Miami small business owners facing financial distress have more options than ever. From Subchapter V reorganization to Chapter 7 liquidation, here is how to choose.
| Option | Best For | Keep Operating? | Filing Fee |
|---|---|---|---|
| Chapter 7 | Businesses that should close | No | $338 |
| Chapter 13 | Sole proprietors (debt under $2.75M) | Yes | $313 |
| Subchapter V | Businesses with debt under $7.5M | Yes | $1,738 |
| Chapter 11 | Larger businesses | Yes | $1,738 |
Subchapter V of Chapter 11 was created in 2019 specifically for small businesses:
Miami's economy includes tourism, real estate, international trade, and a large gig/service sector. Small business bankruptcies in the S.D. Fla. frequently involve real estate LLCs and service companies. Florida's lack of state income tax preserves more cash flow for plan payments in Chapter 13 and Subchapter V cases.
Many Miami owners sign personal guarantees on leases, credit lines, and SBA loans. When the business fails, these make you personally liable.
Florida's exemptions (Unlimited (half-acre in municipality) homestead, $1,000 vehicle) protect your personal assets, and the remaining guaranteed debt can be discharged.
Yes. Options include Chapter 7 (liquidation), Chapter 13 (sole proprietors, debt under $2.75M), or Subchapter V (businesses with debt under $7.5M). The best option depends on your structure and goals.
A streamlined Chapter 11 for businesses with debts under $7.5 million. No creditor committee, owner retains equity, plan due within 90 days, dedicated trustee facilitates the process.
In Chapter 13 and Subchapter V, yes. You continue operating while repaying through a plan. Chapter 7 typically means liquidation.
Personally guaranteed business debts must be addressed in your individual bankruptcy. Florida exemptions protect your personal assets.
Not necessarily. Consult an attorney. If the LLC has debts you guaranteed, those transfer to your personal case.
Chapter 7: $338. Chapter 11/Subchapter V: $1,738. Subchapter V is much less expensive overall than traditional Chapter 11.
Use the free 1328(f) screener to check whether a prior discharge affects your eligibility for a new bankruptcy discharge.
Free Discharge Screener Means Test Guide