Bankruptcy Threshold Adjustment Act of 2026

Key provisions

• Subchapter V Small Business Debt Limit
  • New 11 U.S.C. §1182(1)(A) covers persons engaged in commercial/business activities (including affiliates that are also debtors) with aggregate noncontingent liquidated secured and unsecured debts of not more than $7.5M (excluding debt owed to affiliates or insiders)
  • At least 50 percent of the debt must have arisen from the commercial or business activities of the debtor
  • Excludes single-asset real estate debtors whose primary activity is owning single-asset real estate
• Subchapter V Group and Public-Company Exclusions
  • Bars any member of a group of affiliated debtors whose aggregate qualifying debts exceed $7.5M (excluding debt owed to affiliates or insiders)
  • Bars any debtor that is a corporation subject to Section 13 or 15(d) reporting under the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d))
  • Bars any debtor that is an affiliate of such a public reporting company
• Chapter 13 Individual Debt Limit
  • New 11 U.S.C. §109(e): only an individual with regular income (or such an individual and spouse, other than a stockbroker or commodity broker) with noncontingent, liquidated debts that aggregate less than $2.75M is eligible to file under Chapter 13
  • Replaces the current version of §109(e), which splits its debt limit into a secured-debt cap and an unsecured-debt cap
• Effective Date
  • The amendments made by the Act apply to any case commenced under title 11, United States Code, on or after the date of enactment