Bankruptcy Threshold Adjustment Act of 2026
Bipartisan Bill Proposes Raising Debt Limits to Help More Small Businesses and Homeowners File for Bankruptcy
Legislative Progress
Key Points
- This bill makes it easier for more small businesses and individuals to use simpler, faster bankruptcy processes. It does this by raising the maximum amount of debt a person or business can have while still being eligible for these streamlined legal options.
- Small businesses with up to $7.5 million in debt would qualify for a special type of bankruptcy that is usually cheaper and faster than the standard version. This allows business owners to keep their doors open and stay in control of their company while they create a plan to pay back their creditors.
- For individuals, the bill sets a single debt limit of $2.75 million to qualify for Chapter 13 bankruptcy. This process is often used by people who want to save their homes from foreclosure or keep their cars while paying off their debts over a period of three to five years.
- Without these changes, many people and businesses with higher debts are forced into more expensive and complicated legal battles. These tougher processes often result in businesses closing down or people losing their assets entirely.
- These new debt limits would apply to any new bankruptcy cases started on or after the day the bill is signed into law.
Impact Analysis
Personal Impact
Some renters with high debt levels — such as those with large medical bills, student loans, or other obligations — could now qualify for Chapter 13 bankruptcy under the raised $2.75 million limit. While most renters don't carry debt at this level, the higher threshold removes a barrier for the small number who do, giving them access to a more manageable repayment plan.
Milestones
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 347.
The bill is now on the schedule for the full chamber to consider. It's in line for debate and a vote.
Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
The bill was officially filed and given a number. It now enters the legislative queue.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
News
No related news coverage found for this legislation yet.
Source Information
Document Type
Congressional Bill
Official Title
Bankruptcy Threshold Adjustment Act of 2026
Data Sources
Sponsor
Cosponsors
(5)Analysis generated by AI. Always verify with official sources.