A Bloomberg article https://news.bloomberglaw.com/bankruptcy-law/senate-proposal-would-grow-small-business-bankruptcy-
eligibility is reporting that a new Senate proposal aims to increase the debt limits for Subchapter V bankruptcy eligibility for
small businesses. This proposal would restore the higher debt limit of $7.5 million for Subchapter V filings, up from the current
limit of about $3 million. The expansion would allow more businesses to take advantage of Subchapter V's benefits, which
include a more streamlined and cost-effective restructuring process compared to traditional Chapter 11 bankruptcies.
The potential revival of the higher debt limit comes after a significant drop in small business bankruptcy filings following the
expiration of the previous $7.5 million threshold.
Subchapter V, introduced in 2019, initially applied to businesses with less than $2.7 million in debt but was expanded to $7.5
million in 2020 as part of COVID-era business relief. This expansion was extended in 2022 but eventually expired, reverting
the eligibility requirement to about $3 million.
We are monitoring these developments and will continue to report on updates to Subchapter V.
We help individuals and businesses who have too much debt!
Jim Shenwick, Esq 917 363 3391 jshenwick@gmail.com
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We help individuals & businesses with too much debt!
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