Small Business Subchapter V Elections Increase 60 Percent In April Over the Same Period Last Year

Small Business Subchapter V Elections Increase 60 Percent In April Over the Same Period Last Year

Small Business Subchapter V Elections Increase 60 Percent In April Over the Same Period Last Year

Commercial Chapter 11s Up 40 Percent

May 3, 2024 – Small business filings, captured as subchapter V elections within chapter 11, increased 60 percent to 233 in April 2024 from 146 in April 2023, according to data provided by Epiq AACER, the leading provider of U.S. bankruptcy filing data. Commercial chapter 11 filings increased 40 percent in April 2024 to 542 from the 387 filings in April 2023. Overall commercial filings increased 39 percent in April 2024 to 2,569 from 1,846 in April 2023.

The 45,592 total U.S. bankruptcy filings in April 2024 increased 28 percent from the April 2023 total of 35,497. Noncommercial bankruptcy filings also registered a 28 percent increase, to 43,023 in April 2024 from the April 2023 noncommercial total of 33,651. The number of consumers filing for chapter 7 increased 33 percent to 26,778 in April 2024 from the 20,199 who filed in chapter 7 last year, while chapter 13 filings increased 21 percent to 16,172 in April 2024 from the 13,398 chapter 13 filings in April 2023.

“In April 2024, we continued to see very strong double-digit percentage year-over-year increases for both individual and commercial new filers for bankruptcy protection,” said Michael Hunter, vice president of Epiq AACER. “These increases reflect the increased cost and expense pressures both individuals and businesses are experiencing. Inflation has gradually increased in the first three months of 2024. The recent surge in insurance costs, including medical, auto, and home, and the high interest rate environment continues to place additional pressures on businesses and individuals. As tax season concludes, I would expect the velocity of filings to increase as we approach the summer months.”

“As interest rates remain at elevated levels and household debts continue to climb, access to the financial fresh start of bankruptcy is key for struggling businesses and consumers,” said ABI Executive Director Amy Quackenboss. “With enhanced eligibility for consumers and small business set to expire at the end of June, we appreciate recent legislative efforts by Congress to maintain greater access to a more efficient process for small businesses and families to restructure their debt loads.”

The debt eligibility limit of $7.5 million for small businesses looking to elect subchapter V reorganization under chapter 11 is due to sunset back to $2,725,625 in late June. ABI's Subchapter V Task Force on April 19 released its Final Report and recommendations to Congress, and its findings support maintaining the eligibility limit of $7.5 million in aggregate noncontingent, liquidated debt for small businesses looking to reorganize under subchapter V.

Sen. Richard Durbin (D-Ill.) and a group of bipartisan senators last month introduced S. 4150 to extend key provisions of the “Bankruptcy Threshold Adjustment and Technical Corrections Act” that are due to sunset on June 21 for an additional two years to 2026. The legislation would maintain the debt limit at $7.5 million for small businesses electing to file for bankruptcy under subchapter V of chapter 11. The bipartisan measure also maintains the debt limit for individual chapter 13 filings at $2.75 million and removes the distinction between secured and unsecured debt for that calculation.

April’s total bankruptcy filings represented a slight increase of 3 percent from March’s total of 44,465. Total noncommercial filings for April represented a 2 percent increase from the March 2024 noncommercial filing total of 42,010. The commercial filing total represented a 5 percent increase from the March 2024 commercial filing total of 2,455. Commercial chapter 11 filings decreased 11 percent from the 610 filings in March 2024. Subchapter V elections within chapter 11 increased 7 percent from 218 the previous month. Consumer chapter 7 filings saw an increase of 3 percent over the 26,115 chapter 7s filed in March 2024, while 13 filings increased 2 percent over the 15843 filings last month.

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About ABI

ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit For additional conference information, visit