Subchapter V Eligibility: 2025 Debt Limits, Business Use Tests & Trends
- Melissa A. Youngman
- Oct 25
- 3 min read
By Winter Park Estate Plans & ReOrgs Admin
Business Bankruptcy Attorneys - Winter Park, Florida
If your Florida business is struggling with debt but you’re not ready to close your doors, Subchapter V of Chapter 11 can help restructure debt while keeping the doors open. Subchapter V is a type of Chapter 11 case that was created to make reorganization faster and less expensive for small to medium size business owners. But before filing, it’s essential to understand whether your business qualifies.
The 2025 Debt Limit
As of April 2025, the Subchapter V eligibility limit is $3,424,000 in total debts, including both secured and unsecured obligations.
Additional qualification factors include:
At least 50% of the total debt of the business must come from business or commercial activity.
The debts must be incurred primarily for business use, not personal expenses.
The business must be engaged in commercial activity at the time of filing.
If the total debts of your business exceed $3,424,000, you may need to consider a traditional Chapter 11 case or other restructuring options. Our experienced Chapter 11 bankruptcy attorney, Melissa Youngman, can help you evaluate the best path forward, including which chapter may be right for your case.
The “Business Use” Test
Courts focus on whether the debts of you business were used for business purposes. Debts that generally qualify include:
Business loans, leases, or vendor accounts
Credit lines used for payroll, equipment, or operations
Debts used for personal living expenses typically do not qualify. This test often becomes a deciding factor for sole proprietors and small LLCs whose finances overlap.
Current Trends in Florida Subchapter V Cases
1. More Small Businesses Filing.With high interest rates and tight credit, more Florida companies are turning to Subchapter V for structured business reorganization.
2. Faster Resolutions.Subchapter V requires a plan to be filed within 90 days. That means cases move faster than traditional Chapter 11 filings, reducing costs and legal fees for the business while also obtaining quicker resolutions to creditor disputes.
3. Trustees as Facilitators.Subchapter V trustees are appointed to act in a role that is similar to that of mediators, helping businesses and creditors find common ground to achieve a consensual reorganization plan instead of adding conflict and litigation.
4. Increased Judicial Experience. Florida bankruptcy courts are now very familiar with Subchapter V cases, having one of the largest Subchapter V dockets in the country, which enables the Courts to streamline hearings and reduce delays.
Why This Matters for Florida Business Owners
If your company’s total debts fall below the Subchapter V debt limits, Subchapter V can help you keep control of your business while restructuring debt and negotiating with creditors.
For business owners in Orlando, Winter Park, and across Central Florida, this option can mean the difference between closing shop and turning things around through the more structured and streamlined process of a Subchapter V, Chapter 11 business reorganization.
At Winter Park Estate Plans & ReOrgs, we help business owners evaluate Subchapter V eligibility, analyze debts to ensure the business qualifies under the current debt limits, and prepare reorganization plans that work.
The Bottom Line
If your business owes less than $3,424,000 and is still operating, your business may qualify for Subchapter V protection. It’s faster, more affordable, and designed to keep you in control.
Don’t wait until creditors start dictating your next move — talk to an experienced business bankruptcy attorney to see if Subchapter V is right for you.
📥 Download Our Free Chapter 11 Readiness Checklist
Find out if you qualify for Subchapter V and what to gather before you file. Download the Checklist (PDF) here.
To schedule a free phone/online consultation with our experienced Chapter 11 Bankruptcy Attorney, Melissa Youngman, call (407) 765-3427 or use the book now button below.