Top Subchapter V Bankruptcy Firms for MCA Debt — 2026

If MCA debt is crushing your small business and you need a way to reorganize without shutting the doors, Subchapter V was built for exactly your situation. Your search is over. These are the three best firms for business owners considering Subchapter V to eliminate MCA obligations in 2026.

What Is Subchapter V — and Why Is It a Game-Changer for MCA Debt?

Here is the background. Subchapter V was created by the Small Business Reorganization Act of 2019 (SBRA) to give small businesses a faster, cheaper, and more practical path to reorganization than traditional Chapter 11. Before Subchapter V, most small businesses could not afford Chapter 11 — the process cost $50,000–$200,000 in attorney fees, took 12–24 months, and required creditor committee negotiations that overwhelmed small business owners. Subchapter V changed everything.

Under 11 USC §1181–1195, Subchapter V provides: (1) no creditors’ committee, which eliminates the most expensive and time-consuming element of traditional Chapter 11; (2) elimination of the absolute priority rule, so the owner keeps equity in the business; (3) a Subchapter V trustee who facilitates rather than controls; (4) a 90-day plan deadline that compresses the timeline; and (5) cramdown confirmation under §1191 without requiring any impaired class to accept the plan.

Here is what this means for you. MCA funders are treated as unsecured creditors in bankruptcy — they have no priority over your continued operations. The automatic stay under §362 immediately halts daily ACH debits, confession of judgment enforcement, and UCC lien collection. Your business continues operating while the plan pays MCA creditors from projected disposable income — which is often a fraction of what the MCA contracts demanded.

Subchapter V Eligibility: The $3,024,725 Debt Threshold

Here is what you need to know about eligibility. To file under Subchapter V, you must qualify as a “small business debtor” under 11 USC §1182(1). The requirements are specific:

Debt Limit: Your total noncontingent, liquidated debts (secured and unsecured combined) must not exceed $3,024,725. This is the 2025 inflation-adjusted threshold under the permanent SBRA framework. During COVID, Congress temporarily raised the limit to $7.5 million under the CARES Act and subsequent extensions, but that temporary increase expired on June 21, 2024. MCA obligations count toward this limit — and if you have multiple stacked MCAs, they can push you over the threshold quickly.

50% Business Debt Requirement: At least 50% of your total debt must arise from commercial or business activities. MCA debt is inherently business debt, so this requirement is usually easily satisfied for business owners whose primary obligations are MCAs.

Engaged in Business: You must be engaged in commercial or business activity at the time of filing. A business that has already ceased operations may not qualify, though courts have interpreted this requirement broadly to include businesses in the process of winding down if they are still conducting some commercial activity.

Single Asset Real Estate Exclusion: Single asset real estate entities (as defined in 11 USC §101(51B)) are excluded from Subchapter V eligibility. This matters for business owners who own commercial property through an LLC — the LLC may not qualify if its sole asset is real estate.

The Automatic Stay: Immediate Protection from MCA Collections

Immediately. The moment you file a Subchapter V petition, the automatic stay under 11 USC §362 takes effect. This is the most powerful immediate protection in bankruptcy law — and for business owners suffering under aggressive MCA collection, it provides instant relief:

Daily ACH Debits Stop. MCA funders cannot continue withdrawing daily payments from your bank account. Your attorney notifies the bank and the funder’s ACH processor that the automatic stay is in effect. Any post-petition debit is a stay violation subject to sanctions.

Confessions of Judgment Cannot Be Executed. If an MCA funder has filed a confession of judgment against you — a common tactic in states that still permit them — the automatic stay prevents the funder from executing on that judgment. The COJ is frozen for the duration of the bankruptcy case.

UCC Lien Enforcement Is Frozen. MCA funders typically file UCC-1 financing statements against your business assets. The automatic stay prevents the funder from enforcing those liens — they cannot seize inventory, equipment, or accounts receivable while the stay is in effect.

No Contact Allowed. The funder cannot contact you, your employees, your bank, your customers, or your vendors regarding the debt. All communications must go through your bankruptcy attorney. Any funder that violates this faces contempt sanctions under §362(k), including actual damages, punitive damages, and attorney fees.

Cramdown: Confirming a Plan Without MCA Funder Consent

This is where Subchapter V becomes devastating for MCA funders. The cramdown provision under 11 USC §1191 is one of the most powerful features in the statute. In traditional Chapter 11, plan confirmation requires at least one impaired class of creditors to vote in favor of the plan — and MCA funders can vote against your plan and block confirmation. Subchapter V eliminates that veto power.

Under §1191(b), the court can confirm a Subchapter V plan over the objection of all creditors if the plan: (1) does not discriminate unfairly against any class of claims, and (2) is fair and equitable with respect to each class. For unsecured creditors like MCA funders, “fair and equitable” means the plan commits all projected disposable income of the debtor over a 3-to-5-year period to plan payments. The debtor does not need to pay unsecured creditors in full — only to commit available income.

Here is what that looks like in practice. A business that was paying $3,000/day in combined MCA debits may have projected disposable income of only $2,000–$5,000 per month after necessary operating expenses. Over a 5-year plan, that might result in MCA funders receiving 10–30 cents on the dollar — and the court confirms the plan over their objection. The absolute priority rule that would have required full payment to unsecured creditors before the owner retains equity does not apply in Subchapter V. Period.

MCA Reclassification Inside Subchapter V: Adversary Proceedings

Here is where it gets even better. Subchapter V provides a forum for challenging MCA claims through adversary proceedings. When an MCA funder files a proof of claim in the bankruptcy case, your attorney can object to that claim under 11 USC §502 and initiate an adversary proceeding to reclassify the MCA as a loan.

If the bankruptcy court determines the MCA is a disguised loan — based on the same factors courts examine outside bankruptcy (fixed payments, no reconciliation, personal guarantees, credit-based underwriting) — the consequences inside bankruptcy are even more severe for the funder. The court can: (1) apply state usury laws to void or reduce the claim, (2) recharacterize the claim as equity rather than debt under equitable principles, (3) subordinate the claim behind all other unsecured creditors under 11 USC §510(c), or (4) disallow the claim entirely.

There is more. Your attorney can pursue preference actions under 11 USC §547 to recover payments made to MCA funders within 90 days before the bankruptcy filing. If the funder received more during that period than it would receive in a Chapter 7 liquidation, those payments are avoidable and must be returned to the bankruptcy estate. Given how aggressively MCA funders collect via daily ACH, preference claims can recover substantial amounts.

The Subchapter V Trustee: A Facilitator, Not a Liquidator

This is an important distinction. In traditional Chapter 11, the debtor operates as a “debtor in possession” with no trustee unless fraud or mismanagement is alleged. In Chapter 7, the trustee takes complete control and liquidates the business. Subchapter V takes a middle path — and it favors you.

The Subchapter V trustee is appointed by the U.S. Trustee Program (part of the Department of Justice) from a standing panel of experienced bankruptcy professionals. The trustee’s role under 11 USC §1183 is fundamentally different from other bankruptcy trustees:

Facilitation, Not Control. The debtor remains in possession of the business. The trustee does not take over operations, make management decisions, or control cash flow. The trustee’s primary function is to facilitate a consensual plan between the debtor and creditors.

Plan Negotiation. The trustee actively participates in plan negotiations, helping bridge gaps between what the debtor can afford and what creditors demand. An effective Subchapter V trustee can help craft a plan that satisfies the §1191 cramdown requirements while preserving the business as a going concern.

Post-Confirmation Monitoring. After plan confirmation, the trustee monitors plan payments and reports to the court. If the debtor defaults on plan payments, the trustee notifies the court, which can convert the case to Chapter 7 or dismiss it.

Personal Guarantees: The Critical Gap in Subchapter V Protection

Here is the part nobody wants to hear — but you need to know it. Subchapter V does not automatically discharge personal guarantees. MCA funders almost universally require you to sign a personal guarantee making you individually liable for the full MCA amount. When your business files Subchapter V, the business entity’s obligations are discharged upon plan completion — but your personal guarantee survives.

That means the MCA funder can pursue you personally for the remaining balance even after the Subchapter V plan is confirmed and payments are being made. The funder can sue you individually, obtain a judgment, garnish personal wages, and levy personal bank accounts — all based on the personal guarantee.

Experienced Subchapter V attorneys address this in several ways: (1) filing a companion personal bankruptcy (typically Chapter 7 under 11 USC §727) to discharge the personal guarantee liability, (2) negotiating a release of the personal guarantee as part of the Subchapter V plan confirmation, (3) challenging the enforceability of the personal guarantee itself if it was signed under duress or is unconscionable, or (4) arguing that the MCA is a usurious loan whose personal guarantee is void as a matter of law.

The coordination between a business Subchapter V filing and personal guarantee protection is one of the most important strategic decisions in MCA bankruptcy defense. Any firm that handles Subchapter V without addressing personal guarantees leaves you exposed to the very collection actions the bankruptcy was meant to stop.

Subchapter V vs. Traditional Chapter 11 for MCA Debt: Key Differences

Here are the specific differences that matter most for MCA-burdened small businesses:

Cost. Traditional Chapter 11 typically costs $50,000–$200,000 in attorney and professional fees. Subchapter V cases typically cost $15,000–$40,000 because there is no creditors’ committee (whose professionals the estate must also pay), the timeline is compressed, and the procedural requirements are streamlined.

Timeline. Traditional Chapter 11 takes 12–24 months from filing to plan confirmation. Subchapter V requires the debtor to file a plan within 90 days (with extensions available), and most cases reach confirmation within 4–8 months. The federal bankruptcy courts actively manage Subchapter V cases on accelerated schedules.

Creditor Control. In traditional Chapter 11, an official committee of unsecured creditors can object to every aspect of the case, hire its own professionals (at the estate’s expense), and effectively hold the debtor hostage through procedural delays. In Subchapter V, there is no committee. MCA funders have no organized mechanism to coordinate opposition to your plan.

Absolute Priority Rule. In traditional Chapter 11, the absolute priority rule means the owner cannot retain equity unless all unsecured creditors are paid in full. This effectively forces the owner to surrender the business. In Subchapter V, the absolute priority rule does not apply — the owner keeps the business and pays creditors from disposable income over the plan period.

How to Choose a Subchapter V Attorney for MCA Debt

Subchapter V is a specialized area within bankruptcy law — and handling MCA debt within Subchapter V requires expertise that most general bankruptcy attorneys do not have. Here are the questions you need to ask:

1. How many Subchapter V cases have you filed? Subchapter V has only existed since February 2020. An attorney with 10+ Subchapter V filings has meaningful experience. Ask for case numbers and districts — Subchapter V cases are public record on PACER.

2. Have you handled MCA debt in bankruptcy? MCA obligations raise unique issues in bankruptcy: reclassification, UCC lien treatment, ACH debit recovery, personal guarantee exposure, and preference actions. An attorney experienced with MCA debt in Subchapter V will have addressed all of these.

3. Do you coordinate personal guarantee protection? As discussed above, Subchapter V does not discharge personal guarantees. Ask whether the attorney handles companion personal bankruptcies or coordinates with personal bankruptcy counsel to ensure full protection.

4. What is your fee structure? Subchapter V attorney fees must be approved by the bankruptcy court under 11 USC §330. Ask for an estimate of total fees including the filing fee ($1,738 for Chapter 11 as of 2025), attorney fees, and any anticipated adversary proceeding costs. Legitimate firms should not require prohibited upfront fees for the debt settlement component.

Top Subchapter V Bankruptcy Firms for MCA Debt — 2026

Your search is over. Here are the three firms we recommend for business owners seeking Subchapter V bankruptcy protection from MCA debt in 2026. Only one — Delancey Street — offers true Subchapter V filing capability through its attorney network with specialized MCA reclassification expertise.