ANALYSIS: Subchapter V Filings Steady Despite Debt-Limit Sunset

Subchapter V’s temporary debt-limit increase to $7.5 million expired through sunset provisions on March 27, 2022, but despite the lower debt limit, Subchapter V filings for the month of April were still relatively close to levels seen in recent months, suggesting an increase in small business distress.

The debt limit dropped back to $2,725,625 at the end of March, increasing to $3,024,725 April 1 due to an inflationary adjustment.

There were 101 Subchapter V filings in April, a drop of about 47% from March’s total of 192. The March surge in Subchapter V filings likely included debtors within the temporary ...