Chapter 11 Subchapter V Bankruptcy Attorneys for Florida Small Businesses

When lawsuits, merchant cash advance debits, tax liens, and vendor demands all hit at once, it can feel like closing your doors is the only option. For many Florida small businesses, it is not. Chapter 11 Subchapter V was built for companies like yours. It gives you a faster and more affordable path to reorganize debt, keep operating, and keep ownership in your hands.

At Lomba, P.A., we represent business owners across South and Central Florida who need breathing room and a real plan. We move quickly to stop creditor pressure, evaluate whether Subchapter V fits your situation, and build a reorganization strategy designed to preserve the business you worked hard to create.

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What Is Subchapter V Bankruptcy?

Subchapter V is a streamlined form of Chapter 11 reorganization created by the Small Business Reorganization Act, which took effect in 2020. Traditional Chapter 11 was designed for large corporations. It is expensive, slow, and often out of reach for a family business, restaurant group, medical practice, or growing service company.

Subchapter V removes many of those barriers. Your business keeps operating while you propose a plan to repay creditors over time, usually three to five years, based on what the business can realistically afford. In most cases, the owners keep their equity. A neutral Subchapter V trustee helps the parties reach an agreement, but that trustee does not take over your company or run your day-to-day operations.

Benefits of Subchapter V for Florida Small Businesses

You Keep Ownership of Your Business

The absolute priority rule does not apply in Subchapter V. Owners can often keep their equity without paying creditors in full or contributing new capital.

Only You Can Propose a Reorganization Plan

Creditors cannot file a competing plan to take control of your company. You set the terms of the restructuring.

Lower Costs Than Traditional Chapter 11

No U.S. Trustee quarterly fees, usually no creditors' committee, and in most cases no separate disclosure statement. More of your cash stays in the business.

A Faster, More Focused Timeline

Your plan is generally due within 90 days of filing, which keeps the case moving and limits the time and expense.

Plan Confirmation Without Every Creditor's Vote

The court can confirm a plan over creditor objections if it commits your projected disposable income for three to five years and meets the fair and equitable standard.

Flexibility on Certain Obligations

You may pay administrative expenses over the life of the plan. In some cases, you can modify a mortgage on the owner's home if the loan was used primarily to fund the business.

Subchapter V Eligibility: Does Your Business Qualify?

To be eligible, a debtor generally must:

• Be engaged in commercial or business activity, as a company or an individual business owner

• Have total noncontingent, liquidated secured and unsecured debts at or below the Subchapter V debt limit, which is currently $3.424 million, subject to additional statutory eligibility requirements. The temporary $7.5 million threshold expired in June 2024.

• Have at least half of that debt arising from commercial or business activities

• Not have owning a single real estate property as its primary business activity

• Not be a publicly traded company or an affiliate of one

Eligibility turns on how your debts are classified, and the details matter. Contingent and disputed claims, debts to insiders, and affiliated entities can all change the analysis. Our attorneys review your balance sheet, contracts, and creditor claims before filing so you know where you stand.

How the Subchapter V Bankruptcy Process Works

Step 1: Strategic Evaluation

We review your finances, creditor pressure, cash flow, and goals, and compare Subchapter V against settlement, traditional Chapter 11, and Chapter 7.

Step 2: Filing and the Automatic Stay

Once you file, the automatic stay takes effect immediately. It halts most collection activity, including lawsuits, garnishments, levies, and foreclosure actions.

Step 3: Operating as Debtor in Possession

Your business stays open, and you remain in control. You file regular operating reports and work with the Subchapter V trustee.

Step 4: The Status Conference

The court holds an early status conference, typically within 60 days, to keep the case on track toward a confirmable plan.

Step 5: Filing the Reorganization Plan

Within 90 days, we file a reorganization plan that shows how creditors will be treated and how the business will fund payments.

Step 6: Confirmation and Discharge

Once the court confirms the plan, you make payments over the plan term. If the plan is consensual, the discharge generally takes effect at confirmation. If the court confirms it over objections, the discharge generally follows completion of plan payments.

Using Subchapter V to Address Merchant Cash Advance Debt

Many of the business owners we meet are carrying several stacked merchant cash advances, each pulling daily or weekly ACH debits and threatening UCC lien enforcement or lawsuits. Because our firm also has a dedicated Merchant Cash Advance Defense practice, we understand how these agreements work and where they are vulnerable.

Stopping MCA Collections

Filing triggers the automatic stay, which can stop MCA collection efforts in their tracks and give you time to challenge unfair or unenforceable agreements.

Restructuring MCA Obligations Into a Sustainable Plan

Subchapter V can fold MCA obligations into a payment plan your business can actually sustain, alongside your other debts.

When Settlement May Be the Better Path

Bankruptcy is not right for every MCA situation. Sometimes a negotiated MCA settlement is the faster, cleaner result. We will tell you honestly which path makes sense.

Subchapter V vs. Traditional Chapter 11 vs. Chapter 7