ANALYSIS: Expanded Subchapter V Access Rides Off Into the Sunset (1)

March 2022 was the busiest month for Chapter 11–Subchapter V bankruptcy filings in a year. At least 163 Subchapter V cases have been filed as of March 27, the highest total since March 2021 (approximately 220 filings).

Small business debtors rushing to file before the March 27 sunset of the temporary debt limit of $7.5 million likely contributed to this figure. Eligible debtors for Subchapter V generally must now have debts amounting to only $3,024,725 or less (as of April 1). There was a similar last–minute scramble to file in March 2021, the debt limit’s initial sunset date.

Subchapter V ...