The Need for Congress to Reinstate Subchapter V for Small Businesses

Friday, 2 August 2024, 19:45

Thousands of small businesses are at risk as Congress has not reinstated Subchapter V, resulting in a drastic drop in the debt ceiling from $7.5 million to just over $3 million. This change limits the ability of many small businesses to reorganize under Chapter 11. Daniel Gielchinsky of DGIM Law emphasizes the urgent need for legislative action to protect these businesses and ensure their survival. Without an increased debt cap, small businesses may face significant challenges during reorganization.
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The Need for Congress to Reinstate Subchapter V for Small Businesses

Urgent Legislative Action Required

Congress must act to reinstate Subchapter V, which has recently sunsetted due to the lowered debt threshold.

Impact on Small Businesses

Previously set at $7.5 million, the maximum debt limit has been reduced to just over $3 million. This change affects thousands of small businesses, limiting their options for reorganization under Chapter 11.

Call to Action

  • Thousands of businesses can no longer access proper debt restructuring.
  • Legal expert Daniel Gielchinsky emphasizes the need for a swift legislative response.
  • Failure to raise the debt limit may result in significant financial distress for many kinds of small businesses.

In conclusion, an increase in Chapter 11 debt cap is essential for the continued viability of numerous small businesses across the nation.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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