Subchapter V Cost: Filing Fees, Trustee Pay, and Attorney Fees

The court filing fee for a Subchapter V bankruptcy is $1,738 under 28 U.S.C. § 1930 and the United States Courts' 2025 fee schedule. But that is only the cost of opening the case. The larger expenses are attorney fees, trustee compensation, and any disputes that require litigation. Those costs depend on the company's debts, the creditors involved, and whether issues such as merchant cash advance (MCA) recharacterization need to be addressed. Business owners considering Subchapter V need to understand the full cost, not just the filing fee.

What Does It Cost to File Subchapter V Bankruptcy?

The court filing fee for Subchapter V is $1,738. Total costs are higher when you include attorney fees, trustee compensation, and any contested proceedings.

The United States Courts Bankruptcy Court Miscellaneous Fee Schedule lists the Chapter 11 filing fee at $1,738 for 2025. That fee is the same whether a business files under traditional Chapter 11 or Subchapter V.

There are three main expenses to account for:

• Attorney fees: Usually the largest variable. Costs depend on the company's financial condition, the number and types of creditors, and whether litigation or other disputes arise.
• Trustee compensation: A Subchapter V trustee is appointed and receives court-approved compensation for the work performed. The amount depends on the trustee's involvement.
• The filing fee: A fixed $1,738 court charge, generally the smallest part of the overall expense.

Subchapter V was created under the Small Business Reorganization Act of 2019 (SBRA), Pub. L. 116-54, and is governed by 11 U.S.C. §§ 1181–1195. It gives eligible businesses a different way to reorganize under Chapter 11. The real cost savings come from changes to the bankruptcy process, not from a lower filing fee. In particular, the law generally eliminates the need for a creditors' committee, removes the usual disclosure statement requirement, and gives the debtor the exclusive right to file a reorganization plan.

The $1,738 Court Filing Fee

You pay the $1,738 filing fee to the bankruptcy court when you file the petition. Choosing Subchapter V does not reduce that fee. It is the same amount charged for a traditional Chapter 11 filing under the 2025 schedule. Business owners should account for it, but the larger question is what the case will cost to prepare, pursue, and complete.

Attorney Fees in Subchapter V

A business's attorney fees depend on how complicated its Subchapter V case becomes. A company with organized financial records, fewer disputes with creditors, and a realistic reorganization plan will usually have lower legal costs. Those costs can increase when creditors challenge the plan, disagree over asset values, or when MCA agreements become the subject of litigation. If the business also needs merchant cash advance defense, the legal work can include determining whether the agreements are legitimate purchases of future receivables or loans that can be challenged.

One reason Subchapter V can cost less than traditional Chapter 11 is that it removes several procedures that ordinarily require substantial attorney time. The law was designed to reduce the expense of reorganizing a smaller business, particularly the costs associated with creditors' committees, disclosure statements, and competing reorganization plans.

Subchapter V Trustee Compensation

A trustee is appointed in every Subchapter V case. The trustee's primary job is to help the debtor and creditors work toward a consensual plan and oversee certain aspects of the case. Unlike a Chapter 7 trustee, a Subchapter V trustee ordinarily does not take control of the business. The debtor generally remains in possession and continues managing its operations, although a court can order otherwise in certain circumstances.

The Subchapter V trustee is compensated for the work involved in the case, and the bankruptcy court must approve the fees. If the business and its creditors can agree on a plan without lengthy disputes, trustee costs are usually lower. When creditors challenge the plan or other issues require additional attention, the trustee's fees can increase. Businesses should factor those costs into the bankruptcy budget from the beginning.

How Subchapter V Reduces Cost Compared to Standard Chapter 11

Subchapter V was designed to make Chapter 11 reorganization less expensive for eligible small businesses. It does that largely by removing procedures that can generate substantial legal and administrative costs in a traditional Chapter 11 bankruptcy.

The Small Business Reorganization Act of 2019, Pub. L. 116-54, established the Subchapter V framework under 11 U.S.C. §§ 1181–1195. As the American Bankruptcy Institute explains in its analysis of the legislation, reducing the costs of creditors' committees and disclosure statements was a central purpose of the reform. The debtor's exclusive right to propose a plan also eliminates the expense of competing creditor plans. These changes are a major reason Subchapter V can offer a more affordable path to reorganization.

No Mandatory Creditors' Committee

In a traditional Chapter 11 case, the court can appoint an official committee of unsecured creditors to represent creditors' interests. That committee can retain attorneys and financial advisors, and the bankruptcy estate pays their approved fees. In a contested case, those additional professional fees can become a substantial expense.

Subchapter V generally avoids that cost because the court ordinarily does not appoint an unsecured creditors' committee unless it orders one for cause. Without a committee, the estate typically does not have to pay a separate group of attorneys and financial professionals to represent unsecured creditors. This can remove a significant expense from the reorganization process.

No Disclosure Statement Requirement

Traditional Chapter 11 generally requires a separate disclosure statement that explains the reorganization plan and gives creditors the information they need to review it. Preparing that document, responding to objections, and getting court approval can mean additional hearings and attorney fees before creditors even vote on the plan.

Subchapter V generally does not require a separate disclosure statement. Instead, the reorganization plan must include certain information about the business, its liquidation analysis, and its ability to make the proposed payments. The court can require a disclosure statement in appropriate cases, but waiving the usual requirement saves time and legal expense in many Subchapter V proceedings.

No Competing Creditor Plans

In a traditional Chapter 11 case, the debtor initially has the exclusive right to propose a reorganization plan. Once that exclusivity period expires, creditors or other parties can seek to file competing plans. Disputes over competing proposals can lead to additional litigation over valuations, financial projections, and creditor treatment.

Subchapter V gives the business more control over the reorganization process. Under 11 U.S.C. § 1189, only the debtor can submit a plan. Creditors can still object and challenge whether the plan complies with the law, but they cannot propose their own competing plans. That helps avoid another round of litigation and the additional attorney fees that come with it.

No U.S. Trustee Quarterly Fees After Confirmation (Consensual Cases)

Traditional Chapter 11 cases are generally subject to quarterly U.S. Trustee fees while the case remains open, unless an applicable exception applies. Those fees can become a meaningful expense when a bankruptcy case continues for an extended period.

Subchapter V debtors generally are not required to pay U.S. Trustee quarterly fees. This is a separate cost advantage from filing fees, attorney fees, and trustee compensation. The savings depend on the circumstances and how long the case would otherwise remain open.

For more information about the differences between the two procedures, see the advantages of Subchapter V over Chapter 11. The choice involves more than cost. The business's debts, available cash flow, creditor disputes, and reorganization prospects all matter.

The Subchapter V Timeline and How It Controls Cost

Subchapter V is designed to move faster than a traditional Chapter 11 case. The court generally schedules a status conference within 60 days, and the business ordinarily has 90 days to file its reorganization plan. That shorter schedule can help reduce attorney fees, but it also means the business needs to be prepared before filing.

Every additional month in bankruptcy can mean more attorney time, court appearances, and professional fees. A business that already has its financial records organized, knows who its creditors are, and has a realistic plan for dealing with its debts is in a better position to avoid delays. Disputes with creditors can still slow things down, but getting the groundwork done early can make a real difference in the total cost.

The 60-Day Status Conference Under 11 U.S.C. § 1188

In a Subchapter V case, the bankruptcy court generally holds a status conference within 60 days after the order for relief. The court wants to know where the business stands on its reorganization plan and whether any issues must be resolved before it can approve the plan. Extensions are possible in certain circumstances, but businesses should not count on them. Businesses should have financial records and a clear restructuring strategy ready before filing so they can address those questions early.

The 90-Day Plan Filing Deadline Under 11 U.S.C. § 1189

The debtor generally must file its Subchapter V plan within 90 days after the order for relief. The court can extend that deadline when the need for additional time is attributable to circumstances for which the debtor should not justly be held accountable. An extension should not be assumed. Businesses that begin preparing their financial projections, creditor treatment, and proposed payment structure before filing are better positioned to meet the deadline and avoid unnecessary legal work.

Plan Payments Over Three to Five Years

When a Subchapter V plan is confirmed without the consent of all impaired creditor classes, the debtor generally must commit projected disposable income, or its equivalent value, over a period of three to five years. Consensual plans can be confirmed under different requirements. The payment period and the time required to confirm the plan are separate issues. A business that enters bankruptcy with reliable financial records and a workable proposal can reduce the time spent resolving pre-confirmation issues, which can help keep professional fees under control.

Subchapter V Cost for Businesses With MCA Debt

Businesses with merchant cash advance debt need to consider more than the cost of filing Subchapter V. They also need to consider what they will keep paying MCA funders if they do nothing, especially since bankruptcy can stop covered collection efforts through the automatic stay.

A business paying $800 a day across several MCA agreements can quickly find itself short on operating cash. Those payments get even harder to manage when sales slow. Bankruptcy has a cost, but so does continuing to make daily MCA payments. The business still has to cover payroll, vendors, rent, and other expenses while keeping its doors open.

The Automatic Stay and Immediate Cash Relief

The automatic stay generally takes effect as soon as a business files for bankruptcy. It prevents MCA funders from continuing most collection efforts on debts owed before the filing without bankruptcy court permission. This can include ACH withdrawals used to collect those debts, lawsuits, judgment enforcement, and turnover proceedings. However, the stay has exceptions and does not automatically unfreeze bank accounts or return money already collected. MCA funders can also ask the bankruptcy court for permission to continue collection.

Materials presented at the Western District of Virginia Annual Bankruptcy Practice Seminar on May 30, 2025 discuss MCA financing arrangements with effective annual rates of 50% or more. At that cost, continued payments can seriously strain a business's cash flow. For a company with several outstanding MCAs, the ability to stop covered collection activity while pursuing reorganization can be an important part of the financial analysis.

MCA Recharacterization and Plan Treatment

An MCA agreement is not automatically a sale of future receivables just because the funder calls it one. Courts look at the payment terms, whether payments can be adjusted when sales decline, and what rights the funder has if the business cannot pay. In CapCall, LLC v. Foster (In re Shoot the Moon, LLC), 635 B.R. 797 (Bankr. D. Mont. 2021), the bankruptcy court examined whether MCA transactions were actual sales or loans. The case shows that courts can look beyond the agreement's language to determine how to treat the transaction. If the MCA is found to be a loan, its treatment under a reorganization plan depends on the amount owed, the funder's security rights, and the applicable bankruptcy rules.

MCA restructuring through Subchapter V is not automatic. Some agreements are genuine purchases of receivables, while others contain terms that support an argument that the funder actually made a loan. Even if a court recharacterizes an agreement, that finding does not automatically reduce the amount owed or eliminate the funder's rights. Review the terms of each agreement before deciding whether recharacterization should be part of the bankruptcy strategy.

Comparing Subchapter V Cost to Continued MCA Repayment

A business with several high-cost MCA agreements should compare Subchapter V's expected expense with what it will continue paying if nothing changes. That means comparing the filing fee, estimated attorney fees, trustee compensation, and likely litigation costs with the remaining MCA obligations and daily withdrawals. In some cases, continued repayment over several months can cost more than the projected bankruptcy case. In others, disputes or a difficult reorganization can make filing substantially more expensive. The decision should be based on the company's actual numbers and whether a workable reorganization is possible.

Subchapter V Eligibility: The Debt Limit That Determines Access

Subchapter V is available only to businesses and other qualifying debtors that meet its eligibility requirements. The debt limit is an important part of that review, but it is not the only requirement.

The Current Permanent Debt Limit

To qualify for Subchapter V, a business generally must have no more than $3,024,725 in qualifying debt. The $7.5 million limit that applied during the COVID-19 pandemic has expired, so businesses need to use the current limit when considering their options. Not all debt counts the same way, and the calculation depends on which secured and unsecured debts qualify under bankruptcy law. If the business exceeds the limit, traditional Chapter 11 may still be an option, though the process is usually more involved and can cost more.

Who Is Excluded

Subchapter V is not available to every business. Stockbrokers and commodity brokers are excluded, and bankruptcy law may restrict other businesses. A company that is part of a larger corporate group may also struggle to qualify. The court will look at whether the business meets the legal requirements, including how it operates and what debts it owes. Before filing, review the company's debts, financial records, and ownership structure to confirm Subchapter V is an option.

What Happens If You Exceed the Limit

A business that exceeds the applicable Subchapter V debt limit generally cannot use that reorganization track and must consider traditional Chapter 11 or another available option. When MCA obligations make up a significant part of the company's debt, an attorney should review the agreements and determine how the claims must be counted. Recharacterizing an MCA as a loan does not automatically reduce the debt for eligibility purposes. For more information about the alternative process, see what is Chapter 11 bankruptcy for business.

What Business Owners Get Wrong About Subchapter V Cost

Myth: The $1,738 filing fee is the cost of Subchapter V.

Reality: The filing fee is only the beginning. Most of the expense comes from attorney fees and the Subchapter V trustee's work. A business that comes in with its records in order and fewer disputes with creditors usually costs less than one facing lawsuits, contested claims, or objections to its plan. The more work that gets done before filing, the less time counsel may need to spend sorting out problems afterward.

Myth: The Subchapter V trustee will take over the business.

Reality: In most cases, the business owner stays in control and continues running the company. The Subchapter V trustee works with the business and its creditors to help move the reorganization forward. That doesn't mean the trustee takes over the company's bank accounts or starts making day-to-day decisions. The court can order otherwise in certain situations, but most Subchapter V businesses continue operating under their existing management.

Myth: Subchapter V is only for very small businesses.

Reality: Subchapter V is not limited to businesses with a certain number of employees or a particular amount of annual revenue. Restaurants, medical practices, contractors, and other businesses can qualify if their debts and operations meet the legal requirements. The important step is determining which debts count toward the limit, especially when the company has several MCA agreements or other large obligations.

Myth: MCA obligations cannot be restructured in Subchapter V.

Reality: Just because an MCA funder calls its agreement a purchase of future receivables does not mean a court will necessarily treat it as one. Bankruptcy courts can examine whether the transaction is actually a loan, which can affect how the funder's claim is handled. That depends on the contract terms, the law that applies, and any valid liens or defenses. Recharacterization is something to evaluate, not something a business should count on happening.

Myth: Filing Subchapter V costs more than continuing to pay MCAs.

Reality: That depends on how much money the business is paying its MCA funders and whether it can keep up. When several funders are taking daily payments, the business may be spending money it needs for payroll, rent, and other operating expenses. Bankruptcy can stop covered collection efforts and give the business a way to deal with those obligations, but legal fees, trustee costs, and potential disputes still need to be included. The decision should be based on what the business is paying now and what a restructuring would actually cost.

Is Subchapter V the Right Choice for Your Business?

Subchapter V can offer eligible businesses a less expensive way to reorganize than traditional Chapter 11, but it is not the right choice for every company. The decision depends on the debt structure, available cash flow, creditor claims, and whether the business can support a realistic plan. The filing cost is only one part of that analysis.

When Subchapter V Makes Sense

• The business is still operating and generating revenue but has more debt than its current cash flow can support.
• Its qualifying debts fall within the applicable Subchapter V eligibility limit.
• MCA obligations are contributing significantly to the company's financial problems.
• The owners want to continue operating rather than liquidate the business.
• The company has a realistic way to fund a reorganization plan and meet its ongoing obligations.

When to Consider Alternatives

• The business exceeds the Subchapter V debt limit and needs to consider traditional Chapter 11.
• The company cannot realistically continue operating, so Chapter 7 bankruptcy or another wind-down process may be more appropriate.
• The debts are primarily personal or consumer obligations, so the individual, not the business, needs to review the available options.
• Commercial real estate debt is the main problem, and a negotiated loan workout, refinancing, or sale could resolve the issue without bankruptcy.

The Cost of Delay

Waiting can worsen a difficult financial situation. Continued MCA withdrawals, collection lawsuits, and frozen bank accounts can leave a business with less cash to operate or fund a reorganization. A company considering Subchapter V should have its finances and collection papers reviewed before those problems become harder to address. Early planning can help preserve options, but filing too quickly without a workable strategy can create its own costs. Base the timing on the business's financial condition and the collection activity already underway.

Frequently Asked Questions

What does it cost to file Subchapter V bankruptcy?

The court filing fee was $1,738 under 28 U.S.C. § 1930 and the United States Courts' 2025 fee schedule. But that is not what the entire bankruptcy case will cost. Most of the expense comes from attorney fees, trustee compensation, and any disputes that require additional legal work. A business with organized financial records and fewer creditor issues will usually spend less than one facing MCA litigation, disputed claims, or objections to its plan. To estimate the cost, an attorney needs to review what the business owes, its financial records, and the issues likely to come up during the case.

How does Subchapter V cost compare to standard Chapter 11?

Subchapter V generally costs less because it eliminates some of the work required in traditional Chapter 11. Under the Small Business Reorganization Act of 2019 and 11 U.S.C. §§ 1181–1195, most cases don't require an unsecured creditors' committee or a separate disclosure statement, and creditors cannot file competing reorganization plans. The American Bankruptcy Institute has identified these changes as part of the effort to make reorganization less expensive for small businesses. Subchapter V debtors also generally avoid U.S. Trustee quarterly fees. The savings depend on how much legal work the case requires and whether creditors challenge the plan.

Who pays the Subchapter V trustee, and how much does the trustee cost?

The Subchapter V trustee is paid through the bankruptcy case, with the court approving fees. No single trustee fee applies to every business because the amount depends on the work involved. The trustee generally works with the business and its creditors on the reorganization rather than taking over daily operations. If the case involves lengthy negotiations, creditor objections, or contested claims, the trustee may need more time, which can increase costs. Businesses should factor those fees into their decision about whether they can afford to file.

Can Subchapter V help a business drowning in MCA debt?

Yes, if the business qualifies and has a reasonable reorganization plan. Filing generally triggers an automatic stay, which can stop covered MCA collection efforts on debts owed before bankruptcy. An attorney can also review whether the MCA agreements are loans rather than purchases of future receivables. Bankruptcy courts have examined that issue in cases such as CapCall, LLC v. Foster (In re Shoot the Moon, LLC), 635 B.R. 797 (Bankr. D. Mont. 2021). Filing does not automatically release frozen funds, and a court is not required to treat an MCA as a loan or reduce the amount owed. The business's financial condition and the terms of its MCA agreements will determine what options are available.

Does my business qualify for Subchapter V?

That depends on what the business does, how much qualifying debt it has, and whether it meets other bankruptcy law requirements. The applicable debt limit is $3,024,725, not the temporary $7.5 million limit that was available during the pandemic. Some businesses are excluded, and being part of a larger corporate group can also affect eligibility. An attorney should review the company's full debt picture, including MCA agreements, secured loans, and other obligations, before deciding whether Subchapter V is an option.

Are there ongoing fees after a Subchapter V plan is confirmed?

Costs can follow confirmation, so business owners should plan for more than the initial filing. The company must make the payments required under its confirmed plan, and additional legal or professional fees may arise if work continues after confirmation. Subchapter V debtors generally do not have to pay U.S. Trustee quarterly fees, a cost they can usually avoid compared with traditional Chapter 11. Other expenses depend on what the plan requires and whether creditors or other parties raise additional issues. Before agreeing to a plan, the business should understand what it will owe and whether it can afford those payments.

The Decision Framework

Subchapter V was created to give qualifying small businesses a more affordable way to reorganize. The $1,738 filing fee is an upfront expense, but the bigger savings come from the process itself. Fewer procedural requirements, no competing creditor plans, and the general absence of U.S. Trustee quarterly fees can reduce a case's cost. For businesses dealing with MCA agreements carrying effective annual rates of 50% or more, the potential relief from covered collection activity also deserves serious consideration.

The question is whether the business has enough operating value and future cash flow to make reorganization worthwhile. A company that can keep serving customers and meeting its ordinary expenses after addressing its debt has different options than one that is no longer financially viable. The earlier a company reviews these questions, the more room it has to choose an appropriate strategy.

J. Singer Law Group handles Subchapter V bankruptcy, MCA defense, and commercial restructuring matters. The firm represents businesses across the United States on MCA issues. When Singer Law Group represents a business in an MCA lawsuit, that lawsuit must be filed in New York, although the business itself can be located anywhere in the country. The firm's restructuring experience includes two former federal bankruptcy clerks: Ira Reid, who clerked for Judge Goetz in the Eastern District of New York, and Jeb Singer, who clerked for Judge Bernstein in the Southern District of New York. The team also brings former Baker McKenzie restructuring experience to matters involving MCA debt and business reorganization.

For a consultation about Subchapter V costs, eligibility, and available restructuring options, call (917) 905-8280.