Small businesses in Fort Worth with debts up to $7.5 million may soon qualify for Subchapter V, a streamlined form of Chapter 11 reorganization that is faster and less expensive than a traditional Chapter 11 case. A bill awaiting President Trump's signature would restore debt limits that expired in June 2024 and make them permanent, according to The Dallas Morning News. The change matters because it would open Subchapter V to many more small businesses that currently exceed the roughly $3.4 million debt ceiling, giving them a better shot at surviving and repaying creditors while continuing to operate.
The bill would raise the Subchapter V small business debt ceiling from $3,424,000 to $7,500,000. It would also replace Chapter 13's separate caps of $526,700 for unsecured debt and $1,580,125 for secured debt with a single $2,750,000 limit, a change that could help sole proprietors whose business debts are in their own names. The new limits would apply only to cases filed on or after enactment, so timing is critical. Leinart Law Firm advises Fort Worth business owners whose debts exceed the current limit to review their options now, because waiting for the signature could make Subchapter V available but also allow creditor lawsuits, bank garnishments, and scheduled withdrawals under merchant cash advance agreements to deplete the cash a reorganization depends on.
"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." Owners can ask a bankruptcy lawyer whether a business qualifies today and how the pending change affects the timing of a filing. For those who would rather close the business, a Chapter 7 case remains an option in which a trustee liquidates company assets.
The implications extend beyond individual businesses. 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. That surge suggests rising financial distress among small companies, and the Northern District of Texas, which hears Fort Worth cases, already ranks among the nation's busiest bankruptcy courts. If the bill becomes law, more businesses could avoid liquidation, preserve jobs, and negotiate manageable repayment plans. However, the effective-date rule means owners must weigh the benefit of waiting for higher limits against the risk of creditor actions that can make reorganization impossible. For many Fort Worth small businesses, the decision may come down to whether they can afford to wait.
