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Business Bankruptcy Issues Recent Developments

Jumping Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2025

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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 adjusted upward by 13.2004%, perhaps the largest increase to date. Inflation adjustments are made to certain Bankruptcy Code dollar amounts every three years, and these new amounts will apply to cases filed on or after April 1, 2025.

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 $17,150 from $15,150;
  • The consumer deposit priority under Section 507(a)(7) rises to $3,800 from $3,350;
  • The total amount of claims required to file an involuntary petition rises to $21,050 from $18,600;
  • 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 $31,425 from $25,700;
  • 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 $8,575 from $7,575; and
  • The total debt amount in the definition of small business debtor in Section 101(51D) will rise to $3,424,000 from $3,024,725.

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 $1,580,125 of secured debt, and certain exemption amounts will also increase.

These new dollar amounts, on top of the 10.973% increase made in 2022, are now approximately 25% higher than the amounts in effect in 2019. Be sure to keep the new, higher amounts in mind when assessing cases filed after April 1, 2025. Official bankruptcy forms will likely be updated as the April 1, 2025 effective date draws near.

Image Courtesy of Flickr by Pictures of Money

Business Bankruptcy Issues Recent Developments

Moving Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2022

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.

 

 

 

Image Courtesy of Flickr by Pictures of Money

Business Bankruptcy Issues Recent Developments

Official Bankruptcy Forms Revised To Reflect April 1, 2019 Dollar Amount Adjustments Now In Effect

As discussed in an earlier post called “Moving Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2019,” various dollar amounts in the Bankruptcy Code and related statutory provisions were increased for cases filed on or after today, April 1, 2019. This information sheet has a list of all of the dollar amount changes now in effect.

The official bankruptcy forms have also been revised to reflect these new dollar amounts.

Remember, the increased dollar amounts, now reflected on these forms, apply only to cases filed on or after April 1, 2019.

Business Bankruptcy Issues Recent Developments

Moving Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2019

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 about 6.2% this time for new cases filed on or after April 1, 2019. 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 $13,650 from $12,850;
  • The consumer deposit priority under Section 507(a)(7) rises to $3,025 from $2,850;
  • The total amount of claims required to file an involuntary petition rises to $16,750 from $15,775;
  • 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 $13,650 from $12,850;
  • 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 $6,825 from $6,425; and
  • The total debt amount in the definition of small business debtor in Section 101(51D) will rise to $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 $1,257,850 of secured debt, and certain exemption amounts will also increase.

Although the changes aren’t that large, be sure to keep them in mind when assessing cases filed after April 1, 2019. Official bankruptcy forms will likely be updated as April 1st draws near.

Business Bankruptcy Issues Recent Developments

Official Bankruptcy Forms Revised To Reflect April 1, 2016 Dollar Amount Adjustments Now In Effect

As discussed in an earlier post called “Going Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2016,” various dollar amounts in the Bankruptcy Code and related statutory provisions were increased for cases filed on or after today, April 1, 2016. This information sheet has a list of all the dollar amount changes now in effect.

The official bankruptcy forms have also been revised to reflect these new dollar amounts.

Remember, the increased dollar amounts, now reflected on these forms, apply only to cases filed on or after April 1, 2016.

Business Bankruptcy Issues Recent Developments

Going Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2016

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 ever so slightly — only about 3% this time — for new cases filed on or after April 1, 2016. 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 $12,850 from $12,475;
  • The consumer deposit priority under Section 507(a)(7) rises to $2,850 from $2,775;
  • The total amount of claims required to file an involuntary petition rises to $15,775 from $15,325;
  • 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 $12,850 from $12,475;
  • 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 $6,425 from $6,225; and
  • The total debt amount in the definition of small business debtor in Section 101(51D) will rise to $2,566,050.

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 $1,184,200 of secured debt, and certain exemption amounts will also increase.

Although the changes aren’t substantial, be sure to keep them in mind when assessing cases filed after April 1st.

Business Bankruptcy Issues Recent Developments

Going Up: Bankruptcy Dollar Amounts Will Increase On April 1, 2013

It hasn’t gotten much publicity yet, but certain dollar amounts in the Bankruptcy Code will be increased for new cases filed on or after April 1, 2013. Follow this link for a chart listing all of the changes on this Federal Register page, which printed this month’s official notice from the Judicial Conference of the United States.

Among the most meaningful increases for Chapter 11 and other business bankruptcy cases:

  • The total amount of claims required to file an involuntary petition rises to $15,325 from $14,425;
  • The employee compensation and benefit plan contribution priorities under Sections 507(a)(4) and 507(a)(5) both increase to $12,475 from $11,725;
  • The consumer deposit priority under Section 507(a)(7) rises to $2,775 from $2,600;
  • 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 $12,475 from $11,725;
  • 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 from $6,225 from $5,475; and
  • The total debt amount in the definition of small business debtor in Section 101(51D) will rise to $2,490,925.

Other adjustments will affect consumers more than business debtors. For example, the debt limit for an individual to be able to qualify to file a Chapter 13 bankruptcy case will rise to $1,149,525 of secured debt, and certain exemption amounts will also rise.

Although the changes aren’t substantial, be sure to keep them in mind when assessing cases filed after April 1st.