S3977Passed Senate

Bankruptcy Threshold Adjustment Act of 2026

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Introduced
In Committee
Passed One Chamber
4
Passed Both
5
Signed into Law
119th
Congress
2026-03-03
Introduced
5
Cosponsors
S
ⓘ
Type

Sponsor

Chuck Grassley
Chuck Grassley
Republican · IA · Senator
Votes with party: 76.3% (866 recorded votes)

Full profile: /officials/G000386

Source: Congress.gov · FEC

Cosponsors (5)

Members who have signed on to support this bill since introduction. Source: Congress.gov.

Latest Action

The most recent step in the bill's legislative path. Committee Activity below shows referrals and reports; the full action-by-action history including floor proceedings lives at Congress.gov →

Held at the desk.

2026-08-10

Source: Congress.gov

Plain-English Summary

Bankruptcy Threshold Adjustment Act of 2026 This bill restores changes that expired in 2024 applicable to debt limits for Subchapter V (small business reorganization) and Chapter 13 (the wage earner's plan) bankruptcies. Specifically, the bill increases the debt limit under Subchapter V from approximately $3.4 million to $7.5 million and increases the cumulative debt limit under Chapter 13 from approximately $2.1 million to $2.75 million. The bill also applies both secured and unsecured debt towards the Chapter 13 limit. (Currently, separate limits apply to secured and unsecured debt under Chapter 13 bankruptcy.)

Plain-English rewrite of the Congressional Research Service summary published on Congress.gov. Cached and reviewed.

Subjects

Finance and Financial Sector

Full Bill Text

Verbatim text published on Congress.gov via GovInfo. Use Cmd+F / Ctrl+F to search within this excerpt.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [S. 3977 Engrossed in Senate (ES)] <DOC> 119th CONGRESS 2d Session S. 3977 _______________________________________________________________________ AN ACT To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Bankruptcy Threshold Adjustment Act of 2026''. SEC. 2. DEBT LIMIT MODIFICATIONS. (a) Modification to the Small Business Bankruptcy Debt Limit.-- Section 1182(1) of title 11, United States Code, is amended to read as follows: ``(1) Debtor.--The term `debtor'-- ``(A) subject to subparagraph (B), means a person engaged in commercial or business activities (including any affiliate of such person that is also a debtor under this title and excluding a person whose primary activity is the business of owning single asset real estate) that has aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the petition or the date of the order for relief in an amount not more than $7,500,000 (excluding debts owed to 1 or more affiliates or insiders) not less than 50 percent of which arose from the commercial or business activities of the debtor; and ``(B) does not include-- ``(i) any member of a group of affiliated debtors under this title that has aggregate noncontingent liquidated secured and unsecured debts in an amount greater than $7,500,000 (excluding debt owed to 1 or more affiliates or insiders); ``(ii) any debtor that is a corporation subject to the reporting requirements under section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)); or ``(iii) any debtor that is an affiliate of a corporation described in clause (ii).''. (b) Modification to the Consumer Bankruptcy Debt Limit.--Section 109 of title 11, United States Code is amended by striking subsection (e) and inserting the following: ``(e) 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 or an individual with regular income and such individual's spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000 may be a debtor under chapter 13 of this title.''. SEC. 3. EFFECTIVE DATE. The amendments made by this Act shall apply to any case that is commenced under title 11, United States Code, on or after the date of enactment of this Act. Passed the Senate August 3, 2026. Attest: Secretary. 119th CONGRESS 2d Session S. 3977 _______________________________________________________________________ AN ACT To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes.
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