The âBankruptcy Threshold Adjustment Act of 2026,â introduced by Charles Grassley and others, aims to permanently raise debt limits for Subchapter V ($7.5M) and Chapter 13 ($2.75M) filings. It builds on temporary COVID-era increases under the CARES Act, which expired in 2024, amid rising small business financial stress and increased filings. With bipartisan support in both chambers, the bill has strong prospects, aiming to expand access to streamlined bankruptcy relief for small businesses and individuals.
Conversion of a Chapter 7 case to Chapter 11 does not violate the Thirteenth Amendment to the U.S. Constitution or create peonage because there is no legal compulsion to work. Courts emphasize that involuntary servitude requires coercion, and debtors retain the choice to work or not, even if consequences are unfavorable. In In re Gordon, the court rejected arguments that conversion forces debt repayment through labor, calling such concerns speculative. Ultimately, bankruptcy relief is conditionalâdebtors are not forced into servitude but must meet statutory requirements to obtain a discharge.
The article argues that forcing an individual debtor into Chapter 11 violates the Thirteenth Amendment to the U.S. Constitution because it effectively compels them to work and dedicate post-petition wages to creditors. Historically, reorganization chapters like Chapter 13 were strictly voluntary to avoid concerns of involuntary servitude, as recognized in cases such as Toibb v. Radloff. However, changes under BAPCPA extended Chapter 13âlike requirements to Chapter 11, including making future earnings part of the estate, without preserving the debtorâs right to exit the case. As a result, involuntary Chapter 11 cases can trap debtors into repaying creditors through forced labor, which the author contends is unconstitutional.
The column reflects on meaningful âmomentsâ in everyday lifeâespecially unexpected human interactionsâand how taking a pause can lead to profound emotional connections and lasting memories. The author shares personal experiences, including encounters tied to his role as a judge and a deeply moving story about reconnecting with someone linked to his late son. It concludes with gratitude for his tenure as ABI President, encouragement to appreciate small moments, and a brief reflection on astronomy and finding wonder in the night sky.
Bankruptcy courts treat an âemergencyâ as a narrowly defined concept based on immediacy, necessity and credible risk of irreparable harmânot merely urgency asserted by counselâoften guided by standards similar to Federal Rules of Civil Procedure Rule 65. Courts require specific evidence, proper documentation and procedural compliance before granting expedited relief, and overusing emergency motions can damage an attorneyâs credibility, invite stricter scrutiny and delay outcomes. Ultimately, effective emergency practice demands restraint, preparation and ethical disciplineâensuring that only genuine, well-supported exigencies justify disrupting normal court procedures.