Small businesses in Fort Worth with up to $7.5 million in debt could soon qualify for Subchapter V, a streamlined form of Chapter 11 bankruptcy reorganization, under a bill awaiting President Trump's signature, according to The Dallas Morning News. The legislation would restore debt limits that expired in June 2024 and make them permanent, significantly expanding eligibility for a process designed to help small businesses reorganize without the expense of a full Chapter 11 case.
Currently, Subchapter V is available only to businesses with debts below approximately $3.4 million. The bill would raise that ceiling to $7.5 million. It would also simplify Chapter 13 eligibility for sole proprietors by replacing separate caps of $526,700 for unsecured debt and $1,580,125 for secured debt with a single $2,750,000 limit. The new thresholds would apply only to cases filed on or after the bill's enactment.
Leinart Law Firm, a Fort Worth-based bankruptcy practice, advises business owners whose debts exceed the current limit to review their options now. "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 bill's signature could make Subchapter V available, but delay carries risks. Creditor lawsuits, bank garnishments, and scheduled withdrawals under merchant cash advance agreements can deplete the cash a reorganization depends on. Owners who would rather close the business may use a Chapter 7 case, in which a trustee liquidates company assets.
The change comes as small business bankruptcy filings are already rising. 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. The Northern District of Texas, which hears Fort Worth cases, ranks among the nation's busiest bankruptcy courts.
If signed into law, the bill could provide a lifeline for more small businesses in Fort Worth and across the country, allowing them to restructure debts while continuing operations. Owners with debts above the current threshold should consult a bankruptcy lawyer to determine whether they qualify today and how the pending change affects the timing of a filing.
