Quick Answer
On November 10, 2026, the President signed the Bankruptcy Threshold Adjustment Act (H.R. 7730) into law (White House statement). For cases filed on or after that date:
- Chapter 13: an individual (or an individual and spouse) with regular income may file if their noncontingent, liquidated debts total less than $2,750,000. This one combined limit replaces the old separate caps of $526,700 unsecured and $1,580,125 secured.
- Subchapter V (small business Chapter 11): the limit rises from $3,424,000 to $7,500,000 for businesses, and individuals engaged in business, whose debts are at least 50% business-related.
The enacted text contains no expiration date. If you were told your debts were “too high” for either chapter, it may be worth a fresh look.
What Changed Under the Bankruptcy Threshold Adjustment Act?
| Before H.R. 7730 | Cases filed on or after Nov. 10, 2026 | |
| Chapter 13 secured debt | Under $1,580,125 | One combined limit: total noncontingent, liquidated debts under $2,750,000 |
| Chapter 13 unsecured debt | Under $526,700 | (same combined limit) |
| Subchapter V (small business Chapter 11) | $3,424,000 | $7,500,000 |
The “before” figures took effect April 1, 2025 under the periodic inflation adjustment (Federal Register notice). Similar higher limits were in place temporarily but expired in 2024, according to the Congressional Research Service summary on Congress.gov.
Chapter 13: One Combined $2.75 Million Limit
Chapter 13 lets an individual keep property and repay creditors through a three- to five-year court-approved plan. It is often used to stop a foreclosure or sheriff sale and catch up on mortgage arrears over time. Until now, its debt ceiling was split in two, and going over either the secured or the unsecured cap could rule you out. Under the new 11 U.S.C. § 109(e), secured and unsecured debts are simply added together. Stockbrokers and commodity brokers remain ineligible. See our Chapter 13 Bankruptcy and Mortgage Relief pages.
Hypothetical example 1: South Jersey homeowner behind on the mortgage
Hypothetical, for illustration only. A couple in Camden County owes $1,700,000 on their home and a rental property and $150,000 on credit cards. Their secured debt was over the old $1,580,125 cap. Their $1,850,000 total is under $2,750,000, so they may now be eligible, if they have regular income and meet the other requirements.
Hypothetical example 2: Philadelphia owner with a personal guarantee
Hypothetical, for illustration only. A Philadelphia restaurant owner guaranteed a $650,000 business loan now in default and owes $400,000 on a home mortgage. The guaranty put the owner over the old $526,700 unsecured cap. With a total of about $1,050,000, the owner may now fit within Chapter 13.
Subchapter V: Small Business Limit Rises to $7.5 Million
Subchapter V is a streamlined form of Chapter 11 that lets a business keep operating while it restructures. Under the new 11 U.S.C. § 1182(1), it is open to a person engaged in commercial or business activities with total noncontingent, liquidated debts of not more than $7,500,000, at least 50% from business activities. Debts owed to affiliates or insiders are not counted. Businesses whose main activity is owning single asset real estate, and SEC-reporting companies and their affiliates, are excluded.
Compared with a traditional Chapter 11, there is generally no creditors’ committee unless the court orders one, only the debtor may file a plan (generally within 90 days), no U.S. Trustee quarterly fees are owed, and owners can often keep their ownership if the plan meets the legal requirements. See our Business Bankruptcy page.
Hypothetical example 3: South Jersey contractor
Hypothetical, for illustration only. A Gloucester County contracting company owes $4,600,000 to its bank, equipment lessors and suppliers. That was above the old $3,424,000 limit, leaving only a traditional Chapter 11. Now it may qualify for Subchapter V.
Whether a debt counts as “noncontingent” and “liquidated” (for example, a guaranty or a disputed claim) depends on the facts.
How Chapter 7 Compares
Chapter 7 has no debt limit. A trustee may sell non-exempt property, and individuals can receive a discharge of most qualifying debts. Individuals whose debts are primarily consumer debts must pass the means test. The right chapter depends on your income, property, goals and type of debt.
What This Means in New Jersey and Pennsylvania
The new limits are federal, so they apply the same way in the U.S. Bankruptcy Court for the District of New Jersey and the Eastern District of Pennsylvania. Local practice, trustees and available property exemptions differ. Kasen Law Group, P.C. represents individuals and businesses in New Jersey, Pennsylvania, Delaware and Florida, by appointment.
Steps to Take Now
- List every personal and business debt, including guarantees, taxes and insider loans.
- Note any deadlines, such as a sheriff sale, foreclosure hearing, levy or garnishment.
- Individuals must complete credit counseling with an approved provider before filing.
- Speak with a bankruptcy attorney. The new limits apply only to cases filed on or after November 10, 2026.
Frequently Asked Questions
What is the new Chapter 13 debt limit?
For cases filed on or after November 10, 2026, an individual (or an individual and spouse) with regular income may file Chapter 13 if their noncontingent, liquidated debts total less than $2,750,000. Secured and unsecured debts are counted together.
What is the new Subchapter V debt limit?
$7,500,000 in total noncontingent, liquidated debts, excluding debts owed to affiliates or insiders, with at least 50% arising from business activities. It applies to cases filed on or after November 10, 2026.
When did the Bankruptcy Threshold Adjustment Act take effect?
The President signed H.R. 7730 on November 10, 2026. Both new limits apply to cases filed on or after the date of enactment.
Do the new limits expire?
The enacted text contains no sunset date. Earlier temporary increases expired in 2024.
Do personal guarantees count toward the limits?
They can, if the guaranty is noncontingent and liquidated, which often depends on whether the business has defaulted and whether the amount is fixed. Guaranties of business loans are often treated as business debt for the Subchapter V 50% test. This is fact-specific.
Can Chapter 13 or Subchapter V stop a foreclosure or sheriff sale in New Jersey?
Filing a bankruptcy case generally triggers the automatic stay, which pauses most collection actions, including foreclosure sales. A Chapter 13 or Subchapter V plan can then provide for curing arrears over time.
Should I choose Chapter 13, Subchapter V or Chapter 7?
No chapter is best for everyone. Chapter 13 is for individuals only; Subchapter V is for businesses and individuals engaged in business; Chapter 7 has no debt limit. A consultation can help you compare your options.
Schedule a Consultation
If you are in Cherry Hill, South Jersey, Philadelphia or elsewhere in New Jersey, Pennsylvania, Delaware or Florida and want to know whether the new limits open the door to Chapter 13 or Subchapter V for you or your business, call Kasen Law Group, P.C. at (888) 959-8220, email [email protected], or use our contact page to schedule a consultation. If a foreclosure sale or other deadline is coming up, please mention it when you reach out.
Sources
- The White House, Congressional Bills H.R. 997, H.R. 1703, H.R. 1945, and H.R. 7730 Signed into Law (Nov. 10, 2026)
- S. Government Publishing Office, H.R. 7730 Enrolled Bill text
- gov, H.R. 7730, Bankruptcy Threshold Adjustment Act
- Federal Register, Revision of Certain Dollar Amounts in the Bankruptcy Code (effective April 1, 2025)
- S. Courts, Chapter 13 Bankruptcy Basics
Disclaimer
ATTORNEY ADVERTISING. This article is for informational purposes and is not legal advice. Reading it or contacting us does not create an attorney-client relationship. Every situation is different, and the outcome of any matter depends on its own facts. Jenny R. Kasen, Esquire, Kasen Law Group, P.C., Cherry Hill, New Jersey, is responsible for this content. Jenny R. Kasen is admitted in New Jersey, Pennsylvania, Delaware and Florida. Jenny R. Kasen is Certified by the American Board of Certification, an organization accredited by the American Bar Association. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.