Federal lawmakers have approved a significant increase in debt limits for bankruptcy relief, aimed at providing small businesses and individuals with greater access to financial options amid economic challenges and ongoing inflation.
On September 28, the Senate passed H.R. 7730 after the House approved it earlier. The legislation, now awaiting President Trump’s signature, reinstates higher debt limits for the first time in two years, which may lead to an uptick in small business bankruptcies as practitioners anticipate.
The new legislation raises the debt limit under Subchapter V of Chapter 11 from $3.4 million to $7.5 million, facilitating more favorable conditions for struggling small businesses.
