Biden signs Grassley-led bankruptcy bill into law

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WASHINGTON- President Joe Biden today signed a bipartisan bill authored by Sen. Chuck Grassley (R-Iowa) to help small businesses and individuals stay afloat during bankruptcy. the Bankruptcy Threshold Adjustment Law and Technical Corrections (S3823) becomes law at a time when Americans are battling 40-year high inflation, rising interest rates and fears of an impending recession. As ranking member of the Judiciary Committee, Grassley teamed up with Sens. Sheldon Whitehouse (DR.I.), Dick Durbin (D-Ill.) and John Cornyn (R-Texas) to promote the bill, which passed unanimously in the Senate and approved in the House of Representatives with an overwhelmingly bipartisan vote of 392-21.

“As American families and small businesses face growing economic uncertainty amid historic inflation and rising interest rates, it is more important than ever that we remove obstacles to reorganization when people are going through tough times. Our bipartisan bill, now law, is based on my Small Business Reorganization Act of 2019with Senator Whitehouse to streamline the bankruptcy process for small businesses by eliminating onerous paperwork requirements designed for large corporations,”
grassley said.

“The bankruptcy process should help small businesses and working families overcome financial difficulties and come out stronger. This new law will help them do that. I am pleased to see President Biden sign on to this bipartisan effort. He was pleased to work with Senators Grassley, Durbin, and Cornyn to improve our bankruptcy process,” white house said.

“Too many mom-and-pop stores are stuck in a complicated bankruptcy system as they work to get back on their feet. At the same time, many families are struggling with overwhelming levels of debt. This bipartisan bill provides relief for both. I thank my Senate colleagues for their collaboration on this critical legislation, and I applaud President Biden for moving quickly to sign it into law, a testament to the commitment of this Congress and this Administration to support American businesses and families.” Durbin said.

“For small businesses and families who made their way through the pandemic and are now facing financial hardship, our complicated bankruptcy process can be another barrier to survival. I’m glad we can join in this relief from onerous requirements, especially given record inflation and rising interest rates.” Cornyn said.

Whitehouse and Grassley passed the Small Business Reorganization Act in 2019 to establish streamlined bankruptcy procedures to help small business owners keep their businesses afloat and preserve jobs. The CARES Act of 2020 temporarily allowed more small businesses to qualify for those streamlined procedures by raising 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 Law and Technical Corrections, 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 people to qualify for Chapter 13 bankruptcy for two years, allowing more people a chance to try to save their homes from foreclosure.

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