What it Means for North Florida Business Owners
Florida ranks second in the nation by total business bankruptcy filings. Here is what is driving the increase and what small business owners should know.
The Numbers Tell a Clear Story
Florida is in the middle of a significant rise in business bankruptcy filings, and the numbers are hard to ignore. According to a March 2026 analysis by The Kaplan Group using federal judiciary data, Florida recorded 2,372 business bankruptcy filings in 2025, a 30.5% increase over 2019 and an 86.6% increase from the 2022 trough. Only Texas recorded more business filings. Nationally, business bankruptcy filings reached 24,737 for the 12 months ending December 31, 2025, up 8.6% from 2019.
The trend continued into 2026. Epiq AACER reported that commercial Chapter 11 filings increased 67% in February 2026 compared with February 2025, rising from 487 to 814 filings. Subchapter V elections increased 91% over the same period, from 164 to 314. Epiq cautioned that the February Chapter 11 total included many related filings tied to several large commercial cases, so monthly percentages should be viewed in context rather than as a stand-alone measure of distress.
These are not abstract statistics. They represent restaurants, medical practices, construction companies, logistics businesses, franchises, professional services firms, and other employers across Florida. For business owners in North Florida from Jacksonville and Gainesville to Tallahassee, Pensacola, and Panama City the broader rise in financial distress is worth paying attention to before a short-term problem becomes a crisis.
What is Driving the Surge?
There is no single cause behind the increase in business bankruptcy filings. Instead, several economic pressures have converged, and the combination can be especially difficult for businesses operating on narrow margins or carrying substantial debt.
Pandemic-era debt and post-pandemic obligations
During the pandemic, many small businesses relied on SBA programs, Economic Injury Disaster Loans (EIDLs), Paycheck Protection Program (PPP) loans, landlord accommodations, lender forbearance, and other emergency measures. Some businesses also used merchant cash advances (MCAs) or other high-cost financing to bridge revenue gaps. As temporary relief ended and repayment obligations resumed, some companies were left with debt loads that no longer matched their cash flow.
Rising operating costs
Florida businesses have faced higher costs for insurance, rent, labor, utilities, goods, materials, and other operating expenses. In industries such as hospitality, construction, retail, and food service, relatively small changes in margins can have a major effect on liquidity.
Higher borrowing costs and tighter credit
Elevated borrowing costs can affect variable-rate loans, refinancing, equipment financing, and lines of credit. At the same time, tighter underwriting can make it harder for a distressed company to refinance its way out of a cash-flow problem.
Restaurant and franchise distress
Restaurant and franchise operators have been particularly visible in 2026 bankruptcy headlines. Major franchisees associated with Popeyes and Applebee’s, including operators with Florida locations, have sought Chapter 11 protection, while other franchise operators have filed bankruptcy in different jurisdictions. The causes vary by company, but commonly reported pressures include inflation, declining or shifting customer traffic, labor costs, lease obligations, debt service, and operational challenges. These cases are useful reminders that even multi-unit businesses can face restructuring pressures when fixed costs and leverage outrun cash flow.
What this Means for North Florida
North Florida’s economy is diverse, but it is not insulated from these statewide and national pressures. Jacksonville has a large logistics, healthcare, financial-services, construction, and professional-services base. Gainesville has a university-centered economy with its own seasonal and small-business dynamics. Tallahassee combines government, education, healthcare, construction, and professional services. Pensacola, Panama City, and surrounding Panhandle communities also contend with tourism cycles, insurance costs, construction pressures, and the financial effects that major storms can leave behind.
The U.S. Bankruptcy Court for the Middle District of Florida, which includes Jacksonville, describes itself as the third-busiest bankruptcy court among the nation’s 90 federal districts. The Northern District of Florida serves Tallahassee, Gainesville, Pensacola, Panama City, and surrounding counties through four divisions. Those local courts provide the forum for businesses and individuals who qualify to seek bankruptcy relief in North Florida.
Why More Businesses Are Looking at Chapter 11 and Subchapter V
The broader data also shows strong Chapter 11 activity. The Kaplan Group’s analysis reports that national business Chapter 11 filings increased from 6,052 in 2019 to 11,730 in 2025. Chapter 11 is designed to allow a business to reorganize while continuing operations, although some Chapter 11 cases ultimately result in sales, liquidations, or other outcomes rather than a traditional stand-alone reorganization.
Subchapter V, created by the Small Business Reorganization Act, is a streamlined form of Chapter 11 for eligible small business debtors. As of August 2026, the adjusted debt limit for Subchapter V eligibility is $3,424,000 in aggregate noncontingent, liquidated secured and unsecured debts, subject to the other statutory eligibility requirements. Eligibility can be fact-specific, so the debt calculation should be reviewed carefully before a filing decision is made.
Subchapter V can reduce some of the expense and complexity of a traditional Chapter 11. A trustee is appointed to help facilitate the case and the development of a consensual plan. A creditors’ committee is generally not appointed unless the court orders one for cause. Subchapter V also modifies traditional Chapter 11 confirmation rules: in a nonconsensual plan, an owner may be able to retain an equity interest without satisfying the traditional absolute-priority rule, but the debtor must still meet the statutory confirmation requirements, including the applicable disposable-income or equivalent-value requirement for a three-to-five-year period.
The Stigma is Fading and that Can Be a Good Thing
For decades, bankruptcy carried a stigma that kept many business owners from exploring it early enough to preserve meaningful options. The reality is more practical. A business can have valuable operations, loyal customers, employees, equipment, contracts, intellectual property, and long-term potential while still having an unsustainable capital structure or a short-term liquidity crisis.
The U.S. Constitution gives Congress the power to establish uniform laws on bankruptcy. Modern bankruptcy law reflects a longstanding policy choice: in appropriate circumstances, debtors need an orderly process to address debts while creditors receive the protections and remedies provided by federal law. For a viable business, Chapter 11 can be a strategic restructuring tool not simply a synonym for shutting the doors.
What Should You Do If Your Business is Under Pressure?
If your business is experiencing serious financial pressure, timing matters. Options generally become more limited as cash is depleted, payroll or taxes fall behind, critical vendors stop extending terms, secured lenders declare defaults, leases are terminated, or lawsuits and collection actions accelerate.
Speaking with a bankruptcy attorney does not mean you have decided to file. It can help you understand whether a workout, negotiated restructuring, asset sale, Chapter 11, Subchapter V, Chapter 7, or another strategy is worth considering. Early analysis also gives the business time to address cash management, banking, payroll, taxes, collateral, leases, executory contracts, insider transactions, and other issues that can become important in a bankruptcy case.
Bankruptcy cases are filed in federal bankruptcy court, not Florida state court. Florida is divided into the Northern, Middle, and Southern federal judicial districts. Venue generally depends on where the debtor’s domicile, residence, principal place of business, or principal assets have been located during the relevant 180-day period. A North Florida business may therefore file in the Northern District or, for Jacksonville-area businesses, the Middle District, depending on the statutory venue rules and the facts of the business.
Chapter 7 generally involves liquidation: a trustee gathers and liquidates nonexempt estate assets and distributes proceeds according to bankruptcy law. Chapter 11 is primarily a reorganization chapter and may allow a business to continue operating while it restructures debt, sells assets, renegotiates obligations, or proposes a plan. The best fit depends on whether the business has a viable path forward and what assets, liabilities, contracts, and creditor issues are involved.
Subchapter V is a streamlined form of Chapter 11 for qualifying small business debtors. It was designed to make small-business reorganization faster and less expensive than a traditional Chapter 11 in many cases. A Subchapter V trustee is appointed, and the plan and confirmation process differs in important ways from a traditional Chapter 11.
As of August 2026, the adjusted debt limit is $3,424,000 in aggregate noncontingent, liquidated secured and unsecured debts, subject to exclusions and the other requirements in the Bankruptcy Code. The temporary $7.5 million limit expired in June 2024. Because whether a debt is contingent or liquidated can be a legal issue, businesses near the limit should obtain a case-specific eligibility analysis.
Potentially, yes. One important difference from traditional Chapter 11 is that Subchapter V removes the traditional absolute-priority rule for a nonconsensual plan. That can permit owners to retain their interests even when unsecured creditors are not paid in full, provided the plan satisfies the requirements of 11 U.S.C. § 1191 and the other applicable provisions of the Bankruptcy Code. Retention is not automatic, and the plan must still be confirmable.
Usually not. In a Subchapter V case, a creditors’ committee is not ordinarily appointed unless the court orders one for cause. This can reduce administrative expense compared with a traditional Chapter 11 case.
Often, yes. In Chapter 11, the debtor commonly remains in possession and continues operating as a debtor in possession, subject to the Bankruptcy Code, court orders, U.S. Trustee oversight, and any applicable cash-collateral or financing requirements. A Subchapter V trustee also participates in a Subchapter V case, but the debtor generally remains responsible for operating the business.
A bankruptcy filing generally triggers the automatic stay under 11 U.S.C. § 362, which stops many collection actions against the debtor and property of the bankruptcy estate. The stay has exceptions, and creditors can ask the court for relief from the stay in appropriate circumstances. The effect of the stay should be evaluated based on the particular debt, creditor, and proceeding involved.
Ideally, before a crisis. Early advice can preserve options and allow time for financial review, cash-flow forecasting, negotiations, and filing preparation. Waiting until payroll cannot be met, bank accounts are frozen, key contracts are terminated, or collateral is being repossessed can make a successful reorganization substantially more difficult.
No. A bankruptcy consultation is an opportunity to evaluate available strategies. In some cases, a negotiated workout or nonbankruptcy restructuring may be preferable. In others, Chapter 11 or Subchapter V may provide protections that cannot be achieved through an informal workout.
Resources for Florida Business Owners
• U.S. Courts — Chapter 11 Bankruptcy Basics — Overview of Chapter 11 and Subchapter V from the federal judiciary.
• U.S. Bankruptcy Court — Northern District of Florida — Court information for Tallahassee, Gainesville, Pensacola, Panama City, and surrounding counties.
• Northern District of Florida — Chapter 11 Reorganization — Local Chapter 11 information and filing resources.
• U.S. Bankruptcy Court — Middle District of Florida — Court information for Jacksonville and other Middle District divisions.
• U.S. Trustee Program — Information about U.S. Trustee oversight and the Subchapter V trustee program.
• U.S. Courts — Bankruptcy Forms — Official national bankruptcy forms.
• U.S. Courts — Bankruptcy Filing Statistics — Federal filing statistics and data tables.
• The Kaplan Group — 2025 Business Bankruptcy State Analysis — The state-level analysis cited in this article; its methodology relies on federal judiciary statistics.
• Epiq AACER — February 2026 Filing Report — Source for the February 2026 commercial Chapter 11 and Subchapter V filing figures cited above.
How Michael H. Moody Law, P.A Can Help
Michael H. Moody Law, P.A. represents large, small and mid-sized business owners across North Florida in Chapter 11 and Subchapter V cases. The firm’s practice covers Tallahassee, Jacksonville, Gainesville, Pensacola, Panama City, and surrounding areas. With experience at Greenberg Traurig and Berger Singerman and a focused practice built on personal attention and practical strategy, the firm helps business owners evaluate their options and, when a filing is the right path, navigate the restructuring process with a clear plan.
Disclaimer: This article is for general informational purposes only and is not legal advice. Bankruptcy eligibility, venue, strategy, and outcomes depend on the specific facts and applicable law. Reading this article does not create an attorney-client relationship.