YourVoice.Now Summary
Your MoneyCorporate BenefitsChapter 13 bankruptcy would open to people owing under $2,750,000, with home loans and other debt counted as one. Passed the Senate.
Your Money
Chapter 13 is the repayment plan that lets someone with regular income keep a home or car. Owing too much shuts that door. Fixed debts would have to come in under $2,750,000, whether one person files or a married couple files together.
The text strikes the old subsection and puts one combined number in its place. Debt backed by property and debt that is not are added up together. Someone with a big mortgage but little other debt could qualify for the first time.
Corporate Benefits
The small-business route through chapter 11 would be open to firms owing up to $7,500,000, not counting debt owed to insiders or affiliates. Half of that debt must come from the business. Public companies and firms tied to them still could not use it. More firms could reorganize this way instead of closing, and lenders may recover less when they do.
More about this bill
People with steady income could owe far more and still file chapter 13 bankruptcy. Chapter 13 lets you keep a home or car while a court plan pays your debts down. Fixed debts would have to stay under $2,750,000. Debt backed by property and debt that is not would count together toward that one number. A married couple filing together would share the same limit. Small business owners would get more room too. The small-business track through chapter 11 would open to firms with debts up to $7,500,000. Public companies that report to federal regulators stay shut out. So do firms tied to them. So do owners whose main business is holding a single piece of real estate. Both limits would cover only cases filed on or after the day the bill becomes law. Cases already open would keep the rules they started under. Nothing in the text sets an end date, so the new limits would not run out on their own. The Senate passed the bill on August 3, 2026. The House has not voted, so no limit has changed yet.
Congressional Summary
Bankruptcy Threshold Adjustment Act of 2026This 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.)
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- Senate
- Status
- summarized
- Action
- Passed Senate
- Action Date
- 2026-08-03
- Date Added
- 2026-08-27
- Source
- Congress.gov →
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