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Bankruptcy Threshold Adjustment Act: New Debt Limits for Individuals and Businesses

This act increases the debt limits for small businesses and individuals to qualify for simpler bankruptcy processes. It makes it easier for more people and small companies to reorganize their debts and get a fresh start.
Key points
The debt limit for small businesses to access streamlined bankruptcy is set at $7.5 million.
The individual debt limit for Chapter 13 bankruptcy is increased to $2.75 million for both single and joint filers.
More debtors with regular income can now use simpler court procedures to manage their debt.
The changes apply to all new bankruptcy cases filed on or after the date the law is enacted.
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Status:
Introduced
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Additional Information
Print number: 119_HR_7730
Sponsor: Rep. Cline, Ben [R-VA-6]
Process start date: 2026-02-26
System Note: Lustra is free, publicly auditable civic infrastructure, with full source code available on GitHub. You are reading sterilized legislative data, processed by our radical neutrality engine to strip political spin and retain factual mechanics. We process only official government data. Original documents remain the authoritative source, always verify them if you can.
Summarized by: gemini-flash-latest
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Bankruptcy Threshold Adjustment Act of 2026

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_7730.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2026-02-26.

What are the main provisions?

Key points include:

  • The debt limit for small businesses to access streamlined bankruptcy is set at $7.5 million.
  • The individual debt limit for Chapter 13 bankruptcy is increased to $2.75 million for both single and joint filers.
  • More debtors with regular income can now use simpler court procedures to manage their debt.
  • The changes apply to all new bankruptcy cases filed on or after the date the law is enacted.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Cline, Ben [R-VA-6].

What is the latest detailed status?

The latest detailed status is: Ordered to be Reported (Amended) by Voice Vote.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2026-03-20.

What is the impact of this bill?

We don't know, that is up to you to decide. Summarizing raw data with AI is fundamentally different from predicting socio-economic outcomes. As of 2026, we believe impact assessment strictly requires a human in the loop to verify and judge.

CATEGORIES

Courts and Law Economy