Small businesses in Fort Worth with debts up to $7.5 million could soon qualify for Subchapter V, a streamlined form of Chapter 11 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 widening the pool of companies eligible for a faster, less expensive path to restructuring.
Leinart Law Firm, a Fort Worth-based bankruptcy practice, is advising business owners whose debts exceed the current Subchapter V limit of about $3.4 million to review their options now. Owners can ask a bankruptcy lawyer whether their business qualifies today and how the pending change might affect the timing of a filing.
The bill would raise the Subchapter V small business debt ceiling from $3,424,000 to $7,500,000. It would also combine Chapter 13's separate caps of $526,700 for unsecured debt and $1,580,125 for secured debt into a single $2,750,000 limit, a change that could help sole proprietors whose business debts are in their own names. The new limits would apply only to cases filed on or after the date of enactment.
"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 a business with debts between the two limits, waiting for the signature may 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 timing question is especially pressing in North Texas. 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 the bill becomes law, local attorneys expect a wave of filings from businesses that previously fell just above the eligibility threshold.
The implications extend beyond individual companies. Subchapter V is designed to keep owners in control and preserve jobs, rather than forcing a sale or liquidation. By making the higher limits permanent, the bill would give small businesses a stable planning horizon instead of the temporary patches that have lapsed in the past. For Fort Worth entrepreneurs carrying debt loads between $3.4 million and $7.5 million, the decision of whether to file now or wait could determine whether they reorganize or lose the business.
