Bankruptcy Threshold Adjustment Act of 2026

This legislation, known as the Bankruptcy Threshold Adjustment Act of 2026, aims to broaden access to specific bankruptcy protections by modifying existing debt limits. It significantly increases the maximum allowable debt for small businesses seeking reorganization under Subchapter V of Chapter 11 of the Bankruptcy Code.

Specifically, the bill raises the aggregate noncontingent liquidated secured and unsecured debt threshold for small business debtors to $7,500,000, excluding certain inter-company debts and publicly traded corporations. This adjustment allows more small businesses to utilize the streamlined and cost-effective provisions of Subchapter V. Furthermore, the bill amends the eligibility requirements for individuals filing under Chapter 13, increasing their maximum noncontingent, liquidated debt limit to $2,750,000. These changes are intended to apply to all bankruptcy cases commenced on or after the bill's enactment date, providing broader relief for both small businesses and consumers.