Lawmakers push bankruptcy laws changes

WASHINGTON (WPRI) - There are more than 80,000 small businesses in Rhode Island; a huge amount for such a small state.

That's why lawmakers in Washington are pushing for major changes in bankruptcy laws, to make sure these businesses stay in business.

Small businesses account for more than half of jobs in America. But many business owners argue bankruptcy laws make it harder for many to stay open.

At a hearing in Washington D.C. that senator Sheldon Whitehouse chairs, he heard testimony from small business owners who say current bankruptcy codes make it impossible and costly for businesses to reorganize and stay in business.

According to the RI Small Business Admistration, in 2008 while there were 6,000 new businesses that opened, more than 7,000 businesses closed, many of those, filing bankruptcy.

One of the proposals includes opening up Chapter 12 to a wider group of small businesses, right now only family farms and fishermen can file.

According to lawmakers, Chapter 12 would fill a gap allowing many small businesses to reorganize instead of liquidation, as many of them now are forced to do.