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The Bankruptcy Threshold Adjustment Act of 2026 proposes changes to the current bankruptcy laws by increasing the maximum debt amounts that individuals and small businesses can have to be eligible for specific bankruptcy chapters. For small businesses, the bill raises the debt limit to $7.5 million, allowing businesses with debts up to this amount to file under Chapter 11 bankruptcy, which is designed to help them reorganize and continue operations. For individuals, the bill increases the debt limit to $2.75 million for filing under Chapter 13 bankruptcy, which allows debtors with regular income to create a repayment plan to pay back all or part of their debts over time. The bill excludes certain entities such as publicly traded companies and their affiliates from these limits. These changes aim to reflect inflation and economic growth since the last adjustment, potentially making bankruptcy protections accessible to more debtors who need them. The amendments would apply to bankruptcy cases filed after the bill becomes law.