Chapter 11 Subchapter V Debt Limit: 2024 Update
The debt limit for Chapter 11 Subchapter V has undergone several changes. Initially set at $2,725,625 when the Small Business Reorganization Act (SBRA) was enacted in 2019, it was increased to $7.5 million as part of the CARES Act in 2020 to address the financial challenges caused by the COVID-19 pandemic. This higher limit was extended twice but expired on June 21, 2024.
As of June 21, 2024, the debt limit for Subchapter V cases reverted to the original limit, adjusted for inflation, which is $3,024,725. 23This means that businesses with total debts exceeding $3,024,725 are no longer eligible for Subchapter V relief unless further legislative action is taken to extend or permanently increase the debt limit.