Subchapter V Bankruptcy Lawyers for Small Businesses in Las Vegas

When your small business is buried in debt but you still believe in what you’ve built, you need more than hope; you need practical solutions that give you room to breathe and a fair chance to either survive or close with dignity. That’s where Subchapter V comes in.

Subchapter V is a special version of Chapter 11 bankruptcy designed just for small businesses. It gives owners a faster, more affordable way to reorganize debt or, when needed, to wind down operations in an organized way that protects employees, clients, and the community.

At Larson & Zirzow, our Las Vegas Subchapter V bankruptcy lawyers help small businesses in Las Vegas use Subchapter V strategically, whether that means turning things around or closing the doors on your own terms.

What Is Subchapter V?

Subchapter V is part of the Small Business Reorganization Act (SBRA), which became law in 2020. Before then, traditional Chapter 11 was simply too complicated and expensive for most small businesses. Large corporations could afford the drawn-out process, creditors’ committees, and mountains of legal work, but mom-and-pop shops and local service providers could not.

Subchapter V fixed that problem by streamlining Chapter 11 for businesses with non-contingent secured and unsecured debts below about $3.4 million (amount is adjusted periodically). If your business qualifies as a small business, it can be reorganized or strategically wound down through a simpler, more flexible, less expensive process.

How Does Subchapter V Work?

When you file Subchapter V, the Automatic Stay stops creditors from suing, foreclosing, or seizing assets. Unlike Chapter 7, you stay in control of your business and work with a court-appointed Subchapter V trustee, not to run the company, but to help negotiate with creditors and guide the process.

You submit a plan of reorganization (or in some cases, a structured liquidation plan) that shows how you’ll pay creditors using future income or proceeds from selling assets. In Subchapter V, for example, you can stretch out payments over three to five years, “cram down” certain secured debts, avoid or “strip off” security interests of creditors, reject leases or contracts that hurt cash flow, and sell assets in an orderly way to pay creditors.

Subchapter V does not involve a creditors’ committee in most cases, which cuts down on legal costs. And unlike traditional Chapter 11, owners can usually keep their equity in the business without putting in any new money.

Who Can Benefit From Subchapter V?

Subchapter V is tailor-made for the backbone of Nevada’s economy: small businesses like restaurants, contractors, franchises, boutique retailers, day care centers, and medical or professional practices.

So, who can benefit from Subchapter V in Las Vegas? Real-life examples include:

• A marketing company that entered into multiple high-interest Merchant Cash Advance loans and Revenue Purchase Agreements after COVID to stay afloat, only to find that the daily payments choked the business of cash flow needed to cover overhead, payroll, and operating costs.
• A child care center whose working families rely on it, but due to rising costs and staffing shortages, needs time to reorganize debt, renegotiate leases, or close responsibly without leaving parents in the lurch.
• A local contractor with several good contracts lined up, but with old debts and lawsuits threatening to bleed the business dry before new money comes in.
• A franchisor struggling to stay afloat and repay SBA loans due to the cost of defending collection lawsuits.

Subchapter V gives small businesses like these a real chance to turn things around or, if reorganization isn’t practical, wind down in an orderly way.

Subchapter V for an Orderly Wind-Down

Most people think of bankruptcy reorganization as a tool to save a business, and it is. But sometimes the best solution is a structured exit. Subchapter V can do that, too.

For some small businesses, an immediate Chapter 7 liquidation would effectively shut down operations overnight. Employees lose their jobs, customers are left scrambling, and creditors may only get pennies on the dollar from a fire sale of assets.

Subchapter V can buy a small business time for its owners to create a plan to:

• Continue limited operations long enough to wrap up services.
• Transition clients or patients to other providers.
• Sell assets in a way that brings better value than an auction.
• Negotiate settlements with creditors on more favorable terms.

This is especially valuable for businesses like daycare centers, medical practices, or service providers whose customers rely on them for continuity and care. The business can close without leaving customers and emplyees stranded, winding down with more dignity, better outcomes for creditors, and fewer loose ends for the owner.

What if You Have Personal Guarantees?

Many small business owners sign personal guarantees on loans, credit lines, or leases. Subchapter V can help restructure the business debt, which may indirectly protect you personally by reducing what creditors can collect.

However, if there’s significant personal liability remaining, you may also need a separate personal bankruptcy, such as a Chapter 7 or Chapter 13, to fully protect your home, wages, and future income. Larson & Zirzow knows how to structure and time coordinated filings when necessary, so nothing slips through the cracks.

Why Subchapter V Instead of Chapter 7?

Some owners assume they must choose between keeping the business open and liquidating through Chapter 7. But an immediate Chapter 7 often gives owners and creditors the least control.

Subchapter V can buy you time to:

• Protect your reputation in the community.
• Help customers transition smoothly.
• Negotiate better settlements with creditors.
• Avoid legal disputes over how assets are sold.

It’s a practical, humane way to exit — or to fight for a second chance if the core business is still worth saving.

How Larson & Zirzow Helps

Subchapter V is powerful, but it’s also technical and new enough that not every bankruptcy lawyer knows about its benefits or how to use it effectively. At Larson & Zirzow, we’ve handled Subchapter V cases for exactly the kinds of local businesses that keep Las Vegas running. We don’t just file the paperwork. We help you develop a realistic plan, negotiate with creditors, protect your personal interests, and move you through the process efficiently. Our experienced legal team includes a Board-Certified Business Bankruptcy Specialist, which means you have proven expertise on your side when your business’s future is at stake.

Let’s Find Your Best Path Forward

If your small business is struggling to survive — whether you’re needing to reorganize or looking for a responsible way to wind down — don’t guess at your options. Subchapter V could be the tool that buys you the time and control you need.

Contact Larson & Zirzow today for a confidential consultation. We’ll help you decide if Subchapter V is right for you, what your realistic goals should be, and how to protect what matters most as you take your next step.