Small businesses in Fort Worth with debts up to $7.5 million could soon qualify for Subchapter V, a streamlined and less expensive form of Chapter 11 reorganization, under legislation awaiting President Trump's signature. The bill, reported by The Dallas Morning News, would restore higher debt limits that expired in June 2024 and make them permanent. For owners currently shut out of Subchapter V because their debts exceed roughly $3.4 million, the change could open the door to a more affordable restructuring option.
Leinart Law Firm, which has offices in Fort Worth and Dallas, advises business owners to review their situations now rather than wait. The firm notes that a bankruptcy lawyer can determine whether a business qualifies today and how the pending change affects filing timing. The bill would apply only to cases filed on or after enactment, so the decision to wait or file immediately carries significant consequences.
Under the proposed law, the Subchapter V debt ceiling would rise from $3,424,000 to $7,500,000. This would allow more small businesses to propose a repayment plan while continuing to operate, without the expense of a full Chapter 11 case. Separately, Chapter 13 eligibility would be simplified: the current caps of $526,700 for unsecured debt and $1,580,125 for secured debt would be replaced by a single $2,750,000 limit. That change may particularly help sole proprietors whose business debts are in their own names. Chapter 13 offers a structured repayment plan for individuals with regular income.
"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 businesses with debts between the current and proposed limits, waiting for the President's signature could make Subchapter V available. However, delay carries risks. Creditor lawsuits, bank garnishments, and scheduled withdrawals under merchant cash advance agreements can drain the cash a reorganization depends on. Owners who prefer to close the business may instead use Chapter 7, where a trustee liquidates company assets.
Nationwide, Subchapter V elections reached 302 in August, a 63 percent increase over August 2025, even under the lower debt limit, according to Epiq AACER data. The Northern District of Texas, which hears Fort Worth cases, ranks among the busiest bankruptcy courts in the country. If the bill becomes law, that volume could rise further as more small businesses gain access to Subchapter V. Owners can schedule a consultation online to evaluate their options.
