Small businesses in Fort Worth with debts up to $7.5 million could soon qualify for Subchapter V, a streamlined form of Chapter 11 reorganization, under a bill awaiting President Trump's signature, according to The Dallas Morning News. The legislation would restore debt limits that expired in June 2024 and make them permanent, a change that could significantly alter how struggling small businesses manage their debts.
Leinart Law Firm advises Fort Worth business owners whose debts exceed the current limit of about $3.4 million to review their options now. Owners can ask a bankruptcy lawyer whether a business qualifies today and how the pending change affects the timing of a filing.
Subchapter V lets an owner keep running the business and propose a repayment plan without the expense of a full Chapter 11 case, but companies above the current limit cannot use it. The bill would raise the small business debt ceiling from $3,424,000 to $7,500,000, giving more companies access to a faster, less costly bankruptcy option. For sole proprietors whose business debts are in their own names, separate caps of $526,700 for unsecured debt and $1,580,125 for secured debt would become one $2,750,000 limit under Chapter 13. The new limits would apply only to cases filed on or after enactment.
For a business with debts between the two limits, waiting for the signature may make Subchapter V available, but delay has costs. Creditor lawsuits, bank garnishments, and scheduled withdrawals under merchant cash advance agreements can deplete the cash a reorganization depends on. Owners who would rather close the business may use a Chapter 7 case, in which a trustee liquidates company assets.
Subchapter V elections nationwide reached 302 in August, a 63 percent increase over August 2025, even under the lower limit, according to Epiq AACER data. The Northern District of Texas, which hears Fort Worth cases, ranks among the nation's busiest bankruptcy courts. The combination of rising filings and a higher debt ceiling could make Subchapter V a more viable option for a broader range of small businesses.
