Key Provisions in the Federal CARES Act
A key provisions in the federal CARES Act expires on March 28, 2022. Specifically, the maximum amount of debt a debtor can owe, and still be eligible to file bankruptcy in Subchapter V of Chapter 11, will decrease from $7.5 million, back to the original maximum debt amount of $2,725,625.
It is uncertain whether Congress will extend this provision before it expires.
The opportunity for a person or entity to file Subchapter V Chapter 11 (the simpler, faster, cheaper, more favorable for debtors kind of Chapter 11 bankruptcy case), where the debtor owes up to 7.5 million dollars of debt, will end on March 28, 2022, unless Congress extends the 7.5 million amount, which is uncertain.
Persons and entities owing more than $2,725,625 of debt, but not over $7.5 million dollars of debt, which wish to file Subchapter V bankruptcy, should do so before March 28, 2022.