📅 2026 Update: Key Changes in U.S. Bankruptcy Law

Since the original article was published, there have been important changes in U.S. bankruptcy law affecting debt restructuring. These include new laws on debt limits and filing fees. The previous details in the article still apply, but the updates below provide current information.

🏛️ Changes in Debt Limits

The Bankruptcy Threshold Adjustment and Technical Corrections Act (BTATC Act) expired on June 21, 2024. This caused the debt limit for Subchapter V of Chapter 11 to drop from $7.5 million to $3,024,725. For Chapter 13 cases, the maximum unsecured debt is now $465,275, and secured debt is $1,395,875.

These changes affect eligibility criteria for many individuals and businesses seeking bankruptcy relief.

💰 Updated Filing Fees

As of 2026, the filing fees for bankruptcy have changed. Chapter 7 now costs $338, Chapter 13 costs $313, and Chapter 11 costs $1,738. These fees can impact the decision-making process for those considering bankruptcy.

🧑‍⚖️ Trustee Compensation Changes

The Bankruptcy Administration Improvement Act of 2025, enacted on February 6, 2026, increased the compensation for trustees in Chapter 7 cases. This law also extended quarterly fees for Chapter 11 cases for another five years. These changes may affect how bankruptcy cases are handled and the overall costs involved.

📅 Processing Times

Processing times for various bankruptcy types remain consistent. Chapter 7 typically takes 3 to 6 months from filing to discharge, while Chapter 13 can take 3 to 5 years. Chapter 11 cases vary widely and may take several months to years, depending on complexity.

📌 Summary of Key Changes

  • 🏛️ New debt limits for Subchapter V and Chapter 13.
  • 💰 Filing fees updated for all bankruptcy types.
  • 🧑‍⚖️ Increased trustee compensation under new laws.
  • 📅 Processing times remain similar to previous years.

💡 Practical Tips for Debt Restructuring

Reviewing your situation with an attorney is crucial for understanding your options.

📋 Understand Eligibility Requirements

Know the eligibility requirements for the type of bankruptcy you are considering. Chapter 7 requires passing a means test based on your income compared to the state median.

💵 Prepare for Filing Fees

Make sure to budget for the filing fees associated with your chosen bankruptcy type. Chapter 7 costs $338, Chapter 13 costs $313, and Chapter 11 costs $1,738.

📅 Complete Required Courses

Both credit counseling and debtor education are mandatory before and after filing. These courses cost between $20 and $100 each and are essential for successful bankruptcy processing.

🏦 Keep Good Records

Maintain accurate records of your debts and income. Clear documentation helps during the bankruptcy process, especially when preparing your petition.

🗓️ Monitor Processing Times

Be aware of the typical processing times for your chosen bankruptcy type. Knowing how long it usually takes can help you plan your financial future.

🏆 Credit Repair Services Ranked by User Reviews (2026)

This section reviews services related to credit repair and debt management. These services are relevant to individuals considering bankruptcy. The rankings are based on Trustpilot data from October 2026.

Scores can change, and unhappy customers often share their experiences.

🥇 1. CreditRepair.com

CreditRepair.com holds a Trustpilot score of 1.2. This service is known for offering credit repair and debt management solutions. However, many reviewers report negative experiences, particularly regarding customer service.

🥈 2. Lexington Law

Lexington Law has a Trustpilot score of 3.2. It provides credit repair services and debt management. While some users find the service helpful, others mention mixed experiences and customer service issues.

🆓 Free Government and Nonprofit Help

Several organizations provide free or low-cost assistance. Legal aid organizations offer support to eligible individuals. The U.S.

Trustee Program provides resources about bankruptcy procedures. Approved credit counseling agencies also offer required counseling services.

🔎 Considerations When Choosing Services

  • 💰 Compare costs of services offered.
  • 📊 Review customer feedback and ratings.
  • 🕒 Check the processing times for services.
  • 📞 Assess the quality of customer support.

❓ Frequently Asked Questions

❓ What is the means test for Chapter 7 bankruptcy?

The means test determines eligibility for Chapter 7 bankruptcy. It compares your income to the state median income and assesses your disposable income.

❓ How long does a Chapter 13 plan last?

A Chapter 13 repayment plan typically lasts 3 to 5 years. The specific duration depends on your income and the amount of debt.

❓ What happens if creditors object to discharge?

Creditors have 60 days after the 341 meeting to file objections to discharge. If they succeed, it may affect the outcome of your bankruptcy case.

❓ What is the homestead exemption cap?

The homestead exemption cap is set at $214,000 for homes purchased within 1,215 days before filing. This limits the amount of equity protected in bankruptcy.

❓ Can I file for bankruptcy multiple times?

Yes, individuals can file for bankruptcy multiple times. However, there are specific time limits between filings depending on the type of bankruptcy.

❓ What is the role of a trustee in bankruptcy?

A trustee manages the bankruptcy case, reviews the debtor’s filings, and oversees the distribution of assets to creditors. Their role is vital in ensuring the bankruptcy process is fair.

⚖️ Recent Court Rulings on Bankruptcy Cases

Recent court rulings continue to shape bankruptcy law and its application. These rulings often address eligibility, discharge, and trustee responsibilities.

For more insights, feel free to browse more rulings on the news page.

End of October 2026 Update





Sometimes, when a corporation is facing a large amount of debt, restructuring the entire operation is in order, whether this is manifested by closing branches of the company, merging departments, or selling the rights to the company outright. On other occasions, meanwhile, and for businesses and personal debtors alike, it is restructuring debt itself that is on the agenda. As tends to be the case with the various alternatives to bankruptcy, debt restructuring is similar to other options.

Of course, debt restructuring would not be worthy of mention were it not of worth to the individual debtor. The benefits to parties unable to make payments on their loans in restructuring debt is clear, for as with debt negotiation/settlement, the changes are numerically based and thereby tangible.

Nonetheless, while negotiation is a solution that would see debts eliminated by virtue of the creditor's agreement to accept a reduced rate of compensation on their original loan, with debt restructuring, the overall principal of the loan is usually not diminished. Instead, certain parameters within the loan are changed, namely the rate of interest to be paid (which is made lower, in addition to the original sum borrowed), as well as the time over which the loan is expected to be paid (which is longer), making for less money owed per month. 

All You Need to Know About Debt Restructuring

As settlements with creditors will work more immediately and will more drastically decrease a person's debt, it may not be immediately understood why anyone would opt for restructuring debt over negotiating with creditors or filing for bankruptcy. After all, some applicants for this remedy may ultimately still not be able to handle the demands of creditors, despite the greater flexibility they are afforded.

That said, debt restructuring is certainly less expensive than bankruptcy proceedings. In addition, restructuring debt is less likely to do serious damage to one's credit rating than settlements or bankruptcy would. Thus, people who make use of this method may lose in the short term, but win in the end depending on their circumstances.

Imaginably, there are variations on debt restructuring that take into account a mix of debt reduction strategies. Especially for companies with a lot of financial value and shares to be issued as assets, restructuring debt may be supplemented in part or to a large extent by what is known as a "debt-for-equity" swap, where lenders would come to be stakeholders in the business trying to stay afloat.