Every term you'll encounter — defined so it actually makes sense.

A short hearing required in every bankruptcy case, usually 3–6 weeks after filing. You sit before the trustee (not a judge) and answer questions about your finances under oath. Creditors are notified and may attend, though in most Sub-V cases few or none show up. Missing it can result in dismissal.

Money your business owes suppliers and vendors for goods or services already received but not yet paid. Line 24 of the MOR ("Unpaid Bills") only asks for post-petition AP. Pre-petition AP is handled through your schedules and plan, not the MOR.

Money customers owe your business for goods or services already delivered. Pre-petition AR is an estate asset; post-petition AR is current income. Unlike payables, line 25 of the MOR reports pre- and post-petition receivables together as a single combined total.

Recording income when it's earned (when you invoice) and expenses when incurred (when you receive the bill) — the opposite of cash basis. The MOR typically accommodates both; confirm with your accountant which basis your books use.

A cost incurred after your filing date that's necessary to operate the business and administer the case. Administrative expenses have priority and must be paid in full before any plan can be confirmed — post-petition rent, payroll, vendor invoices, professional fees, trustee fees.

Everything you or your business owned on the filing date — physical (equipment, inventory, vehicles), financial (bank accounts, receivables), and intangible (licenses, IP, contracts). The estate is managed for the benefit of creditors during the case.

The lawyer hired by the debtor business to represent it in the case — files documents, advises on legal obligations, negotiates with creditors, drafts the plan, and attends hearings. In Sub-V, the debtor's attorney fees must be disclosed and are typically subject to court approval.

The moment you file, federal law automatically stops almost all collection actions against your business and personal assets (if a personal guarantee exists). One of the most powerful protections in bankruptcy. Creditors who violate it can be sanctioned.

A statement of what your business owns (assets), owes (liabilities), and its net worth (equity) at a point in time. Total Assets = Total Liabilities + Equity — it must literally balance. The MOR requires one as of the last day of each reporting month.

A federal legal process that gives individuals and businesses that cannot pay their debts relief. In business bankruptcy the goal is typically reorganization (restructuring and continuing) or liquidation (selling assets and closing). Subchapter V is a reorganization bankruptcy.

The federal law governing all U.S. bankruptcy cases. Subchapter V of Chapter 11 was added in 2019 by the Small Business Reorganization Act. The Code is uniform across all 50 states, though local court rules can add requirements.

The legal entity created when you file that holds all your assets. Everything you own at filing becomes property of the estate. In Chapter 11 you remain in control as the Debtor-in-Possession and continue to manage the business.

The document filed with the court to officially begin the case — for businesses, typically a Voluntary Petition for Non-Individuals (Official Form 201). The date it's filed is your "petition date," the most important date in your entire case.

Detailed financial documents filed at the start of a case listing all assets, debts, contracts, income, and expenses. Filed once at the start — not monthly like the MOR. Amendments can be filed if the originals contain errors.

Recording income when cash is actually received and expenses when actually paid, regardless of when the work was done. Most small businesses use cash basis, and Form 425C is typically prepared this way — but confirm with your accountant.

The actual movement of cash in and out of your business. Different from profit: a profitable business can run out of cash if customers pay slowly or expenses fall due before income arrives. The MOR's cash schedule tracks actual cash flow, not accounting profit.

The section of the Code that lets businesses restructure debts while continuing to operate. The business stays open, negotiates a repayment plan, and the plan is confirmed by the court. Subchapter V is a streamlined version designed for small businesses.

A bankruptcy where non-exempt assets are sold by a trustee to pay creditors and the business is closed. Unlike Chapter 11, it's not a reorganization — the business doesn't survive. A Chapter 11 case that isn't going well can be converted to Chapter 7.

A creditor's formal request to be paid from the estate. Creditors typically file a Proof of Claim listing how much they're owed and why. Claims are secured, priority unsecured, or general unsecured, and must be filed by the court's bar date.

Case Management/Electronic Case Files — the federal courts' electronic filing platform. All court documents (including MORs) are filed through it; your attorney handles this. You can view filed documents through PACER.

Property that secures a debt. If you borrowed to buy equipment, that equipment is the collateral; if you default, the lender can take it. In bankruptcy, the collateral's value determines how much a secured creditor can claim.

The court order approving your Plan of Reorganization. Once confirmed, the plan binds you and all creditors. In Sub-V, the court can confirm even if not all creditors accept — a "cramdown." Confirmation is a major milestone.

When a court confirms a plan despite creditor objections or without the consent of all creditor classes. Sub-V was specifically designed to make cram down easier for small businesses, reducing creditors' leverage in negotiations.

Any person or company your business owes money to — banks, landlords, suppliers, employees, the IRS, credit card companies. Creditors are classified secured, priority, or general unsecured depending on the nature of their claim.

In standard Chapter 11, unsecured creditors can form an official committee with legal fees paid by the estate. A key feature of Sub-V is that a creditors' committee is not appointed unless the court orders one for cause — significantly reducing cost and complexity.

Running totals on the MOR that add up all activity from your petition date through the end of the current month. Form 425C requires both current-month and cumulative figures; each month you add the current month to the prior cumulative total.

The business (or individual) that filed for bankruptcy. In a Sub-V business case the debtor is usually the entity — an LLC, corporation, or partnership — and the owner who runs it is often called the "principal." Court documents refer to your company as "the Debtor."

When a business files Chapter 11 and keeps operating, it's the Debtor-in-Possession. You retain control of the business and its assets but owe fiduciary duties to creditors, and you can't make major decisions (selling assets, borrowing, paying old debts) without court approval.

A new bank account you must open after filing. All post-petition income and expenses flow through it. It must be titled with your business name, the words "Debtor-in-Possession," and your case number, and the bank marks statements "DIP." You can't use pre-petition accounts after filing.

New loans or credit borrowed during the case to fund operations. It requires court approval. Because DIP lenders take on significant risk, their loans get "super-priority" administrative-expense status — paid before almost all other creditors.

The court order that permanently eliminates remaining eligible debts at the end of a successful case. In Sub-V, discharge comes after you complete all payments under your confirmed plan. Not all debts can be discharged — taxes (generally), student loans, and fraud-related debts typically survive.

In standard Chapter 11, before creditors vote on a plan the debtor must file a detailed Disclosure Statement explaining it. A major advantage of Sub-V is that a separate Disclosure Statement is NOT required — saving significant time and expense.

In Sub-V, the plan typically must commit all "projected disposable income" to paying creditors over 3–5 years. Disposable income is what's left after ordinary and necessary business expenses. The trustee reviews whether your projections are realistic.

The official chronological record of every document filed in your case. Each filing gets a docket number. You can view the entire docket and download documents through PACER. Every MOR, motion, order, and notice has its own entry.

The date your confirmed plan goes into effect and plan payments begin — usually a set number of days after confirmation unless the plan specifies otherwise.

A holder of an ownership interest in the debtor business — shareholders, LLC members, partners. In bankruptcy, equity holders are last in line; creditors must be paid first.

A contract where both parties still have significant obligations remaining. In bankruptcy you can "assume" (keep) or "reject" (walk away from) such contracts, with court approval — leases, equipment leases, software subscriptions, franchise and supply agreements.

Form 425C requires six labeled attachments. A = written explanation for any "No" on lines 1–9. B = explanation for any "Yes" on lines 10–18. C = itemized cash receipts (line 20). D = itemized disbursements (line 21). E = unpaid post-petition debts (line 24). F = money owed to you (line 25). None can be replaced by bank statements.

A legal requirement for confirming a plan: the court must find it's not likely to be followed by liquidation or further reorganization. In plain terms — the judge must believe your business can actually make the plan payments and survive.

Federal Unemployment Tax Act tax, paid by employers (not employees) on the first $7,000 of each employee's wages per year, filed annually on IRS Form 940. Post-petition FUTA must be paid on time during your case.

An accounting and legal concept meaning a business is expected to keep operating for the foreseeable future — not being wound down. Maintaining going-concern status is critical: a business worth more as an ongoing operation is generally worth more than its liquidation value.

A legal standard requiring honest, sincere dealing. Your plan must be proposed in good faith, and you must operate the business in good faith during the case. Courts can dismiss cases or deny confirmation if the debtor hasn't acted in good faith.

A creditor whose claim is being changed under the plan — receiving less than owed, on different terms, or with different interest. Impaired creditors get to vote on the plan; unimpaired creditors (paid in full on time) do not.

A person or company with a close relationship to the debtor — the owner, family members, officers and directors, or businesses they control. Transactions with insiders in the year or two before filing get special scrutiny and may be avoidable (unwound) by the trustee.

A legal right against a specific piece of property securing a debt. If the debt isn't paid, the lienholder can take or sell the property. Mortgages (on real estate) and security interests (on equipment, vehicles, inventory, receivables) are common.

Selling off all business assets to pay creditors, then closing the business. Chapter 7 is a liquidation. One test for confirming a Sub-V plan is that each creditor must receive at least as much as they would in a Chapter 7 liquidation.

The estimated value of your assets if sold quickly in a forced sale — typically much less than fair market value. Your plan must ensure creditors receive at least liquidation value.

The financial report you file with the court every month during your Sub-V case, covering the prior calendar month. Small business and Sub-V debtors use Official Form 425C, organized into 8 parts. Due by the 21st of the following month.

Transactions that are typical and routine for your type of business. You can generally make ordinary-course decisions without court approval; unusual or major decisions (selling major assets, large contracts, paying old debts) require it.

The federal government's online system for accessing bankruptcy court records. Through PACER you can view your docket, download filed documents, and track your case. Your attorney files through the related CM/ECF system. PACER charges a small per-page fee.

The central Sub-V document describing how your business will restructure debts and pay creditors over time. In Sub-V only the debtor can file a plan, and it must be filed within 90 days of the petition date. It typically covers 3–5 years.

Everything from your petition date forward. Post-petition income, expenses, debts, and assets are distinct from pre-petition ones. The MOR tracks only post-petition activity, and post-petition bills must be paid on time.

Everything that existed or occurred before your petition date. Pre-petition debts are what the case is designed to address through the plan. You generally cannot pay pre-petition debts without court approval.

The individual who owns, controls, and runs the business that filed. On court documents and MOR signatures, "the principal" usually means you — the owner making decisions, signing documents, and taking responsibility for the case.

Creditors entitled to be paid before ordinary unsecured creditors, in a legal order set by the Code, and generally paid in full under any plan — employees owed wages (up to a cap), the IRS and state tax authorities for certain taxes, and case administrative expenses.

A required part of every MOR (Form 425C, Part 7). Each month you compare what you projected last month to actuals, and forecast next month's receipts, disbursements, and net cash flow. Easy to confuse with Projected Disposable Income, which is a separate, longer-range concept.

The income projected to be left after all ordinary and necessary operating expenses, which must be committed to creditors under the plan over 3–5 years. This longer-range projection supports your Plan of Reorganization and is distinct from the monthly Projection (MOR).

The official document a creditor files to assert it's owed money by the debtor. Creditors must file by the court's bar date; claims not filed may be disallowed. The debtor can object to claims it believes are incorrect.

All cash, checks, and electronic payments deposited into your DIP accounts during the period. The MOR requires you to list and total all receipts by type — customer payments, owner contributions, loan proceeds, tax refunds, other.

Restructuring a business's debts, operations, and obligations under court supervision so it can survive and pay creditors over time. Reorganization bankruptcies (Chapter 11, including Sub-V) let the business keep operating — the opposite of liquidation.

A creditor holding a lien on specific property. If the debtor defaults, it can take or sell that collateral. Secured creditors generally must be paid the value of their collateral through the plan, or they retain their lien.

The legal term for a business that qualifies to file under Subchapter V based on its total debt. Congress set the debt ceiling in the SBRA (2019) and has adjusted it since — confirm the current limit with your attorney at the time of filing.

The 2019 federal law that created Subchapter V of Chapter 11. It added a streamlined, less expensive option for small businesses by eliminating the creditors' committee, removing the Disclosure Statement requirement, and letting the debtor alone propose a plan.

A document filed at the start of a case (not monthly) disclosing detailed financial history — income for the prior 2 years, payments in the 90 days before filing, insider transactions, lawsuits, bank accounts, and more.

A statement of revenue, expenses, and profit or loss over a period. The MOR uses one for the current month plus cumulative totals from the petition date. QuickBooks generates it as the "Profit and Loss" report.

A streamlined, faster, less expensive form of Chapter 11 for qualifying small businesses below a debt threshold. Advantages: no creditors' committee, no Disclosure Statement, only the debtor can file a plan, the trustee facilitates rather than controls, and confirmation is simpler.

A professional appointed to your case shortly after filing. Unlike a Chapter 7 trustee, the Sub-V trustee facilitates a consensual plan — reviewing your MORs monthly, attending hearings, participating in plan negotiations, and reporting on compliance. Neutral; fees paid by the estate.

"Trustee" means different people in different contexts: (1) the U.S. Trustee, a government official overseeing all cases; (2) a Subchapter V Trustee appointed to facilitate your plan; (3) a Chapter 7 trustee who takes control of assets in liquidation. In your Sub-V case, "trustee" almost always means your appointed Sub-V trustee.

A federal official within the DOJ who serves as watchdog of the bankruptcy system — appoints Sub-V trustees, reviews MORs for compliance, attends hearings, and can move to dismiss non-complying cases. Don't confuse the U.S. Trustee (government) with your assigned Sub-V trustee (private individual).

A creditor with no lien on any specific property — credit card companies, trade vendors, personal loans, most professional-services creditors. Unsecured creditors are paid last and often receive only a fraction of what they're owed.

A case filed by the debtor themselves (as opposed to an involuntary petition filed by creditors). Almost all Sub-V cases are voluntary, filed on Official Form 201 (non-individuals) or Form 101 (individuals). Filing begins the case and triggers the automatic stay.

The difference between current assets (cash, receivables, inventory) and current liabilities (bills due within a year). Positive working capital means enough short-term resources to pay short-term bills; negative is a sign of stress trustees watch closely.