The American Bankruptcy Institute (ABI) applauds the Senate’s passage on Monday of S. 3977, the “Bankruptcy Threshold Adjustment Act of 2026.” Sen. Charles Grassley (R-Iowa) introduced the bill with bipartisan support in March to permanently raise the debt limit back to $7.5 million for small businesses electing to file for bankruptcy under subchapter V of chapter 11. Consistent with the recommendations of ABI’s Commission on Consumer Bankruptcy, the legislation also raises the debt limit for individual chapter 13 filings to $2.75 million and removes the distinction between secured and unsecured debt for that calculation. The legislation now moves to the House of Representatives for consideration. Companion legislation (H.R. 7730) was introduced by Rep. Ben Cline (R-Va.) with bipartisan cosponsors in the House of Representatives and was favorably reported out of the House Judiciary Committee on March 26.