This bill raises the debt limits that determine who qualifies for certain types of bankruptcy protection under federal law. It sets the debt ceiling for small businesses seeking streamlined bankruptcy under Subchapter V at $7.5 million, up from previous levels, while excluding large publicly traded corporations and their affiliates from using this simplified process. It also raises the debt limit for individuals filing Chapter 13 personal bankruptcy to just under $2.75 million, combining what were previously separate limits for secured and unsecured debt into a single higher threshold. These changes affect small business owners and individual consumers who carry significant debt but want access to more efficient, less costly bankruptcy proceedings than standard Chapter 11. The new thresholds would apply immediately to any bankruptcy case filed on or after the law's enactment date, with no phase-in period specified.
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