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A change in bankruptcy laws U.S. Sen. Charles Grassley said will benefit families and small businesses has been unanimously approved by the Senate.
The Iowa Republican and U.S. Sen. Dick Durbin, D-Illinois, wrote the bill. It is called the Bankruptcy Theshold Adjustment Act of 2026.
The measure restores previous debt limits that were included in the complex federal bankruptcy laws.
"Our nation's bankruptcy code should work for Americans, not against them," Grassley said in a written statement. "By eliminating barriers to reorganization and restoring modern debt limits , the bipartisan Bankruptcy Threshold Adjustment Act would provide American families and small businesses the tools they need to regain their financial footing in a quicker, more streamlined process."
The bill restores higher debt thresholds that expired in 2024.
Those debt limits would be restored to $7.5 million and $2.75 million, depending on what provision of the bankruptcy laws are being used.
The bill now awaits action by committees in the House of Representatives.