An official notice from the Judicial Conference of the United States was just published announcing that certain dollar amounts in the Bankruptcy Code will be increased a larger than usual 10.973% this time for new cases filed on or after April 1, 2022. Follow this link for the Federal Register page with a chart listing all of the updated dollar amounts. Among the most meaningful increases for Chapter 11 and other business bankruptcy cases:
- The employee compensation and employee benefit plan contribution priorities under Sections 507(a)(4) and 507(a)(5) both increase to $15,150 from $13,650;
- The consumer deposit priority under Section 507(a)(7) rises to $3,350 from $3,025;
- The total amount of claims required to file an involuntary petition rises to $18,600 from $16,750;
- The dollar amount in the bankruptcy venue provision, 28 U.S.C. Section 1409(b), which requires that actions to recover for non-consumer, non-insider debt be brought against defendants in the district in which they reside, has increased to to $27,750 from $25,000;
- The minimum amount required to bring a preference claim against a defendant in a non-consumer debtor case, specified in Section 547(c)(9), rises to $7,575 from $6,825; and
- The total debt amount in the definition of small business debtor in Section 101(51D) will rise to $3,024,725 from $2,725,625.
Other adjustments will affect consumers more than business debtors. For example, the debt limit for an individual to qualify for a Chapter 13 bankruptcy case will rise to $1,395,875 of secured debt, and certain exemption amounts will also increase.
Given recent inflation, these increases are larger than usual. Be sure to keep them in mind when assessing cases filed after April 1, 2022. Official bankruptcy forms will likely be updated as April 1st draws near.
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