Bankruptcy Threshold Adjustment Act

SI-generated grade · five published checks · not individually reviewed by a person · methodology

The Bankruptcy Threshold Adjustment Act is a constitutional exercise of Congress's enumerated power to establish uniform laws on the subject of bankruptcies. It adjusts eligibility thresholds for existing bankruptcy chapters, does not infringe on any constitutional rights, and appropriately centralizes bankruptcy law at the federal level as required by the Constitution. The changes are procedural and economic, with no due process or takings concerns.

• ✓ Passes · Enumerated powers
  Article I, Section 8, Clause 4 grants Congress the power 'To establish... uniform Laws on the Subject of Bankruptcies throughout the United States.' This bill directly amends the Bankruptcy Code, which is squarely within that enumerated power. Adjusting debt limits for Subchapter V and Chapter 13 is a permissible exercise of this authority.
• ✓ Passes · Bill of Rights
  The bill does not implicate any of the first ten amendments. It does not affect speech, religion, assembly, press, petition, arms, quartering, search and seizure, self-incrimination, due process, takings, trial rights, jury rights, cruel and unusual punishment, unenumerated rights, or reserved powers. It merely adjusts monetary thresholds for bankruptcy eligibility.
• ✓ Passes · Individual sovereignty
  The bill expands access to bankruptcy relief by raising debt limits, thereby increasing individual and small business options for financial reorganization. It does not restrict personal liberty, property, speech, labor, or belief. Rather, it enhances individual sovereignty by allowing more debtors to use streamlined bankruptcy procedures.
• ✓ Passes · Decentralization
  Bankruptcy is a federal constitutional matter, and the Constitution explicitly assigns it to Congress. The four-question test: (1) Individuals cannot handle bankruptcy without government involvement—it requires legal discharge of debt; (2) Local communities cannot handle bankruptcy—it requires uniform national law; (3) States cannot handle bankruptcy—the Constitution reserves this to the federal g…
• ✓ Passes · Due process and takings
  The bill does not deprive anyone of life, liberty, or property without due process. It does not take property for public use without just compensation. It merely adjusts eligibility thresholds for bankruptcy proceedings, which are themselves designed to provide due process to debtors and creditors. There is no arbitrary government action; the changes are rational and economic.

Sources: Congress.gov: HR 7730 summary