A Subchapter V confirmation hearing is a bankruptcy court proceeding where a judge evaluates whether a Subchapter V debtor's plan meets the statutory requirements for confirmation under 11 U.S.C. § 1191(a). Judges at these hearings focus on feasibility, disposable income, and the debtor's ability to fund the plan from future earnings. This guide covers the most common questions about projected disposable income, valuation disputes, and plan duration so you can prepare your client's testimony and financial position for judicial scrutiny. Updated for 2026.
Judges Focus on Feasibility, Not Just Plan Terms
Subchapter V confirmation hearing questions are specific and consistent across jurisdictions — judges test feasibility, disposable income, and the debtor's ability to fund the plan from future earnings. This guide covers the most common questions about projected disposable income, valuation disputes, and plan duration so you can prepare your client's testimony and financial position for judicial scrutiny. Updated for 2026.
A plan that looks viable on paper often collapses when a judge presses on the underlying assumptions. Under 11 U.S.C. § 1191(a), the court shall confirm a plan if the debtor meets all requirements of § 1191(a), including that the plan complies with applicable provisions of Chapter 11. The feasibility requirement — that confirmation is not likely to be followed by liquidation or the need for further financial reorganization — is found in 11 U.S.C. § 1129(a)(11), which applies to Subchapter V via § 1191(a).1 This standard is identical to § 1129(a)(11) in standard Chapter 11, but Subchapter V's compressed timeline makes it harder to build a record.
Judges evaluate feasibility through the debtor's projected disposable income over the plan's duration. For individual debtors, § 1191(c) requires that all projected disposable income be applied to payments over a three-year period, or five years if the court approves for cause.2 The court examines whether revenue forecasts are realistic, expense projections are complete, and the debtor has accounted for seasonal fluctuations or known capital needs.
The confirmation hearing is the debtor's primary opportunity to establish credibility on these points. A debtor who cannot articulate how they arrived at their revenue projection — or who dismisses a judge's question about a cash shortfall — creates a record that supports denial. Attorneys who prepare clients to answer these questions directly, with supporting documentation, give the court a basis to confirm.
The 3-5 Questions That Appear in Every Subchapter V Confirmation Hearing
Based on published confirmation hearing orders and practitioner reports, judges consistently ask five questions across Subchapter V cases:
| Question | What the Judge Is Testing |
|---|---|
| How did you arrive at this revenue projection? | Whether the forecast is grounded in historical data or aspirational |
| What happens if revenue falls below projections by a typical margin? | Whether the plan has a margin of safety |
| Have you accounted for all operating expenses, including owner draws? | Whether disposable income is overstated |
| What is your plan for making payments if a major customer delays payment? | Whether the debtor has a liquidity buffer |
| How will you fund post-confirmation operations while making plan payments? | Whether the business can survive the payment schedule |
These questions appear in nearly every confirmation hearing because they test the structural integrity of the plan. A debtor who answers with specific numbers — "we have a $25,000 line of credit available if receivables stretch to 60 days" — demonstrates preparation. A debtor who answers vaguely — "we think we'll be fine" — invites the court to deny confirmation or order a modified plan.
How to Prepare Your Client for Testimony on Financial Projections
Preparation begins with the debtor's financial model. The attorney should walk through each line item with the client before the hearing, identifying which assumptions are conservative and which are optimistic. For example, if the debtor projects a 10% revenue increase in year two, the attorney should ask: what specific contracts or customer relationships support that number?
The debtor should be able to explain their revenue projection in two sentences. A typical response might be: "We have three recurring contracts worth $15,000 per month, and we expect to add two more at $5,000 each based on signed letters of intent." That level of specificity satisfies the court's need for a factual basis.
Attorneys should also prepare the debtor for cross-examination by the U.S. Trustee or a creditor's counsel. Common lines of attack include: (1) comparing projected expenses to historical averages, (2) questioning whether the debtor has included all mandatory payments like insurance or equipment leases, and (3) testing whether the debtor has accounted for owner compensation at market rates.
A debtor who testifies with confidence and specificity — supported by a spreadsheet the court can follow — significantly increases the likelihood of confirmation.
13-Week Cash Flow Projections: What Judges Scrutinize Most
The 13-week cash flow projection is the single most scrutinized financial document at a Subchapter V confirmation hearing. Judges use it to test whether the debtor can make plan payments while maintaining operations. Three line items draw the most attention:
| Line Item | What Judges Look For |
|---|---|
| Accounts receivable collections | Whether the collection cycle matches historical patterns |
| Accounts payable timing | Whether the debtor has negotiated extended terms with vendors |
| Owner draws and distributions | Whether the debtor has reduced discretionary spending |
A judge will compare the projection to the debtor's actual cash flow from the pre-petition period. If the projection shows faster collections than the debtor achieved historically, the court will ask for justification. If the debtor has not included a line for unexpected repairs or seasonal inventory purchases, the court will flag the omission.
The most effective approach is to build the projection from the debtor's actual bank statements and accounts receivable aging reports, then add a contingency buffer — for example, 10% — to account for unexpected shortfalls. This gives the court confidence that the debtor has stress-tested their own numbers. Attorneys should review the projection with the debtor line by line before the hearing, ensuring the client can explain each assumption.
Disposable Income Disputes: Where Judges Push Back on Plans
Disposable income disputes are the most common reason for confirmation denials in Subchapter V cases. For individual debtors, § 1191(c) requires that all projected disposable income be paid into the plan over three to five years.2 The definition of disposable income under § 1325(b)(2) applies to Chapter 13 cases. In Subchapter V, § 1191(d) incorporates the disposable income requirement by reference to § 1325(b)(2), but the calculation is adapted for business debtors — income received by the debtor, less amounts reasonably necessary for the maintenance or support of the debtor or a dependent of the debtor, and for business operations.
Judges push back when debtors claim expenses that appear inflated relative to pre-petition spending. A debtor who reported, for example, $8,000 per month in personal living expenses before filing cannot suddenly claim $12,000 is "reasonably necessary" without documentation.3 Similarly, business expenses that include luxury vehicle leases or above-market rent for owner-occupied property draw scrutiny.
The U.S. Trustee frequently objects when the debtor's projected disposable income is zero or near-zero despite positive cash flow. In these cases, the court will examine whether the debtor has understated income or overstated expenses. Attorneys should prepare a side-by-side comparison of pre-petition and post-petition expenses, with explanations for any increases.
For non-individual debtors, the disposable income analysis focuses on whether the business is retaining earnings that could fund higher plan payments. Judges look at distributions to owners, bonuses, and related-party transactions as potential sources of additional plan funding.
Common Confirmation Objections and How to Preempt Them
The U.S. Trustee and creditor counsel typically raise four objections at Subchapter V confirmation hearings:
| Objection | Preemptive Strategy |
|---|---|
| Feasibility — projections are unrealistic | Include a sensitivity analysis showing plan survives a 15% revenue decline |
| Disposable income — debtor is not contributing enough | Document all expenses with pre-petition averages and explain variances |
| Good faith — plan was filed to delay rather than pay | Show that plan payments exceed liquidation value and are timely |
| Classification — improper treatment of similar claims | Use the statutory classification structure under § 1122 and explain any deviations |
The most effective preemptive strategy is to address each objection in the plan and disclosure statement before the hearing. For example, if the debtor's plan pays unsecured creditors 20% over three years, include a liquidation analysis showing they would receive less than 5% in a Chapter 7. This directly addresses the good faith requirement under § 1129(a)(3).
Attorneys should also prepare the debtor to respond to objections during the hearing. A debtor who can explain why their plan is feasible — "we have already implemented the cost reductions shown in our projections" — turns a potential objection into confirmation evidence.
Post-Confirmation Compliance: What Gets Judges' Attention at the First MOR Review
The first Monthly Operating Report filed after confirmation signals whether the debtor will comply with the plan. Judges and the U.S. Trustee review the first post-confirmation MOR for three specific items: (1) whether the debtor made the first plan payment on time, (2) whether operating revenue matches the projections submitted at confirmation, and (3) whether the debtor has incurred any post-confirmation debt without court approval.
A debtor who misses the first plan payment or reports revenue significantly below projection — for example, 20% below — triggers immediate scrutiny. The court may schedule a status conference to determine whether the plan remains feasible. If the debtor cannot explain the shortfall or propose a cure, the court may convert the case to Chapter 7 or appoint a trustee.
Attorneys should advise clients to file the first post-confirmation MOR within the court's deadline — typically 15 days after month-end — and to include a brief narrative explaining any variances from projections. A proactive disclosure, such as "revenue was roughly 10% below projection due to a delayed customer payment that has since been received," maintains the court's confidence in the debtor's commitment to compliance.
Your Next Step
Review your next Subchapter V case's financial projections against the five questions listed above. If any assumption lacks documentary support — revenue growth without signed contracts, expenses without vendor quotes, or cash flow without a contingency buffer — schedule a prep session with the debtor before the confirmation hearing. For assistance with financial modeling or debtor testimony preparation, contact Chapter11 CFO at [email protected].