On June 21, 2022, President Biden signed into law the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”), Pub. L. No. 117-151. (Stay with me here, it gets interesting.) Among other things, the Act increased the debt limits for cases filed under the Small Business Reorganization Act ("SBRA" or "Subchapter V") provisions of Chapter 11 from a maximum of $2,725,625 in total debts to $7,500,000.
These changes have worked out very well. Many businesses and individuals were able to file under the streamlined SBRA provisions, instead of having to go through a "regular" Chapter 11. But the Act didn't make these changes permanent. They expire on June 21, 2024, unless Congress passes new legislation to extend them or make them permanent before then.
So if you or your business have more than $2,725,625 in total debt, you'd better make sure that you file your SBRA case before June 21, 2024, or you're looking at a regular Chapter 11 instead. Which we do, but they're a lot more difficult and much more expensive.