For businesses who are struggling with their total debt levels but that are still earning enough money to keep the doors open, filing for Chapter 11 bankruptcy could be a good choice. This form of bankruptcy lets you enter into a repayment plan with your creditors to help you repay what you owe without having to liquidate your business. If you’re just now exploring your options, you’re likely wondering what the debt limit is for Chapter 11. Here’s what your Wisconsin business bankruptcy attorney wants you to know before your first consultation.
There Is No Debt Limit for Standard Chapter 11 Bankruptcy
The good news is that there’s no debt limit or maximum amount of debt that you can claim when filing for Chapter 11 bankruptcy. There’s also no minimum amount of debt you can claim or income limit associated with this filing. This means most businesses will be eligible to file for Chapter 11 bankruptcy, whether they’re $100,000 in debt or $4 million. However, this only applies to traditional Chapter 11 bankruptcy filings.
There Is a Limit for Subchapter V Filings
Subchapter V of Chapter 11 bankruptcy, the streamlined version of bankruptcy designed for small business owners, does have a debt limit in place. For 2025, that limit is $3,024,725. This amount marks a significant decrease that took place in June 2024. If your total debt is $3,024,725 or less, you’ll likely be eligible to file for Subchapter V bankruptcy. But if you have higher debt amounts, you’ll need to file for traditional Chapter 11 bankruptcy.
When to Choose Chapter 11 Bankruptcy
Chapter 11 bankruptcy is a good option for businesses who are confident in their ability to repay their debt and continue running their operations for years to come. The goal of this form of bankruptcy is to help you get out of debt by making payments to your creditors at a court-designated rate and schedule while still focusing on growing your business.
When to Choose Subchapter V Bankruptcy
Like Chapter 11, Subchapter V lets you enter into a repayment plan with your creditors but it does so with small business owners in mind. If your total debts are below the debt limit and you’re looking for a more affordable and less time-consuming form of Chapter 11 bankruptcy, filing for Subchapter V may be a better choice. Your Wisconsin business bankruptcy attorney will be able to help you understand your options.
You’ll Want a Wisconsin Business Bankruptcy Attorney by Your Side
Whether you’re considering filing for Chapter 11 or want to take the streamlined approach with Subchapter V, it’s important to work with an experienced business bankruptcy attorney from the very beginning. They’ll be able to review your finances and help you decide on the best form of bankruptcy for your financial situation. They can also give you advice and guide you through the filing process, taking much of the stress out of dealing with the bankruptcy court.
As you start looking for an attorney, pay attention to the following:
- The attorney’s experience helping businesses like yours.
- The types of bankruptcy they specialize in.
- The convenience of the location of their law firm.
- Your comfort level when speaking to them and their support team.
Choose an attorney you feel you can trust and who has experience helping businesses like yours navigate the bankruptcy process.
Schedule a Consultation Today
If you’re looking for a trustworthy and experienced Wisconsin business bankruptcy attorney, don’t wait. Contact Kerkman & Dunn to schedule a free consultation. Our team will review your case and help you figure out the best path forward.
