshid Ahmed, who owes $370,000 on his medallion loan. “I am tied to this job until my last breath,” he adds. “I am not seeing any future.”

Jacob Smith, 49, from Ghana, agrees. Standing on 5th Ave., which was devoid of pedestrians at what used to be rush hour, the yellow cab driver and father of two has little hope. “When the doors open, I’m not sure people will come back,” he says. Smith is set on changing careers as soon as someone, anywhere, will hire him. “New York is famous for the cab,” he says, “but corona will be the end.”

Almontasir Ahmed Mohamed, 33, is also weighing a career switch after driving a green cab for six years. He’s studying engineering science at a Kingsborough community college part-time and wonders when he will see his family again in his home country of Sudan. “I stopped thinking about my future,” he says. “The virus has made me confused about my plans.”

For Kim, though, the U.S. has been his home for almost 40 years, so going back to South Korea is not an option. Neither is giving up his cab, because driving is all he has known. “This is my job until I die,” he says. “There is no other job I could do.”

But as he jeopardizes his own health by getting behind the wheel, Kim says at least one passenger a day will make a racist remark, telling him to go back to his country or speak better English. “I don’t think the city respects us like doctors and nurses, the police, the subway workers,” he says. “We are essential workers, too.”

“Without the yellow cabs,” he adds, “the city cannot move.”


6 days 1 hour ago

Man at DeskOne of the objectives of the Bankruptcy Code is to ensure that each class of creditors is treated equally. And one of the ways that is accomplished is to allow the debtor’s estate to claw back certain pre-petition payments made to creditors. Accordingly, creditors of a debtor who files for bankruptcy are often unpleasantly surprised to learn that they may be forced to relinquish “preferential” payments they received before the bankruptcy filing. Read More ›
Tags: Chapter 7, Eastern District of Michigan


1 week 3 days ago

From: Asian JournalMay 13, 2020By: Atty. Raymond Bulaon A LOT of people who are burdened with credit card debt often don’t know where to turn for help. They see all the ads on TV, internet, etc. by so-called “debt consolidation” or “debt settlement” companies hoping that this will get them out of debt without filing for bankruptcy. More often than not, however, they end up either getting scammed or disappointed when those companies cannot deliver the big promises made. Buyer beware: Hiring a debt settlement company can actually make your debt problems worse and keep you in debt forever. I am sure this is not what you want, is it?

What a lot of people don’t realize is that when they hire a debt settlement company, it doesn’t mean that they are now legally protected from their creditors as long as they are making their monthly payments to the debt settlement company. The debt settlement company, after deducting their fees, simply saves the money in a trust account and will only be able to settle with creditors one by one as money accumulates. So, if they put you on a 3-5 year plan, that means there will be a very long wait for creditors to get their money if they even do.

Most of your creditors will not wait that long to get paid. So, what happens? They will sue you! And if they do, the debt settlement company is not going to be able to represent you because they are not lawyers. In the meantime, your debts are still growing because of the added interest, penalties and other collection costs. This is NOT the best way to consolidate your bills. While you are on their program, the creditors will also continue to report damaging information on your credit report until the debt is paid. This is not what you want, is it? Of course, the debt settlement companies will not tell you that.

In my opinion, if you wish to consolidate your bills, there is nothing better than doing it through a Chapter 13 bankruptcy. Here are the advantages: (1) You pay 0% interest on credit cards and other unsecured debts. This means all your payments go towards principal. (2) You can be totally debt-free in 3-5 years, (3) In most cases, you only pay based on what you can afford, not based on how much you owe, (4) Your monthly debt payments can be slashed by at least half in most cases, allowing you to have extra money for other expenses, and (5) All kinds of debts can be included in Chapter 13, not just credit cards. So if you have unpaid taxes, medical bills, payday loans, personal loans, student loans, late mortgage payments, etc., all of these can be included in one affordable monthly payment.

So if you are struggling every single month even just making minimum payments, you’re probably feeling frustrated because you realize that there is just no way that you can pay all your debts anytime soon. Some people get stressed out once they realized that they owe so much that it is simply not possible to ever become debt-free with the amount of debt they have accumulated given their monthly income.

Well, Chapter 13 can be a game changer for you. If you have not explored this legal option, perhaps you should.

Finally, the greatest advantage of filing Chapter 13 vs. hiring a debt settlement company is that in Chapter 13, you are 100% protected from all creditor lawsuits, judgments, liens, garnishments, etc. Once your creditors are notified of the filing, they also cannot report you as being late to the credit bureaus anymore. Your credit report will show that your debts are being paid through Chapter 13. Seven years after filing a 13, the bankruptcy will be deleted from your credit report. If you need to purchase a home or a car while in Chapter 13, this is also possible provided that you obtain court approval for the purchase. This is quite common.  


1 week 5 days ago

Small Business Reorganizations under New Subchapter V of Chapter 11 of the Bankruptcy Code The purpose of this class will be  to discuss  the changes to the new Subchapter V of the bankruptcy code and its impact on small business reorganizations.On August 23, 2019, President Trump signed into law the Small Business Reorganization Act of 2019 (“SBRA”), Pub. L. No. 116-54 (2019). Congress increased the cap to $7,500,000 for the next year as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act from $2,725,625.00.SBRA became effective on February 19, 2020These provisions are not a new chapter of the bankruptcy code, but a subchapter of chapter 11 of the bankruptcy code and the existing chapter 11 sections will apply unless otherwise modified by Subchapter V. There are 3 chapters of the bankruptcy code that are used in this district and they are chapter 7, chapter 13 and chapter 11. Subchapter V is a subchapter of chapter 11 and not a new chapter of the Bankruptcy Code In the way of background, chapter 7 cases are liquidations for individuals or businesses, chapter 13 are organizations for individuals (not businesses) where the individual uses 3 to 5 years of future earnings (disposable income) to pay creditors and chapter 11  are reorganizations or liquidations for individuals or businesses.As will be discussed below Subchapter V is a blend of chapter 11 and chapter 13 and the goal of the law is to make it easier and cheaper for small businesses to reorganize!In this district, 90% of chapter 11 filings are unable to reorganize and those cases are converted to chapter 7 (closed by the Bankruptcy Trustee) or dismissed as “no asset” cases. This change in the law is an attempt by Congress to simplify the reorganization process and reduce the cost of small business chapter 11 filings. Subchapter V can be found at 11 U.S. Code sections 1182 through 1195. 

  1. Debtor. Section 1182(1) defines a Debtor (individual or business) as a person engaged in commercial or business activities that has aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the bankruptcy petition of not more than $7,500,000 not less than 50 percent of which arose from the commercial or business activities of the Debtor.
    1. Noncontingent liquidated debt, both secured and unsecured debt must not exceed $7,500,000.
    2. 50% or more of the debt must have arisen from commercial or business activities of the Debtor. 1182(1)(A) 
    3. Non-contingent debt refers to a debt that is owed at present without any acts needing to occur first.
    4. Contingent debt is one in which there is a 'triggering event' or some condition precedent for the debt to exist.
    5. Subchapter V does not apply to publicly traded companies 1182(B)(ii) 

II. Trustee. The United States Trustee (a government agency which is a component of the Department of Justice)  shall appoint a standing trustee as a Trustee in a case filed under this chapter 1183(a)

  1. What are the roles of a Trustee in Subchapter V?

1. Appear and be heard at the status conference before the Bankruptcy Judge assigned to the case2. Attend plan confirmation hearing; 3. Ensure that the Debtor commences making timely payments required by a plan confirmed under this subchapter; 4. If the Debtor ceases to be a Debtor in possession, perform the duties specified in section 704(a)(8) and paragraphs (1), (2), and (6) of section 1106(a) of this title, including operating the business of the Debtor  and 

  1. Facilitate the development of a consensual plan of reorganization-this is a new role for a Trustee. Developing a consensual plan is primarily the role of Debtor’s counsel. 



  1. If the plan is confirmed under the service of the trustee in the case shall terminate when the plan has been substantially consummated  ⸹1183(c)(1)

III. Operation of the Business. The Debtor shall have the right to run its business  ⸹1184.IV. Removal of the Debtor ⸹1185. On request of a party in interest, and after notice and a hearing, the court shall order that the Debtor  not be a Debtor in possession for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the Debtor.V. Property of the Estate.  If a plan is confirmed, property of the estate includes, includes  property pursuant to section 541 of the Bankruptcy Code and (1) property that  the Debtor acquires after the commencement of the case,  (2) earnings from services performed by the Debtor after the date of commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 12, or 13 ⸹1186.

  1. The Debtor shall remain in possession of all property of the estate ⸹1186(b).

VI. Status Conference ⸹1188

  1. Not later than 60 days after the entry of the order for relief under this chapter, the court shall hold a status conference to further the expeditious and economical resolution of a case under this subchapter ⸹1188(a).
  2. Not later than 14 days before the date of the status conference under subsection (a), the Debtor shall file with the court and serve on the trustee and all parties in interest a report that details the efforts the Debtor has undertaken and will undertake to attain a consensual plan of reorganization. ⸹1188(c)


VII. Filing of the Plan § 1189

  1. Only the Debtor may file a plan under this subchapter. 1189(a) 
  2. The Debtor shall file a plan not later than 90 days after the order for relief under this chapter, except that the court may extend the period if the need for the extension is attributable to circumstances for which the Debtor should not justly be held accountable 1189(b).

VIII. Contents of Plan  § 1190(1)  A plan filed under this subchapter shall include— (A) a brief history of the business operations of the Debtor; (B) a liquidation analysis; and (C) projections with respect to the ability of the Debtor to make payments under the proposed plan of reorganization; (2) Shall provide for the submission of all or such portion of the future earnings or other future income of the Debtor to the supervision and control of the Trustee as is necessary for the execution of the plan; and (3) Notwithstanding section 1123(b)(5) of this title, may modify the rights of the holder of a claim secured only by a security interest in real property that is the principal residence of the Debtor if the new value received in connection with the granting of the security interest was— (A) not used primarily to acquire the real property; and (B) used primarily in connection with the small business of the Debtor ⸹1190(3) allows a Debtor, pursuant to a confirmed chapter 11 plan, to modify a mortgage on the Debtor’s principal residence if the debt was not used to acquire the residence and used primarily with the operation of the Debtors small business-this is a major change in bankruptcy law since first mortgages on a Debtor’s principal residence cannot be modified.IX. Confirmation of Plan § 1191

  1. The Court on request of a Debtor shall confirm the plan  if the plan does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the plan. 1191(b)
  2. With respect to a class of secured claims  (A) the plan provides that all of the projected disposable income of the Debtor to be received in the 3-year period, or such longer period not to exceed 5 years as the court may fix, beginning on the date that the first payment is due under the plan will be applied to make payments under the plan; or (B) the value of the property to be distributed under the plan in the 3-year period, or such longer period not to exceed 5 years as the court may fix, beginning on the date on which the first distribution is due under the plan, is not less than the projected disposable income of the Debtor. 1191(c)(2)
  3. The Debtor will be able to make all payments under the plan 1191(3)(A)(i) 
  4. The term “disposable income” means the income that is received by the Debtor and that is not reasonably necessary to be expended— (1) for— (A) the maintenance or support of the Debtor or a dependent of the Debtor; or (B) a domestic support obligation that first becomes payable after the date of the filing of the petition; or (2) for the payment of expenditures necessary for the continuation, preservation, or operation of the business of the Debtor. 1191(d)(1) & (2)


X. Discharge. If the plan of the Debtor is confirmed, as soon as practicable after completion by the Debtor of all payments due within the first 3 years of the plan, or such longer period not to exceed 5 years as the court may fix, the court shall grant the Debtor a discharge of all debts §1192XI. Modification of Plan § 1193 A. The Debtor may modify a plan at any time before confirmation  ⸹1193(a)B. If a Plan has been confirmed under  ⸹1191(a), the Debtor may modify the plan at any time after confirmation of the Plan and before substantial consummation of the Plan  ⸹1193(b)XII. Payments § 1194 A. Payments and funds received by the trustee shall be retained by the Trustee until confirmation or denial of confirmation of a plan. If a plan is confirmed, the trustee shall distribute any such payment in accordance with the plan. If a plan is not confirmed, the trustee shall return any such payments to the Debtor 1194(a). B. The above payment mechanism is similar to chapter 13, where the Debtor makes monthly payments to the Trustee who in turn pays creditors. C. Prior to confirmation of a plan, the court, after notice and a hearing, may authorize the trustee to make payments to the holder of a secured claim for the purpose of providing adequate protection of an interest in property. 1194(c) D. ⸹1194(c) allows a secured creditor to make a motion before the Court for adequate protection payments if the Debtor is not making payments to the secured creditor, or the secured creditor does not have an “equity cushion”. XIII.  Transactions with professionals.  A person is not disqualified from employment by the Debtor solely because that person holds a claim of less than $10,000 that arose prior to commencement of the case. § 1195 A. The above provision is helpful to professional(s) who are owed money by the Debtor (less than $10,000) who do not want to waive that claim (meaning they want to be paid by the Debtor) and they want to represent the Debtor in the Subchapter V proceeding.XIV. Impaired Creditors. Subchapter V allows a Debtor to confirm a Plan without the need for obtaining the consent of a class of “impaired” creditors as is required under Chapter 11.

  1. An impaired creditor is  a creditor who is paid or accepts less than what they are currently owed.

XV. United States Trustee Quarterly Fees have been eliminated. Other than the initial filing fee, fees are essentially eliminated, making the process much less expensive to the petitioner.XVI. Creditor committee requirement has been eliminated (only formed for cause in Subchapter V cases)XVII.  Cram Down has been simplified. In Subchapter 5, if the creditors can’t agree on the petitioner’s proposed plan, an application can be made to the Bankruptcy Court Judge to order the plan approved.  A. Cram Down standard-The success of the proposed plan need only be more attractive to the unsecured creditors than would a conversion to a Chapter 7 liquidation plan (creditors get $1 more under Subchapter V)XVIII. Documents needed to file under Subchapter V-the entity will require the business’ most recent balance sheet, statement of operations, cash flow statement, a federal income tax return (or a sworn statement that such a document does not exist). XIX. Plan must be submitted for approval within 90 days. However, the Bankruptcy Court may extend this deadline “if the need for the extension is attributable to circumstances for which the Debtor should not justly be held accountable.” (in the COVID-19 environment, courts are likely to grant extensions liberally)XX. Disclosure Statement not required. The Act eliminates the requirement that a disclosure statement is filed, thereby reducing costs to the Debtor and streamlining the plan confirmation process. However, the Debtor must include in the plan certain information customarily included in a disclosure statement, such as a short history of the Debtor, a liquidation analysis, and financial projections reflecting the ability of the Debtor to make the payments required by the planXXI. Trustee-under Subchapter V, a trustee is automatically appointed, but the Debtor retains control of its assets and operations. trustees have the authority to investigate the Debtor’s financial affairs. The trustee’s primary function is to facilitate a consensual plan among the Debtor and its creditors, almost like a mediator would facilitate a settlement in litigation. The trustee’s duties will include facilitating the development of a consensual reorganization plan, appearing at major hearings in the case, and ensuring that a Debtor commences making timely payments under a plan. A.Under the supervision of the Department of Justice, approximately 250 Subchapter V trustees – mostly attorneys and accountants – were selected out of over 3,000 applicants. Most Subchapter V trustees had recently received their first case assignments when the COVID-19 pandemic hit.XXII. Timing of Subchapter V Filing. Small businesses should carefully consider the timing of a Subchapter V filing: the Borrower Application Form promulgated by the U.S. Small Business Administration indicates that applicants presently subject to a bankruptcy proceeding are ineligible for the Paycheck Protection Program (PPP). XXIII. Plan Term -Consistent with current practice in Chapter 13 cases, a reorganization plan will customarily be three years in length but may be as long as five.XXIV. Impaired Class. Under Subchapter V, a plan can be confirmed without the vote of an impaired accepting class, providing that the plan does not discriminate unfairly and is deemed “fair and equitable” as to each class of claims. To meet the “fair and equitable” requirement under the Bankruptcy Code, Subchapter V requires that all of the Debtor’s projected disposable income during the length of the plan be applied to plan payments.XXV.  Elimination of the Absolute Priority Rule.  Subchapter V  eliminates the Absolute Priority Rule, under which a Debtor cannot retain an ownership interest in its assets unless all creditor claims are paid in full or the Debtor contributes new value to fund the Plan. Under Subchapter V no “new value” contributions are required as a condition of the Debtor’s asset retention. XXVI. Single Asset Real Estate Cases (“SARE”)-if a Debtor elects to file a bankruptcy case as a SARE, then they cannot also elect Subchapter V treatment. Single asset real estate is defined by the Bankruptcy Code as a single property or project that generates substantially all of the Debtor's gross income (§ 101(51B), Bankruptcy Code). If the Debtor's only business is operating the property and the property generates substantially all of the Debtor's income, a SARE typically includes the following types of properties: Shopping centers, Office buildings, Industrial and warehouse buildings and Apartment complexes. 

Subchapter V Bankruptcy Provisions can be found at:11 U.S. Code SUBCHAPTER V—SMALL BUSINESS Debtor REORGANIZATION BANKRUPTCY CODE CITES
1. § 1181. Inapplicability of other sections2. § 1182. Definitions3. § 1183. Trustee4. § 1184. Rights and powers of a Debtor in possession5. § 1185. Removal of Debtor in possession6. § 1186. Property of the estate7. § 1187. Duties and reporting requirements of Debtors8. § 1188. Status conference9. § 1189. Filing of the plan10. § 1190. Contents of plan11. § 1191. Confirmation of plan12. § 1192. Discharge13. § 1193. Modification of plan14. § 1194. Payments15. § 1195. Transactions with professionals


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