Subchapter V Bankruptcy Filings Surge 46% as Small Businesses…

Event summary

Subchapter V elections within Chapter 11 filings rose 46% in the first nine months of 2026 compared to 2025, reaching 2,442 filings.
Total bankruptcy filings increased 11% year-over-year, with individual Chapter 7 filings up 13% and Chapter 13 filings up 8%.
Commercial Chapter 11 filings rose 11% year-over-year, reflecting persistent economic pressures on small businesses.
Congress passed the Bankruptcy Threshold Adjustment Act (H.R. 7730), permanently increasing Subchapter V debt eligibility to $7.5 million.

The big picture

The surge in Subchapter V filings underscores the financial strain on small businesses amid higher borrowing costs and inflation. The passage of H.R. 7730 expands access to bankruptcy relief, potentially altering the landscape for distressed small businesses. Epiq's data highlights the growing need for restructuring solutions as economic uncertainty persists.

What we're watching

Economic Pressure: How rising borrowing costs and inflation will continue to impact small business bankruptcy filings into 2027.
Regulatory Impact: Whether the permanent increase in Subchapter V debt eligibility will significantly alter small business restructuring strategies.
Market Dynamics: The pace at which commercial Chapter 11 filings rebound after a 16% decrease in September 2026.