shape
shape
shape
shape
shape
shape
22 July 2025 / Geoffrey J. Peters

Subchapter V Debt Limits Under Review: What Bankruptcy Professionals Need to Know

Topics: Bankruptcy

The House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust recently held a hearing titled Bankruptcy Law: Overview and Legislative Reforms. The subcommittee invited six witnesses to discuss topics including chapter 11 subchapter V debt eligibility limits. The witnesses included two bankruptcy judges, three college professors, and one bankruptcy attorney.  

One of the main topics they focused on was the chapter 11 subchapter V debt limits. Congress enacted subchapter V of chapter 11 in the Bankruptcy Code on February 19, 2020 as part of the Small Business Reorganization Act of 2019 (SBRA). Subchapter V had an initial debt limit of $2,725,625. However, under the CARES Act, the debt limit temporarily increased to $7,500,000 until June 21, 2024. The debt limit is currently $3,024,725. Subchapter V allows small businesses to reorganize under the bankruptcy code. Subchapter V has debtor-friendly provisions including accelerated timelines for cases. It also enables a faster and less expensive restructuring process with fewer procedural hurdles and reduced administrative costs. 

All of the witnesses at the hearing were in favor of increasing the debt limits to $7,500,000. One witness testified that the subchapter V is the best change to the bankruptcy code we have seen in years. Based upon the testimony, it is expected that Congress will look to increasing the debt limits for subchapter V in the near future.
Our team is constantly monitoring this topic. If you have any questions or would like to learn more about Weltman’s bankruptcy recovery solutions, please connect with Shareholder Geoffrey Peters at any time.

This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

Related Publications

News / 29 August 2025

Robert (Bob) Weltman Elected to the Society of Benchers at Case Western Reserve University School of Law

Weltman, Weinberg & Reis Co., LPA, a full-service creditors' rights law firm with over 95 years of client service, is proud to announce that Senior Shareholder Robert (Bob) Weltman has been elected into the prestigious Society of Benchers at Case Western Reserve University School of Law.
Read More
News / 26 August 2025

Attorney Abigail Cody Now Licensed to Practice in Illinois

Weltman, Weinberg & Reis Co., LPA, a full-service creditors' rights law firm with over 95 years of client service, is thrilled to announce that Attorney Abigail Cody was recently admitted to practice in Illinois.
Read More
News / 26 August 2025

Weltman Welcomes Attorney Sara Jones to the Sarasota Office

Weltman, Weinberg & Reis Co., LPA, a full-service creditors' rights law firm with over 95 years of client service, is pleased to announce the addition of Attorney Sara Jones to the firm's Sarasota, FL office.
Read More

Join Our Email List

Get the latest articles and news delivered to your email inbox!
Subscribe

Contact Geoffrey

Geoffrey J. Peters

Shareholder
Contact

Join Our Email List