Press Releases

Rep. Ben Cline (VA-06), alongside Reps. Lou Correa (CA-46), Laurel Lee (FL-15), and Joe Neguse (CO-02), introduced the bipartisan Bankruptcy Threshold Adjustment Act of 2026. The legislation would permanently raise the small business reorganization threshold for Chapter 11 to $7.5 million, allowing more small businesses to access a faster, more cost-effective bankruptcy process while negotiating with creditors, keeping their doors open, employees on payroll, and suppliers paid. The bill also ensures the bankruptcy system remains self-supporting and that its costs are fairly borne by those who use it.

“The Bankruptcy Threshold Adjustment Act will give small businesses the certainty they need to reorganize, restructure, and keep operating when challenges arise,” said Rep. Cline. “By permanently raising the eligibility threshold, we’re ensuring more job creators can access a streamlined and affordable bankruptcy process that helps them stay open, protect paychecks, and meet their obligations. Just as importantly, this bipartisan bill maintains the integrity of our bankruptcy system by keeping it self-supporting and fair for all who rely on it.”

“Bankruptcy is a painful last result for struggling businesses, impacting the people and communities that rely on their services. This legislation would make a streamlined and more cost-effective process accessible to more businesses, enabling them to settle their debts and continue serving their customers,” said Rep. Correa. “With the heavy burdens that Main Street already faces in this economy, we need to give them opportunities to not only survive but thrive.”  

“When small businesses face financial distress, they should have a practical path to reorganize and continue operating. This legislation permanently restores the $7.5 million debt threshold so more small and family-owned businesses can access a streamlined restructuring process, preserve jobs, and continue serving their communities. I’m pleased to support this bipartisan effort to provide greater certainty for small businesses,” said Rep. Lee.

“When we enacted the Bankruptcy Threshold Adjustment Act in 2022, we responded to the economic and financial strain Americans faced in the wake of the Coronavirus pandemic. Since then, this legislation has protected our local entrepreneurs, small business owners, and family-owned shops,” said Rep. Neguse. “By making this change permanent, we can protect those in our communities confronting the ongoing cost-of-living crisis and continue to ensure sufficient support for our main street economies.”

BACKGROUND: This bill builds on Rep. Cline’s previous work on this issue. As a freshman in the 2019 class, he became the first member of his class to have legislation signed into law with the Small Business Reorganization Act, which established the Subchapter V reorganization process.

Congressman Ben Cline represents the Sixth Congressional District of Virginia. He previously was an attorney in private practice and served both as an assistant prosecutor and a Member of the Virginia House of Delegates. Cline and his wife, Elizabeth, live in Botetourt County with their two children.