If you’re a business owner in Texas struggling to keep the lights on, pay your employees, or deal with aggressive creditors, it can feel like you’re out of options. You’re not. Filing for subchapter V bankruptcy may be the smart, strategic step you need. Bankruptcy is a legal tool that helps small businesses regroup, reduce debt, and move forward. Subchapter V bankruptcy is a streamlined version of Chapter 11. It offers faster relief, lower costs, and the chance to keep your business and equity alive.
Tittle Law Firm, PLLC, takes the pressure off your shoulders by handling every detail of bankruptcy. We prepare your case, protect your interests, and help you build a path to long-term stability. You focus on running your business; we’ll focus on getting you the relief you need.
What Is Subchapter V Bankruptcy?
Subchapter V bankruptcy was created through the Small Business Reorganization Act of 2019 to give small businesses a more efficient way to reorganize under Chapter 11. Unlike traditional Chapter 11, it reduces legal costs, avoids complicated procedures, and keeps control of your business in your hands. The law aims to help businesses stay operational while resolving debt.
Your business must have less than $3,424,000 in noncontingent, liquidated debts (both secured and unsecured), excluding any owed to insiders or affiliates, to qualify for subchapter V. Your business must also be engaged in commercial or business activity.
An experienced bankruptcy attorney like Brandon Tittle can review your case and help determine if your business is eligible for this form of bankruptcy.
How Is Chapter 11 Subchapter V Different?
Many ask, What’s the difference between traditional Chapter 11 and Chapter 11 subchapter V? The short answer is that subchapter V is for small business owners. It simplifies the process and eliminates many costly requirements of standard Chapter 11 bankruptcy.
Here’s what makes this bankruptcy more accessible:
- No creditors’ committee. Subchapter V eliminates the need for a formal group of creditors that could otherwise slow down or oppose your plan.
- No disclosure statement. Unlike traditional Chapter 11, you don’t have to draft a separate disclosure document explaining your finances.
- Only the debtor can file a plan. You retain control over your reorganization, and creditors cannot submit competing plans.
- No U.S. Trustee fees. You only pay for the subchapter V trustee, which is less costly.
- No need for creditor approval. You don’t need a single creditor’s vote to confirm if your plan meets legal standards.
- You keep your equity. You are not required to give up ownership of your business even if you’re paying creditors a reduced amount.
These changes allow you to focus on saving your business instead of getting buried in red tape.
Benefits of Filing Subchapter V
Business owners who file under subchapter V get several advantages over traditional Chapter 11, including:
- Lower legal costs. Attorney fees and other expenses are typically half what you’d pay in a regular Chapter 11.
- Faster process. You can usually begin making plan payments within seven months of filing.
- No equity loss. Subchapter V removes the “absolute priority rule,” so you can keep your ownership even if you don’t fully pay all creditors.
- Flexible plan terms. You can stretch payments over three to five years using future business income.
- Automatic stay. Creditors must stop collection efforts as soon as you file, giving you room to breathe.
With these benefits, subchapter V offers struggling business owners a way to restructure without starting from scratch.
What You Need to Get Started
To begin the process, gather these key documents:
- Current financial statements that reflect the business’s income, expenses, assets, and liabilities;
- Up-to-date tax returns or a valid extension for the current year; and
- General liability and property insurance in the name of the business.
These documents can help your Tittle Law Firm, PLLC bankruptcy attorney understand your current financial picture and prepare your case.
Will Filing Affect Your Personal Credit?
If your business files under subchapter V, your personal credit score is not affected. However, if you signed a personal guarantee for a business loan, the creditor may still pursue you in state court. Filing under subchapter V only protects the business, not individual guarantors.
What Happens to Litigation and Collections?
When we file your subchapter V case, an automatic stay goes into effect. The automatic stay is a powerful tool in bankruptcy because it gives you immediate relief from creditor pressure. It stops creditors from:
- Filing lawsuits,
- Garnishing wages,
- Freezing accounts, and
- Sending collection letters.
Without creditors on your back, you can focus on reorganizing your finances, keeping operations running, and working with your attorney to create a repayment plan.
Can You Still Run Your Business?
Yes. You can keep operating your business during and after filing. You’ll need court approval for major actions outside of day-to-day operations, but it’s business as usual for most business functions. This flexibility allows you to keep serving customers and bringing in revenue.
Choose Tittle Law Firm, PLLC for Subchapter V Bankruptcy
At Tittle Law Firm, PLLC, we understand that financial distress doesn’t mean failure. Many successful business owners go through tough times. What matters is how you respond. We help you take control of the situation and move toward a stable financial future.
Brandon Tittle brings decades of focused bankruptcy experience to the table. He led complex national and international restructuring cases across various industries. He also held clerkships with two U.S. bankruptcy judges and earned an LL.M. in Bankruptcy, giving him insight into the court system and the real-world challenges debtors face.
We are proud of our compassionate service and commitment to clients. We’ve helped Texas businesses eliminate millions in debt and remain operational under subchapter V.
Choose us as your trusted bankruptcy advisor. We’ll walk you through each step, handle the paperwork, and protect your interests from start to finish. Contact us today to learn how to rebuild your business and restore your peace of mind.