US Congress moves closer to restoring access to popular small business bankruptcy program
PUBLISHED Sep 20, 2026, 12:30 PM ET
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The United States Congress is moving closer to restoring expanded bankruptcy options for small businesses as both chambers advance legislation. The House of Representatives recently passed a bill to permanently set the debt-eligibility limit for Subchapter V bankruptcies at seven point five million dollars. This action follows unanimous Senate approval of a companion measure in August. The bipartisan legislative push aims to reinstate a higher threshold that originally expired in twenty twenty four, after being temporarily established during the coronavirus pandemic. Subchapter V offers a streamlined, cost-effective alternative to traditional Chapter eleven restructuring by eliminating burdensome requirements like creditors committees and Department of Justice quarterly fees. Legal experts note that surging filings demonstrate strong demand for accessible restructuring tools as businesses navigate modern economic pressures. Once both chambers reconcile minor textual differences, the unified legislation will head to the president for signature.
By Ayesha A. | JQJO News
Timeline of Events
- On Feb 19, 2020 Congress established Subchapter V via Small Business Reorganization Act.
- On Mar 27, 2020 CARES Act temporarily raised debt limit to seven point five million.
- On Jun 21, 2024 Expanded temporary debt threshold expired and reverted lower.
- On Feb 26, 2026 Representative Ben Cline introduced House bankruptcy adjustment bill.
- On Apr 08, 2026 Senate Judiciary Committee advanced bipartisan threshold adjustment act.
- On Aug 03, 2026 Senate unanimously passed Bankruptcy Threshold Adjustment Act.
- On Sep 16, 2026 House of Representatives passed companion legislation by voice vote.
- On Sep 18, 2026 American Bankruptcy Institute publicly applauded congressional legislative progress.
- Congress will reconcile final technical text between versions in coming days.
- President is expected to sign reconciled bankruptcy legislation in coming weeks.
News Intelligence
- Immediate US impact: Expands small business restructuring access across all federal districts.
- Possible long-term US impact: Permanently stabilizes small business insolvency frameworks and corporate recoveries.
- Most affected groups: Distressed small businesses, commercial debtors, restructuring attorneys, and creditors.
- Reader priority: Monitor congressional final text reconciliation and presidential signature timeline updates.
- Articles Published:
- 25
- Right Leaning:
- 0
- Left Leaning:
- 0
- Neutral:
- 25
- Distribution:
- Left 0%, Center 100%, Right 0%
Left: Emphasizes protecting struggling small business workers and economic equity. Center: Focuses objectively on legislative mechanics, voting records, and statistics. Right: Highlights regulatory relief, reduced government burdens, and market flexibility.
House passed Bankruptcy Threshold Adjustment Act via voice vote. https://nacba.org/news/735214/House-Passes-Bankruptcy-Threshold-Adjustment-Act-by-Voice-Vote/
Coverage of Story:
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From Center
More Hope for Small Businesses: House Passes Its Version of Bankruptcy Threshold Adjustment Act of 2026
Bernstein Shur Ervin Cohen and Jessup LLP National Association of Consumer Bankruptcy Attorneys Dykema NACTT Academy National Law Review Chuhak and Tecson PC American Bankruptcy Institute Reuters Bloomberg Law Wall Street Journal Law360 Forbes Politico The Hill Polsinelli Fox Rothschild Norton Rose Fulbright Skadden White and Case Willkie Farr and Gallagher Covington and Burling Debevoise and Plimpton Jenner and Block O Melveny and MyersFrom Right
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