The current debt limits to qualify for relief under Chapter 11, Subchapter V ($7,500,000) and Chapter 13 ($2,750,000) sunset on June 21, 2024. The Bankruptcy Threshold Adjustment and Technical Corrections Act, enacted on June 21, 2022, extended increased debt eligibility for two years (increased debt eligibility was first enacted in 2020 under the CARES Act). Earlier this year, legislation to further extend the current debt thresholds was introduced in the United States Congress (S. 4150, “Bankruptcy Threshold Adjustment Extension Act”) but has not been enacted into law as the sunset date looms.
Absent action by Congress, the debt limits for Subchapter V and Chapter 13 cases will no longer be extended. The Subchapter V debt limit will drop to $3,024,725. The Chapter 13 threshold of $2,750,000 for both secured and unsecured debt will revert to a two-part test that limits eligibility to a maximum of $465,275 for unsecured debt and $1,395,875 for secured debt.
