Rep. Cline Introduces Bipartisan Bill to Raise Bankruptcy Debt Limits to $7.5 Million
The Bankruptcy Threshold Adjustment Act of 2026 is currently in the House Judiciary Committee. Although the committee voted to report the bill in March 2026, there has been no further action for three months. The bill is now stalled because no progress has been made since March 2026.
Scores run from -100 (strongly harmful) to +100 (strongly beneficial) for each group, combining impact, certainty, scope, and duration ratings of 1-5. How impact scoring works
Homeowners with total debts up to $2.75 million would now qualify for Chapter 13 bankruptcy, which is specifically designed to help people keep their homes while repaying debts on a structured plan. Previously, homeowners with high mortgage balances in expensive housing markets could be disqualified from Chapter 13, forcing them into less favorable bankruptcy options that might require selling the home.
“Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000”
Ordered to be Reported (Amended) by Voice Vote.
The committee approved this bill and is sending it to the full chamber for a vote. This is a significant step — most bills never get this far.
Committee Consideration and Mark-up Session Held
Referred to the House Committee on the Judiciary.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Reps. Ben Cline and Laurel Lee introduced the bipartisan Bankruptcy Threshold Adjustment Act of 2026 (H.R. 7730) to permanently raise the small business reorganization threshold for Chapter 11 to $7.5 million, providing a more cost-effective process for local businesses to stay operational.
Rep. Ben Cline joined a bipartisan group to introduce H.R. 7730, which would permanently set the small business bankruptcy reorganization limit at $7.5 million. The bill aims to help local businesses stay in operation and keep employees on the payroll while they work out a plan to pay debts.
The article reports on the introduction of S. 3977, the Senate version of the Bankruptcy Threshold Adjustment Act of 2026. The bill seeks to permanently restore the $7.5 million debt limit for Subchapter V small business cases and simplify eligibility for individual reorganization options.
No votes recorded for this bill yet.
Document Type
Congressional Bill
Official Title
Bankruptcy Threshold Adjustment Act of 2026
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