Congress quietly raises bankruptcy eligibility limits for businesses and consumers
H.R. 7730 — Bankruptcy Threshold Adjustment Act · Filed by Ben Cline (R-VA) · 6 cosponsors · Introduced Feb 26, 2026 · Passed both chambers
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What it does
This bill raises the debt thresholds that determine who can file for bankruptcy protection. It increases the small-business bankruptcy limit from the current level to $7.5 million in total debts, and raises the consumer bankruptcy limit for Chapter 13 filings (wage-earner repayment plans) to $2.75 million. The effect is to allow more businesses and individuals with higher debt loads to access bankruptcy courts, though the bill does not specify what the prior thresholds were.
Why we flagged it
The bill's sole operative function is to raise debt thresholds for bankruptcy eligibility. It does not create new bankruptcy chapters, change discharge rules, or alter creditor priorities — it simply expands who qualifies to file.
What the text implies
- The bill does not specify the prior thresholds it replaces, making it impossible from the text alone to assess how much access is actually expanding — the prior limits may have been indexed to inflation or may have been static for decades.
- Raising the small-business threshold to $7.5M may allow larger enterprises to access Chapter 11 protections, potentially shifting leverage in restructuring negotiations toward debtors and away from secured creditors.
- The $2.75M consumer threshold is unusually high for Chapter 13 (wage-earner repayment), which traditionally serves lower-income debtors; this may redirect higher-income debtors into Chapter 13 instead of Chapter 7 liquidation, affecting creditor recovery rates.
- No sunset or inflation-adjustment mechanism is included, so these thresholds may become outdated relative to economic growth and debt levels over time.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Expanding bankruptcy access benefits debtors who can now discharge or restructure debts they previously could not address in court, reducing personal financial distress and potentially preventing predatory collection tactics. However, higher thresholds may also benefit creditors by allowing larger debtors to enter bankruptcy (where creditors may recover more through a court-supervised plan than through collection), and the bill does not address whether these thresholds keep pace with inflation o
Who stands to gain
- small businesses and sole proprietors with $2M–$7.5M in debt
- individuals and couples with $1M–$2.75M in debt seeking Chapter 13 repayment plans
- bankruptcy attorneys (increased caseload)
Named in the bill
title 11, United States Code, Section 1182(1) (small business bankruptcy), Section 109(e) (consumer bankruptcy), Chapter 13 (wage-earner repayment plans), Securities Exchange Act of 1934
Where it stands
6 cosponsors: 3 Democrats, 3 Republicans.
- Feb 26, 2026 — Introduced · Congress.gov: “Introduced in House”
- Feb 26, 2026 — Referred to House Committee on the Judiciary · Congress.gov: “Referred to the House Committee on the Judiciary”
- Mar 26, 2026 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
- Mar 26, 2026 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by Voice Vote”
- Sep 16, 2026 — Passed the House · Congress.gov: “On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote”
- Sep 16, 2026 — Floor vote scheduled · Congress.gov: “Mr. Cline moved to suspend the rules and pass the bill, as amended”
- Sep 28, 2026 — Passed both chambers · Congress.gov: “Passed Senate without amendment by Unanimous Consent. (consideration: CR S5123)”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $480,000 in lobbying spend. A filing names 10 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 41% of bills with at least one filing.
Ben Cline, the sponsor, reported $652,276 in PAC receipts in the 2026 cycle.
- International Council of Shopping Centers — $460,000 on 1 filing
- National Association of Bankruptcy Trustees — $20,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (2,253 characters) on Jul 9, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Jun 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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