Chapter 11 in brief
Chapter 11 of the Bankruptcy Code (11 U.S.C. §§ 1101–1195) provides for reorganization of a business or, in some cases, an individual debtor. The debtor typically remains in possession (a "debtor in possession" under 11 U.S.C. § 1101(1)) and continues to operate while proposing a plan of reorganization. A plan must be confirmed by the court under 11 U.S.C. § 1129; quarterly fees are paid to the U.S. Trustee under 28 U.S.C. § 1930(a)(6).
Subchapter V — small-business reorganization
The Small Business Reorganization Act of 2019 (SBRA), Pub. L. 116-54, added Subchapter V to Chapter 11 effective February 19, 2020. Subchapter V is available in the Western District of Missouri like every other district. It streamlines reorganization for eligible small-business debtors by:
- Eliminating the absolute-priority rule for confirmation of a non-consensual plan (11 U.S.C. § 1191(b));
- Eliminating the requirement of a separate disclosure statement (11 U.S.C. § 1181(b));
- Eliminating creditor committees absent court order (11 U.S.C. § 1181(b));
- Imposing a 90-day plan-filing deadline from the order for relief (11 U.S.C. § 1189(b));
- Appointing a Subchapter V trustee in every case (11 U.S.C. § 1183).
Eligibility — 11 U.S.C. § 1182(1)
A debtor may elect Subchapter V if it is a person engaged in commercial or business activities (excluding a single-asset real-estate debtor) whose aggregate noncontingent liquidated secured and unsecured debts at filing do not exceed the statutory ceiling. The ceiling has changed several times since 2020:
| Period | Sub V debt ceiling | Source |
|---|---|---|
| Feb 2020 – Mar 2020 | $2,725,625 | SBRA original |
| Mar 2020 – Jun 2024 (sunset 6/21/2024) | $7,500,000 | CARES Act / extensions |
| Post-sunset (current) | $3,024,725 (subject to triennial § 104 adjustment) | 11 U.S.C. §§ 1182(1), 104 |
At least 50% of the qualifying debt must arise from the commercial or business activities of the debtor.
The Subchapter V trustee — 11 U.S.C. § 1183
A Sub V trustee is appointed in every Subchapter V case from the U.S. Trustee's panel. Unlike a Chapter 7 trustee, the Sub V trustee does not displace the debtor in possession. The Sub V trustee's duties under § 1183(b) include:
- Facilitating a consensual plan;
- Appearing at the status conference and confirmation hearing;
- If a non-consensual plan is confirmed under § 1191(b), making distributions to creditors;
- Investigating financial affairs only if the court so orders.
The current panel of Sub V trustees serving Region 13 (which includes Missouri) is published at justice.gov — List of Subchapter V Trustees.
Status conference and plan deadline
Within 60 days after the order for relief, the court holds a status conference under 11 U.S.C. § 1188(a) to consider efficient case administration. The debtor must file a status report 14 days before the conference (§ 1188(c)). The plan must be filed within 90 days of the order for relief (§ 1189(b)) absent extension for circumstances for which the debtor should not justly be held accountable.
Discharge timing
Under a consensual plan (§ 1191(a)), discharge is entered upon confirmation. Under a non-consensual cramdown plan (§ 1191(b)), discharge is entered after completion of payments under the plan covering 3 to 5 years of projected disposable income (§ 1192).
Other reference pages on this site
Filing · Local rules · Forms · Chapter 7 · Chapter 13 · Exemptions · Means test · Credit counseling · Pro se · Judges · Trustees