ABI Applauds Renewed Congressional Efforts to Expand Access for More Distressed Small Businesses to Reorganize Under Subchapter V
On 3/26/26 The American Bankruptcy Institute (ABI) and ABI’s Subchapter V Task Force announced its support for bipartisan legislation that would restore and permanently increase the debt eligibility cap for subchapter V small business reorganizations to $7.5 million. The “Bankruptcy Threshold Adjustment Act of 2026” was recently introduced by Senate Pro Tempore and Senate Judiciary Committee Chair Charles Grassley (R-Iowa) and Rep. Ben Cline (R-Va.) in the House of Representatives. In a letter to the sponsors, co-sponsors and members of both the House and Senate Judiciary Committees, ABI and its Subchapter V Task Force emphasized that expanding access to subchapter V is critical to preserving an effective and efficient restructuring pathway for financially distressed small businesses.