Indiana Fire Department Files for Bankruptcy Under Chapter 11
It doesn’t happen very often, so when it does, it’s rather significant. A fire company in Indiana has filed for bankruptcy.
On July 22, 2025, the Utica Township Fire Department, Inc., doing business as New Chapel Fire & EMS, filed a voluntary petition for relief under Chapter 11, Subchapter V, in the U.S. Bankruptcy Court for the Southern District of Indiana.
Chapter 11 of the Bankruptcy Code is typically used by businesses to restructure debt while continuing operations. Subchapter V, enacted under the Small Business Reorganization Act of 2019, streamlines the process for qualifying small businesses with less than $3,024,725 in non-contingent, liquidated debts (adjusted periodically for inflation). It allows the debtor to retain control of operations while proposing a reorganization plan without needing creditor approval, provided it meets statutory requirements.
According to the petition, the fire company estimates between $1 million and $10 million in assets and liabilities, with secured debts totaling $643,147.49 and no listed unsecured debts as of the filing date. The department lists $1,073,589.99 in assets—most of which consist of apparatus, vehicles, and accounts receivable. The petition also reflects ongoing disputes with the Utica Township Fire Protection District and references potential insurance claims related to alleged mismanagement by former leadership.
In addition to operating as a nonprofit, tax-exempt corporation (501(c)(3)), the fire company reports 20 executory contracts, including leases for office and equipment storage, and multiple insurance policies.
The filing marks an important procedural and financial moment, not just for the department but also for the local government entities and creditors involved. As this case unfolds, it may also offer broader lessons for other fire departments navigating financial and operational pressures, particularly those operating in hybrid public-private governance models.
Attached is a copy of the bankruptcy petition:
