The purpose of the Bankruptcy Threshold Adjustment Act of 2026 is to update the eligibility requirements for individuals and businesses seeking bankruptcy protection. This legislation aims to make it easier for small businesses and individuals with significant debts to access bankruptcy relief. One of the key provisions of the Act is the increase in the debt limit for small businesses filing for bankruptcy. Previously, small businesses could only have debts up to $2,725,625 to qualify for certain bankruptcy protections.