Tag: Government

The threshold for Subchapter V bankruptcy could permanently rise under a new bill introduced by Virginia Congressman Ben Cline. The Bankruptcy Threshold Adjustment Act of 2026 would raise the threshold from $3 million to $7.5 million, effectively allowing more businesses to file via a faster, cost-effective route to bankruptcy.

December in Washington is dominated by last-minute negotiations on an array of must-pass bills Congress still needs to act on. Top of the list is the National Defense Authorization Act (NDAA), which funds the nation’s nearly $1 trillion annual defense budget. While predominantly focused on defense, the NDAA has become a Christmas tree for non-defense related legislation to ride along, and this year is no exception.

After a more than 40-day government shutdown, a small group of Senate Democrats gave Republicans the votes they needed to end the shutdown without a vote on expiring Affordable Care Act subsidies. Let’s look at what they did get.

Recent comments from Treasury Secretary Scott Bessent and the White House hint at plans to pause the new regulations introduced earlier this year with the Affiliates Rule, or the 50% Rule, amid ongoing talks with China.

Anyone who has turned on the news in the past two weeks likely knows that Republican and Democratic leaders have been unable to reach an agreement on government funding as the now three-week government shutdown continues. Democrats are refusing to pass a ‘clean’ funding bill, demanding an extension of the expiring Obamacare tax credits, and Republicans are holding firm despite public polling in support of the subsidies sitting at over 70%. They argue that Congress has plenty of time to extend the subsidies.

The Senate introduced an amendment to raise the debt limit for Subchapter V bankruptcy filings from $3 million to $7.5 million. Subchapter V of Chapter 11 of the U.S. Bankruptcy Code offers small businesses an alternative to filing for a traditional bankruptcy that is more expedited and cost-efficient but shifts some of these burdens onto credit managers. 

In a rare bankruptcy-focused hearing in the House on July 15th, Members of Congress demonstrated a surprising level of interest in the topic, discussing an array of six or seven potential changes to bankruptcy code, but not quite achieving consensus yet. One proposal that, on the surface, received wide bipartisan support was restoration of the COVID-era Subchapter V $7.5 million debt eligibility ceiling. Looking more deeply, however, it is a little too early to call it a done deal.

President Trump’s “One, Big, Beautiful Bill” signed into law on July 4th. Since then, Democrats have focused on its potential impact, warning that it could reduce access to health care and food assistance for many Americans—a message that has dominated the news cycle. Many of the cuts don’t start going into effect until the end of 2026, after the midterm election.

This past Friday, President Trump released his 2026 budget outline, proposing the largest cuts to non-defense spending in decades and zeroing out dozens of programs across the federal government. In line with much of what the President has already done in his first 100 days, the cuts are deep enough to alarm not just Democrats, but moderate Republicans as well, and time will tell if the proposal will get any real consideration by Congress.