S. 3977 — Bankruptcy Threshold Adjustment Act of 2026

This section modifies the debt limits for bankruptcy cases under title 11 of the United States Code. (1) It increases the aggregate debt limit for a small business debtor eligible to elect subchapter V to $7,500,000 (from $2,750,000), excluding debts owed to affiliates or insiders and requiring that not less than 50 percent of such debts arose from the debtor’s commercial or business activities; the provision also excludes from eligibility any affiliated group exceeding the limit, any debtor subject to SEC reporting requirements, and any affiliate of such a debtor. (As background, subchapter V provides a streamlined reorganization process for small business debtors.) (2) It decreases the debt limit for an individual debtor (or individual and spouse) to file under chapter 13 to less than $2,750,000 (from $7,500,000).