A bill awaiting President Trump's signature would expand access to Subchapter V, a streamlined form of Chapter 11 reorganization, for small businesses with up to $7.5 million in debt, according to The Dallas Morning News. The measure would restore debt limits that expired in June 2024 and make them permanent, a change that could affect how Fort Worth business owners approach debt restructuring.
Under the bill, the Subchapter V debt ceiling would rise from $3,424,000 to $7,500,000. That increase would allow more companies to use a faster, less costly business bankruptcy option. Separately, Chapter 13 caps of $526,700 for unsecured debt and $1,580,125 for secured debt would be combined into a single $2,750,000 limit, which may help sole proprietors whose business debts are in their own names. The new limits would apply only to cases filed on or after enactment, meaning timing could be critical for owners weighing a filing.
Leinart Law Firm advises Fort Worth business owners whose debts exceed the current limit 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," said Marcus Leinart, founder of Leinart Law Firm. "We review the full debt picture with an owner, including personal guarantees, before recommending a chapter or a filing date."
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.
The implications extend beyond individual cases. 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. If the bill becomes law, that volume could rise further as more small businesses become eligible for Subchapter V, potentially easing court congestion in traditional Chapter 11 cases and giving owners a more affordable path to restructure rather than liquidate.
The change also matters because it would make the higher limits permanent, ending a cycle of temporary extensions that left business owners uncertain about eligibility. For Fort Worth companies carrying debt just above the old threshold, the difference between filing now and waiting could determine whether they can reorganize under Subchapter V or face a more expensive Chapter 11 process. That uncertainty is why legal advisors recommend a case-by-case review of debt structures, personal guarantees, and creditor pressure before deciding on a filing date.
