H.R. 7730: Bankruptcy Threshold Adjustment Act
Sponsor
Ben Cline
Republican · VA-6
Debt ceilings shouldn’t block a fresh start
Why it matters
$7.5 million would become the debt ceiling for the bill’s small-business bankruptcy framework. For a business with exactly that much counted debt, at least $3.75 million would need to come from business activity; individuals and couples would face a separate Chapter 13 limit of less than $2.75 million.
H.R. 7730 would set a $7.5 million ceiling for the small-business bankruptcy framework. A business at that ceiling would need at least $3.75 million of its counted debt to come from commercial or business activity because the bill requires a minimum 50% business-debt share.
Qualifying owners could use the small-business process with up to $7.5 million in secured and unsecured debt. Debts owed to affiliates or insiders would not count toward that ceiling, but affiliated businesses in bankruptcy would be tested together against the same limit.
The bill would also let a person with regular income—or that person and a spouse—use Chapter 13 when their combined qualifying debt is less than $2.75 million. The wording matters: someone owing exactly $2.75 million would fall outside that threshold.
The new limits would apply only to bankruptcy cases filed on or after the bill becomes law. Existing cases would continue under the eligibility rules in effect when they began.
Not every business below $7.5 million would qualify. Public-reporting corporations and their affiliates, businesses primarily devoted to owning a single real-estate asset, and affiliated debtor groups above the ceiling would remain outside the small-business definition; stockbrokers and commodity brokers would remain ineligible for Chapter 13.
Bill Progress
Latest Action · Nov 5, 2026
Presented to President.
H.R. 7730 Bill Summary
What H.R. 7730 actually does.
Small businesses get a $7.5 million ceiling
A qualifying business could use the small-business bankruptcy framework with no more than $7.5 million in counted secured and unsecured debt.
At least half the debt must come from business
No less than 50% of a qualifying debtor’s aggregate debt would need to arise from commercial or business activity. At the $7.5 million ceiling, that would mean at least $3.75 million in business-related debt.
Related businesses share one eligibility test
Affiliated debtors in bankruptcy would be measured together and excluded if their combined counted debt exceeds $7.5 million. Debts owed to affiliates or insiders would be left out of the calculation.
Chapter 13 opens below $2.75 million
A person with regular income, or that person and a spouse, could qualify when their combined noncontingent, liquidated debt is less than $2.75 million on the filing date.
New filings get the new limits
The revised eligibility rules would apply to bankruptcy cases started on or after enactment, not cases already underway.
Who benefits from H.R. 7730?
Owners trying to keep a small business operating
A shop, restaurant, contractor, or family business with up to $7.5 million in counted debt could qualify if at least half of its debt arose from business activity and the other requirements are met.
People carrying substantial personal debt
An individual with regular income could seek Chapter 13 with qualifying debt below $2.75 million, allowing repayment through a court-supervised plan rather than making eligibility depend on separate secured and unsecured limits.
Married couples filing together
A person with regular income and that person’s spouse could qualify based on combined debt below $2.75 million at filing.
Businesses with debt owed to related parties
Amounts owed to affiliates or insiders would not count toward the $7.5 million ceiling, although the debtor would still need to satisfy the bill’s other eligibility rules.
Who is affected by H.R. 7730?
Businesses above the $7.5 million ceiling
A business with more than $7.5 million in counted debt would not qualify for this small-business framework, even if most of that debt came from business activity.
Affiliated businesses in bankruptcy
Related debtors would be measured as a group. A member would be excluded when the group’s combined counted debt exceeds $7.5 million.
Public-reporting and single-asset real-estate businesses
Public-reporting corporations and their affiliates would remain excluded, as would businesses primarily devoted to owning a single real-estate asset.
People at or above the Chapter 13 cutoff
The Chapter 13 test would require debt below $2.75 million. A filer owing exactly $2.75 million—or more—would not qualify under this provision.
Bankruptcy courts, trustees, and creditors
They would apply the revised limits to newly filed cases and evaluate whether debt is counted, business-related, or owed to an affiliate or insider.
HR7730 Legislative Journey
Action Taken
Nov 5, 2026
Presented to President.
Action Taken
Oct 14, 2026
Message on Senate action sent to the House.
Passed
Sep 28, 2026
Passed Senate without amendment by Unanimous Consent. (consideration: CR S5123)
+1 more action this day
Sent to Senate
Sep 17, 2026
Received in the Senate, read twice.
House: Vote: 5939-5940
Sep 16, 2026
On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H5939-5940)
House: Committee Action
Aug 27, 2026
Reported (Amended) by the Committee on Judiciary. H. Rept. 119-783.
House: Vote Held
Mar 26, 2026
Ordered to be Reported (Amended) by Voice Vote.
House: Committee Action
Feb 26, 2026
Referred to the House Committee on the Judiciary.
About the Sponsor
Ben Cline
Republican, Virginia's 6th congressional district · 7 years in Congress
Committees: the Budget, the Judiciary, House Permanent Select Committee on Intelligence
View full profile →
Cosponsors (6)
This bill has 6 cosponsors: 3 Democrats, 3 Republicans, reflecting bipartisan support. Cosponsors represent 5 states: California, Colorado, Florida, and 2 more.
Committee Sponsors
Judiciary Committee
5 of 44 committee members cosponsored
22 Republicans across this committee haven't cosponsored yet. Mobilize their constituents
H.R. 7730 Quick Facts
- Committee
- Judiciary
- Chamber
- House
- Policy
- Finance and Financial Sector
- Introduced
- Feb 26, 2026
Presented to President.
Nov 5, 2026
Official Sources
Congress.gov provides the official legislative status, actions, text, and related information for the Bankruptcy Threshold Adjustment Act.
GovInfo provides the official enrolled bill text containing the revised bankruptcy debt limits and effective-date provision.
The federal judiciary explains Chapter 11 reorganization, including the framework within which small-business and Subchapter V cases operate.
The federal judiciary explains Chapter 13 eligibility and the court-supervised repayment-plan process affected by the bill's new debt threshold.
The federal judiciary's bankruptcy overview explains the general process and why eligibility does not itself forgive debt or guarantee plan approval.
The Department of Justice's U.S. Trustee Program provides official information about Subchapter V small-business bankruptcy cases and trustees.
H.R. 7730 Common Questions
What is the status of H.R. 7730?
H.R. 7730 has passed Congress and was presented to the President. It is not law yet; the President may sign or veto it.
What small-business bankruptcy limit would H.R. 7730 set?
The bill would set the ceiling at $7.5 million in counted secured and unsecured debt. A business at or below that amount would still need to meet the other eligibility rules.
How would business and insider debts be counted?
At least 50% of aggregate debt would need to come from business activity. Debts owed to affiliates or insiders would not count toward the $7.5 million ceiling.
What Chapter 13 debt limit would H.R. 7730 set?
A person with regular income would need less than $2.75 million in qualifying debt when filing. The same combined limit would apply to that person and a spouse.
Which businesses would remain excluded?
Public-reporting corporations and their affiliates, businesses primarily owning a single real-estate asset, and affiliated debtor groups above $7.5 million would remain excluded.
Can stockbrokers or commodity brokers use Chapter 13 under H.R. 7730?
No. The bill would continue to exclude stockbrokers and commodity brokers from Chapter 13, even if their debt were below $2.75 million.
Would H.R. 7730 change bankruptcy cases already underway?
No. If enacted, the revised limits would apply only to cases filed on or after the enactment date.
Would H.R. 7730 forgive anyone’s debt automatically?
No. The bill would change who may use particular bankruptcy processes. It would not automatically erase debt or guarantee that a repayment or reorganization plan is approved.
Based on H.R. 7730 bill text
H.R. 7730 Bill Text
“To amend title 11, United States Code, to modify certain bankruptcy eligibility requirements, and for other purposes.”
Source: U.S. Government Publishing Office
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