COVID-19 Resources

$7.5 Million Debt Limitation for Small Business Debtors Extended

On Saturday, President Biden signed into law the COVID-19 Bankruptcy Relief Extension Act of 2021. This act extends the $7.5 million debt limitation under the Small Business Reorganization Act of 2019 (SBRA) for another year, until March 27, 2022.

Last year, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide emergency assistance for individuals and businesses affected by the COVID-19 pandemic. The CARES Act temporarily increased the debt limitation under the SBRA from $2,725,625 to $7.5 million. The SBRA, which took effect on February 19, 2020, created Subchapter V of the Bankruptcy Code to provide a more streamlined and cost-effective reorganization option for small businesses. The $7.5 million debt limitation increase under the CARES Act was set to expire on March 27, 2021.

The COVID-19 Bankruptcy Relief Extension Act of 2021 extends the bankruptcy relief provisions of the CARES Act, which most notably includes the $7.5 million debt limitation under the SBRA, until March 27, 2022. As a result, small businesses with debts between $2,725,625 and $7.5 million will continue to be eligible for Subchapter V for another year.

For further information regarding the COVID-19 Bankruptcy Relief Extension Act of 2021 or insolvency concerns relating to bankruptcy or receivership, please contact attorney Jessica K. Haskell.

Published by
Jessica Haskell

Recent Posts

IRS Invalidates Discounts Used in an FLP Formed Shortly Before Death

The recent Tax Court case Estate of Anne Milner Fields v. Commissioner underscores the risks…

4 days ago

Judge Blocks DOL Increase to Salary Thresholds for Exempt Workers

In April 2024, the Department of Labor announced a final rule, entitled Defining and Delimiting the…

4 days ago

What to Expect for Tax Policy in 2025 After Trump’s Election Victory

The recent election of Donald Trump as president signals potential changes to the U.S. tax…

1 week ago

Super Lawyers Recognizes 30 O’Neil Cannon Attorneys

Each year, Super Lawyers surveys the State of Wisconsin’s 15,000 attorneys and judges, seeking the State’s top…

1 week ago

O’Neil Cannon Ranked by Best Law Firms® in 2025

O’Neil Cannon has been recognized regionally in the 2025 edition of Best Law Firms®, ranked…

2 weeks ago

Steve Slawinski Published in State Bar’s Construction Blog

Construction lien waivers are an indispensable part of the traditional construction payment process, allowing parties…

2 weeks ago