Aug 21, 2025
eNews
Senate proposes raising the debt limit on Subchapter V filings to $7.5 million
The Senate introduced an amendment to raise the debt limit for Subchapter V bankruptcy filings from $3 million to $7.5 million. Subchapter V of Chapter 11 of the U.S. Bankruptcy Code offers small businesses an alternative to filing for a traditional bankruptcy that is more expedited and cost-efficient but shifts some of these burdens onto credit managers.
The debt limit was initially $2.7 million when Subchapter V was created under the Small Business Reorganization Act (SBRA) of 2019, but it was raised to $7.5 million in 2020 in response to the COVID-19 pandemic. The heightened de…