What does Preamble of Bankruptcy Threshold Adjustment Act of 2026 do?

This bill proposes to amend title 11, United States Code, which pertains to bankruptcy. The bill's stated purpose is to modify certain bankruptcy eligibility requirements. The bill also includes provisions for 'other purposes,' which are not further detailed in this section.

What does SHORT TITLE. of Bankruptcy Threshold Adjustment Act of 2026 do?

This bill is formally titled the Bankruptcy Threshold Adjustment Act of 2026.

What does DEBT LIMIT MODIFICATIONS. of Bankruptcy Threshold Adjustment Act of 2026 do?

This section modifies the debt limits for small businesses and consumers filing for bankruptcy under Title 11 of the United States Code. For small businesses, Section 1182(1) is amended to define a 'debtor' as one engaged in commercial or business activities with aggregate noncontingent liquidated debts not exceeding $7,500,000 (excluding debts owed to affiliates or insiders). The definition excludes members of affiliated debtor groups with debts exceeding $7,500,000, corporations subject to SEC reporting requirements, and affiliates of such corporations. For consumers, Section 109 is amended to allow individuals with regular income to be debtors under Chapter 13 if their noncontingent, liquidated debts aggregate less than $2,750,000. This consumer provision also applies to an individual and their spouse, except for stockbrokers or commodity brokers, with similar debt limits.

What does EFFECTIVE DATE. of Bankruptcy Threshold Adjustment Act of 2026 do?

This section establishes an effective date for the amendments made by this Act. The amendments apply to cases commenced under title 11 of the United States Code. Cases must be commenced on or after the date of enactment of this Act to be affected.

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Bankruptcy Threshold Adjustment Act of 2026

Last updated: 3/26/2026 · Introduced: 2/26/2026

Author: Ben Cline (R-VA)

TL;DR (AI)

The bill increases the debt limit for small businesses filing for bankruptcy under Title 11 to $7,500,000, excluding certain corporate entities and affiliated groups.
The bill raises the debt limit for individuals filing for Chapter 13 bankruptcy to $2,750,000, applying to both the individual and their spouse, with exceptions for stockbrokers and commodity brokers.
The changes made by this bill will apply to bankruptcy cases commenced on or after the date of enactment.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

4 sections

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