Subchapter V Attorney Serving Families Throughout Mobile

Mobile Subchapter V Attorney

Helping Small Business Owners Take Control of Their Debts

Chapter 11 of the Bankruptcy Code provides a path for businesses to restructure their debts and assets to allow them to continue operations. While Chapter 11 is an important tool for businesses in financial distress, it can also be a lengthy and costly process for small businesses. Fortunately, a special category of Chapter 11 called Subchapter V can provide a more streamlined and cost-effective approach for certain small business debtors. Subchapter V was created by the Small Business Reorganization Act of 2019 and allows eligible debtors to submit a reorganization plan within 90 days of filing for bankruptcy. This can help small businesses emerge from bankruptcy more quickly and with greater control over the process.

If you are a small business owner in Mobile, Alabama, struggling with debt, Ryan Legal Services, Inc can help you file for bankruptcy under Subchapter V. Back by over 26 years of experience, we have helped numerous clients successfully navigate the bankruptcy process and seek a fresh start. We understand that filing for bankruptcy can be a stressful and overwhelming experience. That is why we offer our clients personalized legal guidance and support. Our attorney is well-versed in the nuances of bankruptcy law and can help you understand the eligibility requirements for Subchapter V and the process and benefits associated with filing under this category.

To schedule a consultation with our Mobile Subchapter V attorney, please contact us at (251) 241-5234.

An Overview of Subchapter V

Subchapter V is a special category of Chapter 11 bankruptcy designed to help small business debtors restructure their debts and assets in a more expedited and less expensive way.

Subchapter V can allow for the following:

Modifications of secured and unsecured debts
Reductions in interest rates
Extensions of repayment periods

The goal is to help small businesses avoid liquidation and continue to provide jobs and economic benefits to their communities.

To be eligible for Subchapter V, a debtor must be a small business with debts of no more than $7.5 million. This debt limit was increased from $2.7 million under the CARES Act in response to the economic impact of the COVID-19 pandemic and extended under the Bankruptcy Threshold Adjustment and Technical Corrections Act. In addition, the debtor must derive at least 50% of its debts from commercial or business activities, and the reorganization plan must be proposed in good faith.

The Process of Subchapter V

The process of Subchapter V bankruptcy begins with the debtor filing a petition for bankruptcy with the bankruptcy court. The debtor is responsible for submitting financial statements, including balance sheets, cash-flow statements, and Federal income tax returns. Additionally, the debtor must update the court on profitability, projected cash receipts and disbursements, and compliance with the bankruptcy code.

One key difference between Subchapter V and traditional Chapter 11 bankruptcy is the role of the trustee. In Subchapter V, the trustee’s role is more limited than in Chapter 11 cases. The trustee does not take over the management of the business but rather oversees the reorganization of the debtor’s assets and debts. They may also review the debtor’s conduct and appear at court hearings.

Unlike traditional Chapter 11 bankruptcy, the debtor generally does not need approval from creditors on their proposed plan under Subchapter V. However, the debtor’s plan must be fair and equitable, meet certain requirements, and be approved by the court. The court must find that the plan is feasible and in the best interests of the creditors.

Benefits of Subchapter V

Subchapter V of the Bankruptcy Code offers several benefits to small business debtors. One of the primary benefits is an expedited process, as the absence of a disclosure statement streamlines the bankruptcy proceedings. Additionally, a status conference is held within 60 days of filing, allowing for a faster resolution.

Another benefit is cost savings. The streamlined process can reduce legal fees and administrative expenses, making it more accessible to small business owners with limited resources. This is especially important since the cost of traditional Chapter 11 bankruptcy proceedings can be prohibitively expensive for small businesses.

Subchapter V also offers greater control for debtors. The debtor retains ownership and control of the business while developing a reorganization plan, allowing them to make decisions and take actions to ensure their business’s survival. This can be a significant advantage, as traditional Chapter 11 bankruptcy proceedings often involve the appointment of a trustee who takes control of the business operations.

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Schedule a Consultation Today

Subchapter V can be an enticing option for small business owners. However, it is important to note that filers must meet eligibility criteria and might face challenges during the process. Therefore, consulting with a Mobile Subchapter V lawyer is crucial. They can guide you through each stage of your case, help you make informed decisions, and ensure that you comply with the Bankruptcy Code requirements.

Please do not hesitate to reach out to Ryan Legal Services, Inc for help with your case. Call (251) 241-5234 or submit an online contact form today.

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Our FAQ

Have questions? We are here to help. Still have questions or can't find the answer you need? Give us a call at 251-241-5234 today!

What are Exemptions?

Most of the exemptions which will apply in a Chapter 7 case are found under Alabama state law. States are all given the option by Congress to decide whether to operate under their own exemption statutes, or under the exemption statutes set out under Title 11 of the U.S. Code ( the “Bankruptcy Code”). There are additional statutes ( “laws”) in both the United States Code and under the Alabama Code.
Whenever there is a statute that provides additional protection for your property over and above the standard list of exemptions, you can claim these exemptions to further protect your property. Failure to timely claim an exemptions can have the effect of a waiver of that exemption. This means it is highly important to provide your lawyer ( “attorney”) with all of the information he or she requests from you concerning your property. The panel trustee is only able to seize and liquidate property to pay creditors which is not subject to a legal exemption under Alabama OR federal law.
In Chapter 13 bankruptcy cases, the Debtor keeps all property. Exemptions are still important to identify and claim in your case, however. Failure to claim all of your exemptions in a Chapter 13 case can result in you being required to pay your creditors more than you would otherwise owe them if all exemptions were claimed.
At Ryan Legal Services, Inc., we are highly knowledgeable and keep up to date with respect to Chapter 7 and Chapter 13 bankruptcy exemptions. We represent individual clients in Baldwin, Mobile and Washington Counties.
Kevin Ryan is an experienced bankruptcy lawyer who will be there for you. Call us to set up a free telephone or office consultation. Kevin Ryan is admitted to practice before the United States Bankruptcy Court for the Southern District of Alabama. http://www.alsb.uscourts.gov
What is a Reaffirmation Agreement?

You may decide that you would like to keep your relationship with certain creditors in a Chapter 7 case. The procedure to maintain certain debts post-bankruptcy is called Reaffirmation. Reaffirmation is accomplished by entering into a written agreement with the creditor using one of a number of Official Bankruptcy Forms. Usually, the debtor and creditor simply re-establish the original terms of the loan. In some cases, the creditor may agree to reduce an interest rate, or modify the original contract terms as an incentive for the debtor to reaffirm the debt.
Reaffirmation of a long term mortgage loan or an auto loan may be something a debtor would want to consider in the context of filing a Chapter 7 bankruptcy case. The terms of the agreement, and whether the agreement would be in the client's best interest is something that a competent lawyer will discuss with a client. Reaffirmation of a mortgage or auto loan will cause the future payments to be reported to the major credit bureaus ( Trans Union, Experian and Equifax). Timely payments will help raise the debtor's credit score after the bankruptcy discharge order is issued in the Chapter 7 bankruptcy case.
A debtor will generally have only forty-five (45) days after the conclusion of the Meeting of Creditors to file the Reaffirmation Agreement. The debtor is required to file Official Bankruptcy Form 8 ( Statement of Intent) with the U.S. Bankruptcy Court that identifies the debtor's intent with respect to secured debts like auto and car loans. A debtor is never required to reaffirm any debt in a Chapter 7 bankruptcy case.
At Ryan Legal Services, Inc, we have been representing individuals in Chapter 7 and Chapter 13 bankruptcy matters since 1998. We represent individuals in Baldwin, Mobile and Washington Counties.
Kevin Ryan is an experienced bankruptcy lawyer who will be there for you. Call us to set up a free telephone or office consultation.
Should I Transfer Property Pre-Bankruptcy?

There are some cases where a client can meet with a lawyer and make arrangements to change the ownership of property, sell property, or dispose of property prior to filing a bankruptcy case. However, this should never be interpreted as a blank license to indiscriminately transfer assets out of your name. You should never transfer title to any property, or spend any amount of money that is not allocated towards necessary household bills, utilities, and pre-existing secured debt payments prior to consulting with a bankruptcy lawyer. The initial office consultation with a lawyer is dedicated mostly to discussing these issues. A lawyer will always be interested in meeting with you sooner rather than later so that these potential issues can be identified and properly addressed prior to moving forward on your case.
Transfers of property, or spending discretionary funds prior to filing a bankruptcy case can often result in negative consequences when you later file a bankruptcy case. Every bankruptcy case presents different circumstances, and different opportunities to legally protect your property from creditors. The objective in most bankruptcy cases is to protect all or as much of your property while terminating all or most of your debt. This is usually where a bankruptcy case can become too complicated for a person to obtain all of the benefits of a bankruptcy filing by filing a case without hiring a lawyer. The best bankruptcy attorneys set and accomplish goals with their clients to protect the maximum amount of property and obtain a discharge of all or a maximum amount of the client(s)' debt in the least amount of time.
You should not transfer any of your property until you speak with a qualified, experienced bankruptcy attorney. At Ryan Legal Services, Inc., Attorney Kevin Ryan has more than 18 years experience handling complex Chapter 7 and Chapter 13 Bankruptcy matters. Call now to schedule a free telephone or office consultation. We are happy to discuss these issues with you personally and confidentially.
Kevin Ryan is an experienced bankruptcy lawyer who will be there for you. Call us to set up a free telephone or office consultation.

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