Subchapter V allows a small business debtor to obtain a discharge on the effective date of the plan, provided the plan was consensual and approved under the new § 1191(a), which requires compliance with all of the consensual confirmation provisions in a typical chapter 11 case.

What is a subchapter V?

Subchapter 5 was added to Chapter 11 of the U.S. Bankruptcy Code in 2019 to make reorganization bankruptcies more accessible to small businesses. ... The subchapter went into effect in 2020.

What is a subchapter 5 trustee?

The trustee in a Subchapter V case will largely be responsible for helping the business debtor to develop a repayment plan and to reach terms with creditors. If there is a dispute, the trustee can operate in a manner that is similar to a mediator, helping the business to resolve any disputes with creditors.