Washington, DC – Senators Sheldon Whitehouse (D-RI), Dick Durbin (D-IL), Chuck Grassley (R-IA), and John Cornyn (R-TX) applauded passage of their bipartisan legislation to help small businesses and individuals stay afloat during bankruptcy in the House of Representatives last night. The bill passed unanimously in the Senate and now heads to President Biden’s desk to be signed into law.
“This is a win for the small businesses and working families trying to regain their financial footing after a difficult few years,” said Whitehouse. “We need to do everything we can to help Americans recover from the pandemic and the economic turmoil it triggered. That’s why I’m glad our bipartisan bill will soon be the law of the land.”
“Small businesses that fall on hard times should not face a mountain of paperwork designed for major corporations in order to reorganize and continue operating.? Senator Whitehouse and I passed the Small Business Reorganization Act in 2019 to streamline and eliminate barriers in the bankruptcy process for small businesses.? In a broadly bipartisan manner, Congress has acted to build on the success of this policy to help more small businesses stay afloat – especially in the face of challenging economic headwinds,” Grassley said.
“American families and small businesses facing economic hardship need Congress’s help,” said Durbin. “Our bipartisan legislation will provide small businesses and families with more flexibility to navigate the bankruptcy system and get back on their feet. I look forward to President Biden signing the bill into law as soon as possible so they can have the tools they need to be successful. ”
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 legislation 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. This increase addresses the concern that rising home prices and exploding student loan debt will push increasing numbers of individuals over the debt limit to qualify for Chapter 13 bankruptcy.
Rich Davidson (202) 228-6291 (press office)
