Chapter 11 vs Chapter 7 vs Subchapter V: Which One Did the Crypto Company File?
Chapter 11 is reorganization, Chapter 7 is liquidation, and Subchapter V is a streamlined small-business version of Chapter 11 — three different paths, with different aims and different signals. Knowing which one a crypto company filed tells you a great deal about what it is trying to do.
Chapter 7 — liquidation
In Chapter 7, a trustee takes control, sells the debtor’s assets, and distributes the proceeds to creditors according to priority. The entity does not survive; it is wound down. Chapter 7 is the “end of the road” chapter. If you read that a company filed Chapter 7, the working assumption is that the business is being liquidated rather than saved.
Chapter 11 — reorganization
Chapter 11 is generally aimed at keeping value alive. The debtor usually stays in control as a “debtor in possession” and tries to restructure its debts, sell assets, or sell the business as a going concern under court supervision. A Chapter 11 filing signals an attempt to reorganize or to sell in an orderly way — though a Chapter 11 case can later convert to Chapter 7 if reorganization fails.
Subchapter V — streamlined Chapter 11 for small businesses
Subchapter V is not a separate chapter of the Bankruptcy Code. It is a track within Chapter 11, created by the Small Business Reorganization Act of 2019 to make reorganization faster and less expensive for eligible smaller businesses. You can read the enacting legislation on Congress.gov.
Subchapter V differs from a standard Chapter 11 in ways that matter for reading a case:
- It is designed to be faster and cheaper. The process is streamlined, with fewer of the procedural burdens of a full Chapter 11.
- A trustee is appointed to help facilitate a reorganization plan, but the debtor generally remains in possession of its business.
- Eligibility is limited by debt thresholds and business criteria, so a Subchapter V filing signals a smaller entity, not a large one.
So when a company files “Chapter 11, Subchapter V,” it is telling you two things at once: it intends to reorganize rather than liquidate, and it is an eligible small business using the streamlined track.
Why the distinction matters for crypto readers
Headlines often say only “bankruptcy.” The chapter tells you the intent. A Subchapter V reorganization by one operating entity is a very different event from a large exchange’s Chapter 11 or a lender’s collapse — and, importantly, none of these tells you anything about a separate company, token, or network that did not file. For a concrete Subchapter V example, see the MVMT Labs Chapter 11 filing, explained. For the underlying mechanics, what happens when a crypto company files Chapter 11.
Frequently asked questions
Is Subchapter V the same as Chapter 11? It is a streamlined track within Chapter 11 for eligible small businesses, created by the Small Business Reorganization Act of 2019. It is still a Chapter 11 reorganization.
What is the difference between Chapter 7 and Chapter 11? Chapter 7 liquidates the debtor and winds it down. Chapter 11 generally aims to reorganize or sell the business as a going concern.
What does a Subchapter V filing signal about a company’s size? Subchapter V has debt and eligibility limits, so a Subchapter V filing indicates an eligible smaller business rather than a large enterprise.
Does the chapter tell me what happens to a related token or network? No. The chapter describes what the filing entity is trying to do. A token or network run by parties that did not file is a separate question.
By Jordan Feld. Last reviewed 2026-07-22. General information about the bankruptcy process, not legal or financial advice.