Subchapter V Chapter 11 Bankruptcy

SUBCHAPTER V CHAPTER 11 BANKRUPTCY

For small businesses in New Jersey and the New York metro area facing overwhelming debt, Subchapter V of Chapter 11 of the U.S. Bankruptcy Code offers a streamlined path to financial recovery. At Rabinowitz, Lubetkin & Tully, LLC, our experienced attorneys specialize in Sub V Chapter 11 bankruptcy, helping business owners reorganize their debts, retain control of their operations, and rebuild for the future.

What is Subchapter V of Chapter 11 Bankruptcy?

Subchapter V is designed specifically for small businesses with debts under $3,024,725 million, making the traditional Chapter 11 reorganization process more accessible, less costly, and faster. Unlike standard Chapter 11, Sub V offers a simpler procedure that allows business owners to propose a repayment plan over three to five years, often shedding some unsecured debts along the way.

This can be a lifeline for businesses struggling with credit card debt, vendor obligations, or other unsecured liabilities while protecting essential assets like real property, machinery, and vehicles.

Are you a small business owner in New Jersey or New York with mounting unsecured debt? Subchapter V Chapter 11 may provide the structured, court-approved solution you need.

How Does Sub V Chapter 11 Benefit Small Businesses?

Subchapter V Chapter 11 offers several advantages that can make a critical difference for struggling business owners:

1. Streamlined Court Process – Sub V eliminates some of the procedural complexities of traditional Chapter 11, potentially reducing legal fees and administrative burdens.
2. Flexible Repayment Plans – Businesses can propose court-approved plans to pay creditors over a manageable period of three to five years, if not longer.
3. Retention of Control – Unlike other bankruptcy options, Sub V allows business owners to remain in control of operations as a “debtor in possession.”
4. Reduction of Unsecured Debt – Certain unsecured debts may be partially or fully discharged under the plan, providing a fresh start.
5. Faster Resolution – Courts aim to expedite Sub V cases, often completing the process in months rather than years.

Are you struggling to stay afloat while facing multiple creditors? A Subchapter V Chapter 11 plan may allow you to restructure debt without giving up your business.

Who Qualifies for Subchapter V Chapter 11?

Eligibility for Sub V Chapter 11 is limited to small business debtors, defined as:

• Businesses (corporations, partnerships, LLCs, or sole proprietors) with less than $3,024,725 million in total debts
• Primarily engaged in commercial operations
• Owing less than 50% of their debt to non-contingent, liquidated secured creditors

Most types of unsecured debt—like credit cards or vendor invoices—can be included, while certain secured debts, such as real estate or equipment loans, remain subject to normal repayment rules.

Unsure if your business qualifies for Subchapter V? Our attorneys in Livingston, NJ, and serving the New Jersey and New York metro area can evaluate your financial situation and explain your options.

How Rabinowitz, Lubetkin & Tully Can Help

At Rabinowitz, Lubetkin & Tully, LLC, we have extensive experience guiding small businesses through Subchapter V Chapter 11 cases. Our team offers comprehensive legal services, including:

• Pre-filing Consultation: Assessing your business’s financial status, debt structure, and eligibility for Sub V.
• Filing and Documentation: Preparing and filing your Chapter 11 petition and all required schedules with accuracy and timeliness.
• Creditor Negotiations: Representing you in discussions with creditors to maximize flexibility and reduce conflict.
• Repayment Plan Drafting: Designing court-approved plans that balance repayment obligations with business viability.
• Court Representation: Advocating for your interests throughout hearings, mediations, and plan confirmation.

Wondering how to handle creditor pressure while exploring bankruptcy? Our team can negotiate on your behalf to protect your business and reputation.

Sub V Chapter 11 Case Examples

Our firm has successfully represented a diverse range of clients, demonstrating our ability to navigate complex financial situations:

• RLB Food: A fresh food distributor formerly located in West Caldwell, NJ.
• JAM Media: A minority entrepreneur owning multiple radio stations in Iowa and North Carolina.
• Wildflower Digital: An internet marketing company with millions in unsecured debt.
• New Jersey Vision: An ophthalmology practice in Bloomfield, NJ, severely impacted by COVID-19.
• Masahiko and Yasuko Negita: A Japanese couple facing a $1.8 million judgment related to labor law violations for their restaurant business.
• Council for Aid to Education, Inc.: A Chicago-based non-profit with an expensive lease, where we served as conflict counsel.

These cases highlight our ability to handle high-stakes, multi-jurisdictional matters for both for-profit and non-profit entities.

Frequently Asked Questions

1. Can I file Subchapter V if I own more than one business?
   Yes, each business must meet the eligibility criteria individually. Our team can evaluate your entire portfolio and advise on the best strategy.
2. Will I lose my business if I file Subchapter V?
   No. Unlike liquidation under Chapter 7, Sub V allows owners to remain in control while restructuring debts.
3. How long does the Sub V Chapter 11 process take?
   Most cases are resolved within six to nine months, though complex situations may take longer.
4. How much will filing Subchapter V cost?
   Costs vary depending on the complexity of the case, but Sub V is generally more affordable than traditional Chapter 11, thanks to its streamlined procedures.
5. Do I need to be located in New Jersey to work with your firm?
   No. We represent businesses throughout the New Jersey and New York metro area, providing both in-person and remote consultations.

Why Choose Rabinowitz, Lubetkin & Tully for Subchapter V Bankruptcy

Our six-attorney team brings decades of combined experience in bankruptcy, commercial litigation, real estate, and family law. We understand that each Sub V case is unique, requiring personalized strategies and proactive solutions.

• Local Expertise: Based in Livingston, NJ, we have a deep understanding of both New Jersey and New York bankruptcy courts.
• Client-Focused: We prioritize clear communication and responsive service, keeping you informed at every step.
• Proven Results: Our track record of successful Sub V cases demonstrates our ability to protect business owners and creditors alike.