S3977Passed Senate

Bankruptcy Threshold Adjustment Act of 2026

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Introduced
In Committee
Passed One Chamber
4
Passed Both
5
Signed into Law
119th
Congress
2026-03-03
Introduced
5
Cosponsors
S
ⓘ
Type

Sponsor

Chuck Grassley
Chuck Grassley
Republican · IA · Senator
Votes with party: 76.1% (853 recorded votes)

Full profile: /officials/G000386

Source: Congress.gov · FEC

Cosponsors (5)

Members who have signed on to support this bill since introduction. Source: Congress.gov.

Latest Action

The most recent step in the bill's legislative path. Committee Activity below shows referrals and reports; the full action-by-action history including floor proceedings lives at Congress.gov →

Passed Senate without amendment by Unanimous Consent. (consideration: CR S4412; text: CR S4412)

2026-08-03

Source: Congress.gov

Plain-English Summary

This bill would adjust the income and asset limits that determine whether individuals can file for bankruptcy protection, likely raising the thresholds to account for inflation since they were last updated. The changes would affect people struggling with debt by potentially making it easier or harder for them to qualify for different types of bankruptcy depending on how the limits are adjusted. Banks, credit card companies, and other creditors would also be affected since the rules determine how much debt gets forgiven versus repaid.

AI-assisted summary generated from the official bill metadata (title, subjects, actions) sourced from Congress.gov. Cached and reviewed. Always verify against the official text linked below.

Subjects

Finance and Financial Sector

Full Bill Text

Verbatim text published on Congress.gov via GovInfo. Use Cmd+F / Ctrl+F to search within this excerpt.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [S. 3977 Engrossed in Senate (ES)] <DOC> 119th CONGRESS 2d Session S. 3977 _______________________________________________________________________ AN ACT To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Bankruptcy Threshold Adjustment Act of 2026''. SEC. 2. DEBT LIMIT MODIFICATIONS. (a) Modification to the Small Business Bankruptcy Debt Limit.-- Section 1182(1) of title 11, United States Code, is amended to read as follows: ``(1) Debtor.--The term `debtor'-- ``(A) subject to subparagraph (B), means a person engaged in commercial or business activities (including any affiliate of such person that is also a debtor under this title and excluding a person whose primary activity is the business of owning single asset real estate) that has aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the petition or the date of the order for relief in an amount not more than $7,500,000 (excluding debts owed to 1 or more affiliates or insiders) not less than 50 percent of which arose from the commercial or business activities of the debtor; and ``(B) does not include-- ``(i) any member of a group of affiliated debtors under this title that has aggregate noncontingent liquidated secured and unsecured debts in an amount greater than $7,500,000 (excluding debt owed to 1 or more affiliates or insiders); ``(ii) any debtor that is a corporation subject to the reporting requirements under section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)); or ``(iii) any debtor that is an affiliate of a corporation described in clause (ii).''. (b) Modification to the Consumer Bankruptcy Debt Limit.--Section 109 of title 11, United States Code is amended by striking subsection (e) and inserting the following: ``(e) Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000 or an individual with regular income and such individual's spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000 may be a debtor under chapter 13 of this title.''. SEC. 3. EFFECTIVE DATE. The amendments made by this Act shall apply to any case that is commenced under title 11, United States Code, on or after the date of enactment of this Act. Passed the Senate August 3, 2026. Attest: Secretary. 119th CONGRESS 2d Session S. 3977 _______________________________________________________________________ AN ACT To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes.
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