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Proposed Bankruptcy Threshold Adjustment Act of 2026

Original title: Text of Senate Amendment 6122

Record date · June 24, 2026

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What This Bill Does

This proposed amendment to the 2027 defense authorization bill would increase the debt limits for small businesses and individuals filing for bankruptcy. It aims to allow more entities to qualify for streamlined bankruptcy processes by raising the maximum debt thresholds for eligibility.

Why it matters

If enacted, this change would allow small businesses with up to $7.5 million in debt and individuals with up to $2.75 million in debt to qualify for specific bankruptcy chapters, potentially altering the legal options available to debtors and creditors.

Who It Affects

Groups the bill's text affects, as described in the record. Being affected is not a position for or against it.

Directly affected

Small business owners

The amendment changes the debt thresholds that determine their eligibility for specific bankruptcy proceedings.

Directly affected

Individual debtors

The amendment increases the debt limit for individuals seeking to file for Chapter 13 bankruptcy.

Key Facts

You don't have to trust us. Each fact below is taken straight from the official document - click any one to see the exact passage, highlighted in the original.

Frequently Asked Questions

Who would be eligible for the new small business bankruptcy limit?

Businesses with up to $7.5 million in , provided at least 50% of that debt is business-related and they are not a single-asset real estate firm or a publicly traded corporation.

How does this change individual bankruptcy?

It raises the debt ceiling for individuals (and their spouses) to qualify for bankruptcy to $2.75 million.

What else do you want to know?

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Full breakdown

Who this bill affects and the strongest case for and against it, written only from the bill’s own text.

Related Legislation

congressional record

Senate Scheduling Update for S. 4784

The Senate has agreed to delay the vote on a cloture motion for S. 4784 until after the confirmation vote for the Schwartz nomination. This procedural

Discoveries

1 pattern noticed across the record

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift90% confidence

Expansion of Bankruptcy Access

The amendment continues a trend of raising debt limits to allow more entities to utilize streamlined bankruptcy chapters.

Mr. Grassley Mr. Durbin

Connected Entities

Department of Defense, Mr. Grassley, Department of Energy and 1 more

OrganizationDepartment of Defense“Agency affected by the underlying bill S. 4784.”Map →

PersonMr. Grassley“U.S. Senator who submitted the amendment.”Map →

OrganizationDepartment of Energy“Agency affected by the underlying bill S. 4784.”Map →

PersonMr. Durbin“U.S. Senator who co-sponsored the amendment.”Map →

Sources

Open source document

www.govinfo.gov

Analysis Score

0–100

Significance65
How much this matters to a regular citizen
Controversy20
Intensity of disagreement among stakeholders
Entertainment5
Compellingness for a non-policy-wonk reader
Buzz15
Current news / social attention level

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