Senate Bill Increasing Chapter 11 and 13 Debt Ceilings Moves to House

The Senate yesterday swiftly passed the amended S.3823, the “Bankruptcy Threshold Adjustment and Technical Corrections Act," via unanimous consent. Sen. Charles Grassley (R-Iowa) had recently introduced the legislative substitute to raise the debt limit back to $7.5 million for small businesses electing to file for bankruptcy under subchapter V of chapter 11. Consistent with the recommendations of ABI’s Commission on Consumer Bankruptcy, the substitute also raises the debt limit for individual chapter 13 filings to $2.75 million and removes the distinction between secured and unsecured debt for that calculation. All provisions of the legislation will sunset two years after enactment. The legislation now moves to the House of Representatives for consideration.