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Small Business Chapter 11 Filings Increase 50% Year Over Year
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 inflation as the single most important business problem they face, the highest level since December 2024.
A net 36 percent of respondents in the survey raised their average selling prices, the highest since March 2023. A net 34 percent said they planned to raise prices.
The NFIB had called on Congress to advance small business priorities this year, according to a Jan. 6 statement from the organization.
Top priorities include lowering healthcare costs for small business owners, reducing fuel and electricity costs, passing regulatory reforms, minimizing labor mandates, and granting the right to repair cars, smartphones, and tractors.
“2025 was an eventful year for small businesses, highlighted by the permanent extension of the 20 percent Small Business Deduction, which stopped a massive tax hike on more than 33 million small business owners nationwide,” NFIB Senior Vice President for Advocacy Adam Temple said in a statement.
A tax relief provision that allowed small businesses to deduct up to 20 percent of their qualified business income was set to expire after 2025, but was made permanent under the One Big Beautiful Bill Act signed by President Donald Trump last year.
Congress should now “pass legislation that will allow the small business economy to flourish and make life more affordable for consumers,” Temple added.
Supporting Small BusinessesIn May, the Small Business Administration announced a new $50 million grant to support the Made in America manufacturing initiative.
The fund aims to ensure small domestic manufacturers receive the necessary technical assistance and training.
During March 30 remarks at a business conference, Treasury Secretary Scott Bessent said that the One Big Beautiful Bill Act led to a reduction in taxes for roughly 12 million small business owners by almost $7,000 on average.
President Donald Trump, joined by Republican lawmakers, signs the One Big Beautiful Bill Act into law during an Independence Day military family picnic on the South Lawn of the White House on July 4, 2025. Samuel Corum/Getty Images
“Across the country, households and businesses are already seeing the benefits of this legislation, with millions of Americans keeping more of what they earn and watching their paychecks go further,” Bessent said at the time.
The unemployment situation has also improved, with fewer Americans applying for unemployment benefits in the week ending July 4 than in the previous week. At 215,000 claims, the figure was also below economists’ expectations of 218,000 claims.
This was a reversal from a rising trend over the previous two months, which economists attribute to the trend of non-teaching staff from educational institutions applying for unemployment benefits during the summer holiday.
The U.S. Chamber of Commerce called for maintaining the U.S.-Mexico-Canada Agreement (USMCA) deal in a June 29 statement, citing benefits for American businesses.
The Chamber said that more than 13 million U.S. jobs in agriculture, manufacturing, energy, and service sectors are dependent on North American trade.
Streamlined trade facilitation measures and preferential treatment enabled by the USMCA allowed small businesses to compete in international markets, the Chamber said.
On July 1, U.S. Trade Representative Jamieson Greer said that the United States opted not to renew the USMCA deal in its current form.
Washington will discuss with partners to “address the Agreement’s shortcomings and our trade deficits with these countries,” he said. The deal has not been canceled and remains in force pending the resolution of disagreements or until it expires.
Lawmakers have criticized USMCA for offshoring manufacturing jobs from the United States and causing a depression in domestic wages.
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Cuba Plunges Into Second Island-Wide Blackout As Communist System Unravels
Cuba suffered its second nationwide blackout in a matter of days late Friday, another sign that the communist-controlled island is sliding deeper into economic collapse amid tightening US sanctions and renewed pressure from the Trump administration.
Havana blames US "gunboat diplomacy" and the financial sanctions for its economic demise, but the roots of the crisis are decades of communist rule, chronic underinvestment, widespread economic mismanagement and a crumbling power grid.
Yet America's Democratic Party is increasingly embracing socialism and communist ideology, a deeply misguided political messaging campaign at a time when Cuba is offering a real-world case study in how such systems repeatedly fail, leaving economic ruin, institutional decay and human suffering in their aftermath.
The latest islandwide blackout came as four US lawmakers urged the Trump administration to sanction Cuba's state-run overseas medical-services operator, arguing it exploits healthcare workers and generates revenue for the communist regime.
As we've described, the Feds are in the process of dismantling the command and control structure of a Cuba/China foreign subversion network with alleged links to left-wing NGOs and Democratic Party socialists:
- Leaked Memo Shows 'Pro-Cuba' NGO Network Preparing To Target ICE, US Bases, Federal Buildings
- "No Longer Tolerate Radical Marxists": Rubio Sanctions Revolutionary Cuban Influence Network Tied To U.S. Left-Wing NGOs
- Feds Nab Alleged Member Of "Sprawling" Cuban Communist Subversion Network Linked To Hasan Piker's Havana Trip
- DOJ Grand Jury Probes Neville Roy Singham's Marxist NGO Empire: Report
Even top Democrats are calling for investigations:
Back to the blackout. Just before the first nationwide outage earlier this week, Raúl Castro's grandson, Raúl Guillermo Rodríguez Castro, told USA Today that he was prepared to negotiate with President Trump.
The timing is notable. The Trump administration is intensifying pressure on Havana as Cuba's communist regime continues to implode, and at some point, will eventually force the regime toward market reforms and a greater role for capitalism.
Tyler Durden Sat, 07/11/2026 - 08:45