On June 21, 2022, President Biden signed into law the “Bankruptcy Threshold Adjustment and Technical Corrections Act.” This is good news for small businesses seeking relief in sub-chapter V Chapter 11 cases and individuals seeking relief in chapter 13 cases.
For at least the next two years*, the debt limit for Sub Chapter V cases increases from $2.725 million to $7.5 million. The debt limit for chapter 13 rises to an aggregate of $2.75 million, regardless of whether the debt is secured or unsecured. It amends and substantially increases the previous separate debt ceilings that applied for secured ($1,395,875) and unsecured ($465,275) debt in chapter 13.
This increased debt limit expands the availability of these remedies to small businesses and individuals experiencing financial problems.
* Unless extended by further legislation, all provisions of the law will sunset two years from enactment, on June 21, 2024.