Small & mid-sized businesses

Companies facing temporary financial stress, contract issues, or heavy debt loads may reorganize instead of shutting down.

Individuals with complex debt

Individuals whose debts are too high for Chapter 13, or who have unusual business-related obligations, may qualify for Chapter 11.

Why Subchapter V matters

Streamlined rules and timelines for qualifying small business debtors.
Typically no creditors’ committee and a more debtor-friendly process.
Can reduce costs and make reorganization more practical for smaller operations.

Plan Concepts

What a Chapter 11 plan does

Restructures secured and unsecured debt obligations over time.
May modify interest rates, maturity dates, or payment amounts under court supervision.
Provides a roadmap for paying creditors while keeping the business functioning.

Creditor voting and court approval are key parts of confirming a Chapter 11 plan. Subchapter V has modified rules that may reduce the need for creditor consent.

Operations

Operating in Chapter 11

The debtor usually continues running the business as a “debtor in possession.”
Court approval may be required for major decisions such as asset sales or new financing.
Ongoing reporting to the U.S. Trustee and creditors is required.

Strong bookkeeping and timely reporting are critical to a successful Chapter 11 or Subchapter V case.

Process

Key stages of a case

1

Filing & first-day motions
The case is filed and the court may consider early requests related to payroll, use of cash collateral, or critical vendors.

2

Stabilizing operations
Business continues to operate while budgets and reporting routines are established.

3

Plan development
A plan and disclosure statement (if required) are drafted, explaining how creditors will be treated.

4

Negotiation & voting
In traditional Chapter 11, creditors may vote on the plan. Subchapter V uses a different confirmation standard.

5

Confirmation
The court decides whether the plan meets legal requirements and should be confirmed.

6

Plan performance
The debtor makes plan payments and complies with reporting until the case can be closed.

Is it right for you?

Questions we typically discuss

What are the core goals: preserve jobs, restructure loans, sell assets, or wind down?
Is there a realistic path to profitability or an orderly exit?
Does Subchapter V eligibility apply and offer advantages?

Chapter 11 is highly fact-specific. An initial strategy meeting focuses on budgets, debt structure, and what “success” would look like for you or your business.

FAQs

Common questions

How is Subchapter V different from traditional Chapter 11?

Subchapter V is designed for qualifying small business debtors. It streamlines some procedures, generally eliminates the requirement for a creditors’ committee, and may allow plan confirmation without creditor approval if certain standards are met.

Will my business have to shut down?

Not necessarily. Many Chapter 11 cases involve continuing operations while restructuring debts. Others involve an orderly sale or wind-down. The strategy depends on your goals and cash flow.

Is Chapter 11 very expensive?

Chapter 11 can be more costly than Chapters 7 or 13 because of reporting, hearings, and professional fees. Subchapter V is intended to reduce some of those costs for smaller cases.

How long does a case last?

Timelines vary widely. Some Subchapter V plans confirm in months; larger or contested cases may take longer.

Informational only — does not create an attorney-client relationship or constitute legal advice.