Authored by Naveen Athrappully via The Epoch Times,
Small business Chapter 11 bankruptcy filings jumped 50 percent in the first half of 2026 from the same period last year, signaling pressure on business owners.
Chapter 11 is a type of bankruptcy filing that reorganizes a company’s debt to keep it afloat and allow the entity to become solvent. Subchapter V of Chapter 11 relates to small business filings. In the first half of this year, a total of 1,663 Subchapter V bankruptcy filings were made, up from 1,107 filings in the first half of 2025, the American Bankruptcy Institute (ABI) said in a July 8 statement.
Overall commercial Chapter 11 bankruptcy filings also increased, with 4,589 filings in the first half, up by 28 percent annually.
“The increase in bankruptcy filings over the past year, particularly among small businesses, reflects ongoing financial pressures facing households and employers,” ABI Executive Director Amy Quackenboss said in a statement.
“Higher borrowing costs, increasing expenses, and geopolitical volatility are leading more debtors to turn to the bankruptcy system to restructure obligations and pursue a financial fresh start.”
Optimistic sentiment among small businesses has dipped. In a June 9 statement, the National Federation of Independent Business (NFIB) said that its Small Business Optimism Index declined in May. The index is based on surveys of NFIB members.
Eighteen percent of respondents cited inf
