S. 3977 · Passed Senate · Finance and Financial Sector

Bankruptcy Threshold Adjustment Act of 2026

Sponsor: Chuck Grassley (R-IA)

What it does

• Increases the Subchapter V small business reorganization debt limit from approximately $3.4 million to $7.5 million.
• Increases the Chapter 13 wage earner bankruptcy cumulative debt limit from approximately $2.1 million to $2.75 million.
• Combines secured and unsecured debt into a single cumulative limit for Chapter 13 bankruptcy eligibility.

Official 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.)

Latest action

Aug 10, 2026: Held at the desk.