By StartBusinessByStatePublisher: Robert SmithResearch process
ABI/Epiq · Judicial Conference · SBA 7(a) FOIA · Published Sep 18, 2026 · Last updated Oct 2, 2026 · Passed both chambers, awaiting signature: not current law yet (H.R.7730)
Congress has moved to restore a permanent $7.5 million Subchapter V debt ceiling — but it is not law yet. Under current law, the operative small-business / Subchapter V debt limit is $3,424,000 (Judicial Conference CPI adjustment effective April 1, 2025, after the CARES/BTATCA $7.5 million temporary ceiling expired June 21, 2024). The Senate passed S.3977 on August 3, 2026; the House passed companion H.R.7730 on September 16, 2026, and the Senate passed that same House bill without changes on September 28, 2026. Both chambers have now approved identical text. As of October 2, 2026, Congress.gov lists no presidential signature, so the higher limit does not apply yet. Once signed, it would apply only to cases filed on or after the signing date. Meanwhile, ABI/Epiq report 1,663 Subchapter V elections in H1 2026 — +50% year-over-year. This page leads with the statutory debt-limit change; it is not a redo of survival rates and is not legal advice.
Three findings reporters can use
- Observed (current law): After BTATCA’s $7.5 million Subchapter V debt-limit provision sunset on June 21, 2024, eligibility reverted to the small-business-debtor definition. The Judicial Conference’s April 1, 2025 adjustment set 11 U.S.C. §101(51D) at $3,424,000 (from $3,024,725). FR Doc. 2025-02207 notes there is no standalone dollar currently printed in §1182(1).
- Observed (legislative status — not enacted): S.3977 passed the Senate by unanimous consent (Aug 3, 2026). H.R.7730 passed the House by voice vote (Sep 16, 2026) and then passed the Senate without amendment by unanimous consent (Sep 28, 2026). Both propose restoring a $7,500,000 Subchapter V ceiling. Both chambers have now passed the same text (H.R.7730); it still needs the President’s signature before it becomes law. Label: proposed / pending — not “restored” as law.
- Observed national filings vs loan-size proxy: ABI/Epiq: 1,663 Subchapter V elections in H1 2026 vs 1,107 in H1 2025 (+50%). ABI does not publish site-NAICS Subchapter V counts in the cited release — we do not invent industry filing shares. Separately, among site-industry SBA 7(a) approvals FY2021–FY2025 (FOIA as of 2026-06-30), 319 of 21,658 (1.47% of count; 16.7% of dollars) had GrossApproval ≥ $3.424M — a loan-size proxy near the current ceiling neighborhood, not a debtor list.
Distinct from survival / charge-off magnets. Companion pages cover business survival rates by state, SBA loan statistics, and SBA $3M GrossApproval size bands. This study is about the Subchapter V statutory ceiling.
Bill status verified (as of 2026-10-02 ET)
| Instrument | Chamber action | Proposed Sub V ceiling | Primary link |
|---|---|---|---|
| S.3977 — Bankruptcy Threshold Adjustment Act of 2026 | Passed Senate without amendment by Unanimous Consent (2026-08-03); Received in House / Held at the desk (2026-08-10) | $7,500,000 | Congress.gov · Engrossed text |
| H.R.7730 — Bankruptcy Threshold Adjustment Act | Passed House by voice vote (2026-09-16); received in the Senate (2026-09-17); passed Senate without amendment by Unanimous Consent (2026-09-28) | $7,500,000 | Congress.gov · Engrossed text |
| Reconciliation / enrollment | Resolved: the Senate passed the House bill, H.R.7730, without changes on 2026-09-28, so both chambers approved identical text. Next step: the bill goes to the President to sign. No signature shown as of 2026-10-02. | — | Congress.gov actions · Reuters 2026-09-17 |
Observed. We first verified chamber status on Congress.gov on 2026-09-18 and re-checked it on 2026-10-02. We do not claim the President has signed a public law restoring the ceiling.
Current vs proposed debt limits
| Milestone | Ceiling | Authority |
|---|---|---|
| CARES / BTATCA temporary expansion | $7,500,000 | CARES Act; BTATCA (Pub. L. 117-151) — sunset June 21, 2024 |
| Day after sunset (Jun 22, 2024) | $3,024,725 | Reversion to inflation-adjusted small-business-debtor limit (court notices; FR footnote) |
| Current law (cases on/after Apr 1, 2025) | $3,424,000 | FR 2025-02207 adjusting §101(51D) |
| Proposed in H.R.7730 / S.3977 | $7,500,000 | Passed both chambers (H.R.7730, Sep 28, 2026); awaiting signature, not law yet |
| Gap (proposed − current) | ≈ $4.076 million | Debt capacity that would newly sit under Sub V if the bills are enacted as written |
ABI / Epiq national Subchapter V filing trends
National series only — cite ABI partnership with Epiq AACER. No state×NAICS Subchapter V cross-tab appears in the cited H1 2026 release.
| Period | Metric | Value | YoY |
|---|---|---|---|
| H1 2026 | Subchapter V elections | 1,663 | +50% vs 1,107 |
| August 2026 | Subchapter V elections | 302 | +63% vs 185 |
| July 2026 | Subchapter V elections | 236 | August was +28% vs July |
| June 2026 | Subchapter V elections | 258 | +28% vs 202 |
| H1 2026 | Commercial chapter 11 filings | 4,589 | +28% |
| H1 2026 | All commercial filings | 17,285 | +13% |
| 2023 (ABI via Reuters) | Subchapter V share of chapter 11 | 44% | — |
| Jan 2024 – Aug 2026 (Epiq via Reuters) | Cumulative Subchapter V filings | >6,600 | Monthly +89.9% over span |
Source: ABI — Small Business Filings Increase 50% Year-Over-Year in First Half of 2026 (July 8, 2026). August and July 2026 rows: Epiq AACER, August Small Business Filings Increase 63% Year Over Year (Sept. 4, 2026).
Scenario: who sits near the old vs proposed ceiling?
| Band | Aggregate debt range | Under current law | If $7.5M bills enacted |
|---|---|---|---|
| A | $0 – $3,424,000 | May elect Subchapter V if otherwise eligible | Still within proposed ceiling |
| B | $3,424,001 – $7,500,000 | Generally outside Sub V (traditional chapter 11 if filing) | Newly within proposed permanent Sub V ceiling |
| C | > $7,500,000 | Outside Sub V | Still outside Sub V |
For service-business distress context (not causation): see survival rates by state, sole-prop profit, partnership profit, and ABS credit access.
PROXY: SBA GrossApproval near the current ceiling
GrossApproval is the approved 7(a) loan amount, not a firm’s aggregate noncontingent, liquidated secured+unsecured debt under the Bankruptcy Code. These rows are not Subchapter V debtors and not industry filing shares. Typical 7(a) caps near $5 million, so FOIA also cannot measure the full $3.424M–$7.5M bankruptcy-debt gap.Universe: site-NAICS 7(a) approvals, complete FY2021–FY2025, FOIA as of 2026-06-30, cancelled excluded. 319 / 21,658 approvals (1.47% of count; 16.68% of dollars) had GrossApproval ≥ $3,424,000.
| GrossApproval band | Approvals | Share of count | $ sum | Share of $ |
|---|---|---|---|---|
| <$1M GrossApproval | 19,571 | 90.36% | $3885.53M | 46.65% |
| $1M–<$3.424M GrossApproval | 1,768 | 8.16% | $3054.36M | 36.67% |
| $3.424M–<$5M GrossApproval | 239 | 1.1% | $989.77M | 11.88% |
| ≥$5M GrossApproval | 80 | 0.37% | $400.00M | 4.8% |
| Industry | All FY21–25 approvals | ≥ $3.424M | Share | $ sum (≥ ceiling) |
|---|---|---|---|---|
| Child day care services | 3,748 | 187 | 4.99% | $832.35M |
| Plumbing & HVAC contractors | 4,607 | 88 | 1.91% | $375.96M |
| Landscaping services | 4,521 | 28 | 0.62% | $111.93M |
| Janitorial / cleaning | 2,243 | 8 | 0.36% | $32.82M |
| Beauty / personal care (salon, barber, nail) | 5,489 | 7 | 0.13% | $31.71M |
| Mobile food services | 1,050 | 1 | 0.1% | $5.00M |
Related size-band companion (SOP Oct 1 context, different threshold): SBA $3M loan size-band by state.
Charts
Related research on StartBusinessByState
- Business survival rates by state — establishment survival context (not bankruptcy elections)
- SBA loan statistics — FOIA volume and charge-off companions
- SBA loans, jobs, and lenders by state
- SBA $3M GrossApproval size-band — SOP Oct 1 size-band proxy
- Sole proprietor profit by state · Partnership profit by state
- Small-business credit access (ABS)
- Business formation statistics
Methodology and limits
Observed vs proposed vs proxy
Observed: Congress.gov bill status; FR 2025-02207 dollar chart for §101(51D); ABI/Epiq national filing totals; engrossed bill text proposing $7,500,000.
Proposed / pending: Restoration of the $7.5M ceiling until the President signs H.R.7730, which passed both chambers as of Sep 28, 2026.
Proxy: SBA FOIA GrossApproval bands for site NAICS — credit-size context only.
Primary sources
- H.R.7730 · S.3977
- FR 2025-02207
- ABI H1 2026 small-business filings
- Reuters 2026-09-17
- SBA 7(a) FOIA (as of 2026-06-30)
What this page does / does not claim
- Do not say the $7.5M ceiling is “restored” as current law until a signed public law exists.
- Do not invent Subchapter V filing counts by NAICS or state from ABI national totals.
- GrossApproval ≠ Bankruptcy Code aggregate debt; proxy tables are not debtor lists.
- Not legal, tax, or restructuring advice. Consult counsel for eligibility.
- Distinct from survival-rate and SBA charge-off page intents.
Download
- Debt-limit timeline (CSV)
- ABI/Epiq national filing extracts (CSV)
- Statutory eligibility bands (CSV)
- SBA GrossApproval proxy bands overall (CSV)
- SBA proxy ≥ $3.424M by industry (CSV)
Suggested citation: StartBusinessByState.com — Restoring the $7.5M Subchapter V Debt Ceiling (Pending). https://startbusinessbystate.com/subchapter-v-debt-limit-restoration/. Please credit and link to this page when using our compilation or analysis, and retain the original-source credits and applicable reuse terms.