Bankruptcy Threshold Adjustment Act of 2026
Latest action (3 Aug 2026): Passed Senate without amendment by Unanimous Consent.
What this bill does
The Bankruptcy Threshold Adjustment Act of 2026 would amend title 11 of the U.S. Code, the federal bankruptcy law, to change the debt limits that determine who qualifies to file certain types of bankruptcy cases. For small businesses seeking to reorganize under Subchapter V, the bill sets the eligibility threshold at $7,500,000 in aggregate secured and unsecured debt, with exclusions for debts owed to affiliates or insiders, publicly reporting corporations, and companies whose primary business is owning single-asset real estate. For individuals filing Chapter 13 consumer bankruptcy, the bill sets the debt ceiling at $2,750,000, applicable to an individual or an individual and spouse filing jointly.
These changes would affect small business owners and individual consumers seeking bankruptcy protection, by adjusting the debt levels below which they remain eligible to use these particular bankruptcy chapters, which offer different procedures than standard Chapter 7 or Chapter 11 filings. The amendments would apply only to bankruptcy cases filed on or after the law's enactment date.
The bill was introduced by Senator Chuck Grassley on March 3, 2026, and passed the Senate without amendment by unanimous consent on August 3, 2026. It now goes to the House of Representatives for consideration before it could be sent to the President.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
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.)
Timeline
3 Aug 2026
Passed Senate without amendment by Unanimous Consent.
Common questions
- What does S. 3977 do?
- The Bankruptcy Threshold Adjustment Act of 2026 would amend title 11 of the U.S. Code, the federal bankruptcy law, to change the debt limits that determine who qualifies to file certain types of bankruptcy cases. For small businesses seeking to reorganize under Subchapter V, the bill sets the eligibility threshold at $7,500,000 in aggregate secured and unsecured debt, with exclusions for debts owed to affiliates or insiders, publicly reporting corporations, and companies whose primary business is owning single-asset real estate. For individuals filing Chapter 13 consumer bankruptcy, the bill sets the debt ceiling at $2,750,000, applicable to an individual or an individual and spouse filing jointly. These changes would affect small business owners and individual consumers seeking bankruptcy protection, by adjusting the debt levels below which they remain eligible to use these particular bankruptcy chapters, which offer different procedures than standard Chapter 7 or Chapter 11 filings. The amendments would apply only to bankruptcy cases filed on or after the law's enactment date. The bill was introduced by Senator Chuck Grassley on March 3, 2026, and passed the Senate without amendment by unanimous consent on August 3, 2026. It now goes to the House of Representatives for consideration before it could be sent to the President.
- Has S. 3977 become law?
- Not yet. As of 3 Aug 2026, S. 3977 is passed senate (house next).
- Who sponsored S. 3977?
- S. 3977 was sponsored by Sen. Charles “Chuck” Grassley [R-IA] (Republican-IA), with 5 cosponsors.
- What's the latest action on S. 3977?
- Passed Senate without amendment by Unanimous Consent. (3 Aug 2026).
Related bills in Finance and Financial Sector
Small Business Audit Correction Act of 2026
Terrorism Risk Insurance Program Reauthorization Act of 2026
Bankruptcy Threshold Adjustment Act
Consumer Financial Protection Accountability and Reform Act of 2026
Bill100 mirrors the public U.S. legislative record from Congress.gov and GovTrack and adds plain-English AI summaries. It is an information tool, not legal, compliance or lobbying advice, and it is not affiliated with the U.S. Congress or any government agency. AI summaries can simplify or omit detail — every bill links to the official source; verify there before you rely on it.