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Las Vegas Bankruptcy Lawyers / Subchapter V for Small Business Owners

Subchapter V Bankruptcy Lawyers for Small Business Owners in Las Vegas

For many small business owners, the line between business and personal debt is blurry at best. You didn’t just invest money into your company; you invested your signature on loans, personal guarantees, leases, or vendor accounts.

So when the business struggles, creditors often come knocking at your door, too.

Fortunately, you have more options than just shutting the doors and hoping the bills go away. Subchapter V — a special streamlined version of Chapter 11 — is a powerful tool that can help you personally restructure overwhelming business debt, protect assets, and carve a realistic path forward.

At Larson & Zirzow, our Las Vegas Subchapter V bankruptcy lawyers help small business owners throughout Las Vegas understand how Subchapter V can protect not just the company, but the owner behind it.

When Business Debt Becomes Personal

Small business owners often wear many hats: manager, investor, bookkeeper, and most times, personal guarantor. It’s common for owners to sign guarantees for:

  • Business loans or lines of credit
  • Equipment loans or vehicle leases
  • Commercial real estate leases
  • Merchant Cash Advances (MCAs) or Revenue Purchase Agreements (RPAs)
  • SBA, EIDL, or COVID-era Small Business Loans

So even if you formed an LLC to limit liability, creditors can still reach you personally when the business can’t pay its bills. In tough times, your house, savings, and wages may be on the line unless you act quickly to protect them.

Subchapter V Can Work for Individuals, Too

When most people hear “Chapter 11,” they think of big companies like airlines or retail chains reorganizing billions in debt. But Chapter 11 is available to individuals, too, especially when their debts are too large for Chapter 13.

Subchapter V is the small business version of Chapter 11. If your debts are primarily business-related and under about $3.4 million (as of 2025), you may qualify for this faster, more affordable path.

Who Might Benefit?

Consider a member-manager of an LLC who obtained an SBA loan during COVID to cover payroll and other operating expense, who then took out a Merchant Cash Advance loan to keep the business running during the slow economic recovery. Maybe you personally guaranteed the MCA loan. Maybe the MCA’s security interest is inferior to the SBA’s, but the MCA is taking business revenue needed to keep up with payments, and now creditors are threatening to sue you personally.

In these cases, Subchapter V can:

  • Put an Automatic Stay in place to stop creditor lawsuits and collection actions against you personally.
  • Give you time to propose a reorganization plan that restructures business debt along with any related personal liability.
  • “Cram down” certain secured debts to the value of their collateral, and “strip off” or avoid inferior security interests in business assets.
  • Help you avoid losing your house or other personal assets by negotiating manageable payment terms.
  • Let you keep earning a living while you make good-faith payments under the plan.

Why Not Chapter 7 or Chapter 13?

For some small business owners, Chapter 7 could wipe out personal liability for business debts, but you may have unprotected non-exempt assets that could be liquidated. Chapter 7 may not help if you want to keep running the business and retain equity.

Chapter 13 is a great tool for wage earners with regular income who want to reorganize, but to be eligible your unsecured debts must be less than about $526,000 (as of 2025, adjusted periodically), and your secured debts must be less than about $1,580,000 (as of 2025, adjusted periodically). If your combined personal and business debt pushes you over one of the Chapter 13 limits, Subchapter V may be your next best option.

Subchapter V vs. Traditional Chapter 11

Traditional Chapter 11 is notoriously complex, expensive, and time-consuming, and it is often out of reach for small business owners who need affordable relief now, not years down the road.

Subchapter V was created to fix that problem. It eliminates many aspects of Chapter 11 — like creditors’ committees, ongoing reporting requirements, and quarterly fees — and provides a dedicated trustee to help move the process along. Plans move faster, cost less, and don’t require you to put in new money to keep your assets, as long as the plan is fair and feasible.

Can Subchapter V Be Used to Wind Down?

Yes. Sometimes the goal of a Subchapter V plan isn’t to save the company, but to protect the owner during a structured wind-down. For example, a member-manager may want to close an LLC, sell assets for the best possible value, pay off creditors fairly, and wrap things up in an orderly fashion. Subchapter V can provide tools to do exactly that while keeping creditors at bay and avoiding a sudden collapse that could leave the owner exposed.

What Happens to Personal Assets in Subchapter V?

In a Subchapter V case, your plan must show how you’ll pay creditors using future income or liquidating certain business assets. You’ll work with your attorney to identify any personal assets that may be at risk and use bankruptcy exemptions and negotiation strategies to protect them as much as possible.

Unlike Chapter 7, you don’t have to surrender all non-exempt property immediately. Instead, you have a realistic path to keep critical personal assets like your home, car, and business assets, while making payments over three to five years.

The Power of the Automatic Stay

As soon as you file Subchapter V, the Automatic Stay kicks in. This freezes collection lawsuits, wage garnishments, bank levies, and harassing phone calls. It can also stop Merchant Cash Advances and Revenue Purchase Agreements from restricting your cash flow, freeing up funds needed to rebuild and pay back creditors.

If a creditor wants to lift the stay and continue pursuing you personally, they must get the court’s permission, which rarely happens without good reason, particularly if you’re complying with the terms of a plan that’s binding on all creditors.

This breathing room gives you leverage to negotiate settlements, reduce balances, and structure payments you can actually afford.

How Larson & Zirzow Helps Small Business Owners in Las Vegas With Subchapter V Bankruptcy

Navigating the complexities of Subchapter V as a small business owner isn’t easy, but it can be with the right guidance. Larson & Zirzow is not a “volume filer.” We take the time to understand your unique mix of business and personal debt, your real goals, and what success looks like for you, your family, and your business.

Among our highly experienced team, you’ll find a Board-Certified Business Bankruptcy Specialist, giving you deep, proven expertise in using Subchapter V to protect small business owners like you.

We handle every detail of your case, from eligibility checks to plan development, creditor negotiations, and final discharge. We also help you think through alternatives, like Chapter 7 or 13, and non-bankruptcy options if they’re a better fit for your situation.

Ready to Protect What You’ve Built?

If you’re a small business owner in Las Vegas who is losing sleep over personal guarantees, lawsuits, or the risk of losing control of your business and personal assets, like your home, don’t wait. The sooner you get experienced advice, the more tools you have.

Contact Larson & Zirzow today for a confidential consultation. We’ll help you understand how Subchapter V can save your business, protect your personal assets, or guide you through a dignified wind-down with your family’s future still secure.