WASHINGTON – President Joe Biden today
signed
into law a bipartisan bill authored by Sen. Chuck Grassley (R-Iowa) to help
small businesses and individuals stay afloat during bankruptcy. The
Bankruptcy
Threshold Adjustment and Technical Corrections Act (
S.
3823) becomes law at a time when Americans are battling 40-year
high inflation, rising interest rates and fears of a looming recession. As
Judiciary Committee’s ranking member, Grassley partnered with Sens. Sheldon
Whitehouse (D-R.I.), Dick Durbin (D-Ill.) and John Cornyn (R-Texas) to advance
the bill, which unanimously cleared the Senate and passed in the House of Representatives
with an overwhelmingly bipartisan vote of 392-21.
“As
American families and small businesses face
mounting economic uncertainty amid historic inflation and spiking interest
rates, it’s more important than ever that we remove hurdles to reorganizing when
folks fall on hard times. Our bipartisan bill – now law – builds on my Small Business Reorganization Act in 2019
with Sen. Whitehouse to streamline the bankruptcy process for small businesses
by eliminating onerous paperwork requirements designed for major corporations,”
Grassley said.
“The
bankruptcy process should assist small businesses and working families to
weather financial hardship and emerge stronger. This new law will help them do
that. I’m gratified to see President Biden sign this bipartisan effort. I was
pleased to work with Senators Grassley, Durbin, and Cornyn to improve our
bankruptcy process,” Whitehouse said.
“Too
many mom-and-pop shops are getting caught up in a complicated bankruptcy system
while working to get back on their feet. At the same time, many families are
struggling with overwhelming levels of debt. This bipartisan bill brings relief
to both. I’m grateful to my Senate colleagues for their partnership on this
critical legislation, and applaud President Biden for acting swiftly to sign
this into law—a testament to this Congress’s, and this Administration’s,
commitment to supporting American businesses and families,” Durbin said.
“For small businesses and families who fought their
way through the pandemic and are now facing economic hardship, our complicated
bankruptcy process can be another barrier to survival. I’m glad we could come
together on this reprieve from burdensome requirements, especially given
record-high inflation and rising interest rates,” Cornyn said.
Whitehouse
and Grassley passed the
Small
Business Reorganization Act in 2019 to establish streamlined
bankruptcy procedures that help small business owners keep their companies
afloat and preserve jobs. The CARES Act of 2020 temporarily allowed more small
businesses to qualify for those streamlined procedures by increasing the upper
debt limit for small businesses from $2.7 million to $7.5 million. That
increase expired on March 27, 2022.
The Bankruptcy
Threshold Adjustment and Technical Corrections Act, which is now law, provides
a two-year extension to the CARES Act increase to $7.5 million, and makes minor
technical fixes to the Small Business Reorganization Act. It also increases the
debt limit for individuals to qualify for Chapter 13 bankruptcy for two years,
allowing more individuals the opportunity to try to save their homes from
foreclosure.
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