Chapter 11 and Subchapter V: Key Differences Business Owners Should Know
- Melissa A. Youngman
- Oct 24
- 3 min read
By: Winter Park Estate Plans & ReOrgs Admin
Helping businesses reorganize since 2002
Traditionally, Chapter 11 bankruptcy has been the primary restructuring vehicle for financially distressed companies. It allows businesses to pause creditor actions, restructure debt, and stay open. But traditional Chapter 11 can be time consuming and expensive, often too heavy a lift for smaller business operations.
That’s where Subchapter V comes in for Florida businesses. Designed specifically for small and mid-sized businesses, this streamlined form of reorganization makes bankruptcy more practical, efficient, and affordable. Our experienced bankruptcy attorney, Melissa Youngman, can help the Orlando business community and businesses across Central Florida determine which option may be best for their companies.
What Is Subchapter V?
Subchapter V was created by the Small Business Reorganization Act of 2019 (SBRA) to simplify the reorganization process for small business owners. It preserves the key benefits of Chapter 11, like the automatic stay and the chance to restructure secured and unsecured debts, but removes many procedural and financial roadblocks. The result? A faster, less costly way to reorganize your business while maintaining control of your company.
How Subchapter V Differs from Traditional Chapter 11
No Creditors’ Committee Required. In most Subchapter V cases, there’s no need for a formal creditors’ committee. That means fewer administrative costs and less friction with creditors.
A Trustee Who Assists Rather Than Oversees. In Subchapter V cases, the Subchapter V trustee acts as a facilitator to help debtors and creditors resolve claims consensually in order to cut down costs for the debtor while ensuring creditors are treated fairly and in compliance with the relevant terms of the Bankruptcy Code.
Quicker Timelines Mean Faster Relief. Debtors in Subchapter V must file a plan within 90 days of filing. The court does not typically extend the plan deadline except in extraordinary circumstances outside of the control of the debtor. This keeps case momentum going and ensures that Florida businesses can reorganize before operations are further strained and creditor relationships further damaged.
Simplified Plan and Approval Process. Unlike traditional Chapter 11 cases, in Subchapter V cases, there’s no separate disclosure statement filed with the plan, and confirmation can occur even without creditor votes if the plan is fair and feasible.
You Stay in Control of Your Business. As a debtor-in-possession in Subchapter V, you continue to operate your company with fewer procedural barriers and more flexibility to stabilize cash flow.
Who Qualifies for Subchapter V in Florida
Your business may be eligible if:
Your business operates a commercial or business enterprise in Florida.
The total debt for your business is under the current Subchapter V debt limit which is $3,424,000.00 million, as of April 2025, and includes secured, unsecured, and priority debts.
At least 50% of that debt comes from business operations.
Even closely held, family owned small businesses, and LLCs can file a Subchapter V case if their debts meet the above criteria.
Why This Matters for Florida and Winter Park Businesses
Florida’s entrepreneurial economy thrives on small and mid-sized companies, like restaurants, contractors, healthcare practices, real estate investors, and retailers. When cash flow slows or creditors turn up the pressure, Subchapter V offers a structured path to recovery that allows business owners to stay in control of the business and continue operations.
Melissa Youngman, our experienced business bankruptcy attorney in Winter Park, has helped many Central Florida business owners use Chapter 11 and Subchapter V to save their companies, retain jobs, and restore financial stability for long term success. Our firm tailors every strategy to the unique needs of Florida business owners facing short-term liquidity crises or long-term debt pressure.
The Bottom Line
If you’re a Florida business owner struggling with debt but committed to rebuilding, Subchapter V Florida may be your best option. It’s streamlined, cost-effective, and gives you the chance to protect your company while you restructure.
📥 Download Your Free Chapter 11 Readiness Checklist
Find out if your company qualifies for Subchapter V and what to prepare before you file. Download the Checklist (PDF)
Or schedule a confidential consultation with Melissa Youngman, our experienced Chapter 11 business bankruptcy attorney, today.📞 (407) 765-3427 , or use the link below to schedule a free phone/online consultation.
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