How Long Does a Subchapter V Reorganization Plan Take to Complete?

The reorganization plan plays a very large role in Subchapter V bankruptcy. Below, our West Palm Beach bankruptcy attorney explains the timelines involved.

Subchapter V bankruptcy revolves around the reorganization plan. The plan is drafted by the debtor and outlines how they will repay their creditors. Debtors must submit the plan to the court within 90 days of filing the bankruptcy petition. The court confirms reorganization plans approximately 120 days of the bankruptcy filing. The reorganization plan itself extends between three and five years. Below, our West Palm Beach bankruptcy attorney outlines the important timeframes to keep in mind and the factors that can influence the timeline.

Important Timeframes in Subchapter V

There are many important timeframes to keep in mind during Subchapter V bankruptcy. These are as follows:

• Filing the plan: Debtors must file the reorganization plan within 90 days of filing the bankruptcy petition. The deadline is very strict, but if there are delays that are not within the debtor’s control, the court may extend the deadline.
• Plan confirmation: Reorganization plans are confirmed much faster than in traditional Chapter 11 bankruptcy cases. Separate disclosure statements are not required and so, the plans can often be approved and confirmed in the same hearing.
• Repayment period: Reorganization plans in Subchapter V extend between three and five years. The majority of these plans are three years in length, but they can be extended to five years, particularly if a case involves extraordinary circumstances or complex issues.

What Factors Impact the Timeline of Subchapter V?

There are many factors that impact the timeline of Subchapter V. They include:

• The complexity of the case: Cases that are more complicated, such as the structure of the business or a large number of creditors, can impact the final timeline of Subchapter V.
• Consensus of creditors: One of the provisions in the Small Business Reorganization Act, which created Subchapter V, is the elimination of the absolute priority rule. Eliminating these challenges for debtors are meant to promote a faster consensus on the plan. Still, some creditors may object to the plan and in these cases, it can delay the process.
• The role of the trustee: Trustees are not involved in traditional Chapter 11 bankruptcy cases, but they are in Subchapter V cases. Trustees in Subchapter V take on an administrative role, which can help expedite the process.

Our Bankruptcy Attorney in West Palm Beach Can Provide the Sound Advice You Need

The sooner you complete the Subchapter V process, the sooner you can get back to solely focusing on your business and moving forward. To ensure no mistakes are made that can delay the process, our West Palm Beach bankruptcy attorney at Brian K. McMahon, P.A. can help. Our experienced attorney can help you draft your reorganization plan and ensure it is fair and will be approved by the court so you obtain the best possible outcome. Call us now at (561) 658-1789 or contact us online to schedule a consultation and to learn more about how we can help.