Subchapter V for EIDL Borrowers
Designed for businesses with debts under $7.5 million. Streamlined: no creditors' committee, no disclosure statement, debtor stays in control. Restructure EIDL over 3-5 years while keeping the business alive.
Plan Treatment
Propose to pay EIDL over 3-5 years based on projected disposable income. The SBA must accept if the plan meets statutory requirements. Unpaid unsecured amounts are discharged at completion.
Advantages Over Ch.7 or 13
Business continues, you stay in control, faster and cheaper than traditional Ch.11, and you can restructure both business and personal debt in one case.
Frequently Asked Questions
Do I qualify for Subchapter V?
Yes if: engaged in business, total debts under $7.5 million, at least 50% of debts from business. Most EIDL borrowers qualify.
Can the SBA object?
Yes, but they must show the plan fails statutory tests. The court can confirm over SBA objection (cramdown).
How much does it cost?
Attorney fees $10,000-$30,000. Filing fee $1,738. Significantly less than traditional Chapter 11.
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