S. 3977 · Where this bill is now
In the House
Passed the Senate Aug 3, 2026. Received Aug 10, 2026; no House vote yet
What this bill does
In plain words · AI-written from the official summaryRaises debt limits for small business bankruptcies
This bill brings back changes that expired in 2024 about how much debt a business or individual can have to use certain bankruptcy options. Specifically, it raises the limit for small business reorganizations from around $3.4 million to $7.5 million, and raises the limit for wage earners filing bankruptcy from around $2.1 million to $2.75 million. It also changes how Chapter 13 bankruptcy counts debt, so that both money owed on secured items (like mortgages) and unsecured debts (like credit cards) count toward the same limit.
How it affects you
If you own a small business or are a wage earner facing significant debt, higher limits mean you'd have more options to reorganize and pay back some debts through a bankruptcy plan rather than liquidating everything. Most other people wouldn't feel a direct effect from this change.
Read the official summary (Passed Senate, Aug 3, 2026)
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.)
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
2nd SessionS. 3977
AN ACT
Bankruptcy Threshold Adjustment Act of 2026
Sponsor: Sen. Chuck Grassley (R-IA) · Introduced Mar 3, 2026 · Finance and Financial Sector · 2 versions of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Aug 10, 2026: “Held at the desk.”
Sections
The wording of this bill hasn’t changed across its 2 official versions.