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What Is Chapter 11 Subchapter V?

Serving Families Throughout Mobile

Chapter 11 Subchapter V is a section of the U.S. Bankruptcy Code that was introduced in 2019 as part of the Small Business Reorganization Act (SBRA). This subchapter is designed to make the Chapter 11 bankruptcy process more accessible and affordable for small businesses.

How Can Chapter 11 Subchapter V Help Me?

Under Chapter 11 Subchapter V, eligible small businesses with debts of less than $7.5 million can file for bankruptcy and reorganize their debts while remaining in control of their business operations. This is different from traditional Chapter 11 bankruptcy, which can be expensive and time-consuming and often requires the appointment of a trustee to oversee the debtor's operations.

Chapter 11 Subchapter V also provides for a more streamlined reorganization process, with shorter deadlines for filing a plan of reorganization and fewer requirements for disclosure and reporting. Additionally, it allows debtors to pay off their debts over a 3–5-year period, without the need for creditor approval of the reorganization plan.

Overall, Chapter 11 Subchapter V aims to provide small businesses with a more efficient and less costly way to restructure their debts and continue operating, while also providing creditors with greater assurance that they will receive payment.

Are you an Alabama resident in a position to take advantage of Chapter 11 Subsection V? Call Ryan Legal Services, Inc. at (251) 241-5234 today to request a consultation!