At J Gannon Helstowski Law Firm, we are committed to guiding Texas businesses through financial challenges, including Subchapter V bankruptcy.

What Is Subchapter V Bankruptcy?

Subchapter V is a streamlined bankruptcy process under Chapter 11 of the U.S. Bankruptcy Code, designed specifically for small businesses. Created through the Small Business Reorganization Act of 2019 (SBRA), it aims to make restructuring more affordable and efficient for business owners facing financial distress.

Unlike traditional Chapter 11 proceedings, which can be complex and expensive, Subchapter V simplifies the process, reduces legal fees, and shortens the time required to confirm a reorganization plan. It offers eligible small businesses a better chance at staying operational while addressing their debts.

Key Features of Subchapter V

• Eligibility Cap: As of 2022, businesses with up to $7.5 million in non-contingent, secured and unsecured debt may qualify.
• Debtor in Control: The business owner retains control of operations without the need for a creditors' committee.
• Streamlined Plan Process: Debtors must submit a repayment plan within 90 days of filing.
• No Absolute Priority Rule: Owners can retain equity without paying creditors in full—an option not available in standard Chapter 11 cases.
• No Disclosure Statement: Saves time and cost by eliminating this usually mandatory document.

Benefits for Texas Businesses

For business owners in Texas facing financial difficulties due to market disruptions, inflation, or unforeseen expenses, Subchapter V offers a practical solution. It helps preserve jobs, stabilize local economies, and maintain community ties by keeping businesses alive.

At J Gannon Helstowski Law Firm, we understand the intricacies of Subchapter V and are ready to assist clients throughout Texas with evaluating eligibility, preparing filings, and navigating court proceedings.

Why Legal Guidance Matters

Although Subchapter V is more accessible, legal guidance remains crucial. Understanding how to classify debts, project future earnings, and negotiate with creditors requires seasoned insight. Our firm is here to ensure your business receives the support it needs for a successful reorganization.