Catenaa, Tuesday, December 02, 2025- Over 2,200 people and small firms in US have filed for bankruptcy this year under the so-called Subchapter V rules, which make it cheaper and faster to win relief from creditors.
“Creditors are just breathing down their necks,” said Carol Fox, a court-approved trustee who oversees more than two dozen cases filed in Southern Florida.
According to data provider Epiq Bankruptcy Analytics, the number of Subchapter V cases rose faster than the overall rate for Chapter 11 bankruptcies, which businesses and wealthy individuals typically use to restructure their debts.
Year to date through November, Subchapter V cases increased more than 8% to 2,221, compared to the same period last year, Epiq data show.
At the same time, Chapter 11 petitions are up about 1% to a little more than 6,000. Epiq collects information from the federal courts on the various types of bankruptcies filed every day in the US.
The Subchapter V program, introduced in 2020, enables individuals and small businesses with debt of less than $7.5 million to avoid the costs and delays associated with the traditional court reorganization process.
The debt limit was reduced last year to about $3 million, making it harder for bigger businesses to qualify, but instead of slowing the growth of the program, the number of filings has increased.
The process is mostly used by small companies, Fox said. But most individuals she works with have filed Subchapter V with business debts as well as consumer debts, she said.
Consumer bankruptcy cases, typically filed under the Chapter 13 rules, are also up compared to recent years when an unusually low number of individuals sought protection from creditors.
So far, more than 180,000 Chapter 13 cases have been filed, or nearly 5% more than the first 11 months of last year.
