HR3867-119

What This Bill Does

The Bankruptcy Administration Improvement Act adjusts bankruptcy-system funding. The findings explain that bankruptcy fees support a self-funded system covering courts, judges, U.S. trustees, and chapter 7 trustees, and that chapter 7 trustees administer thousands of cases and return assets to creditors including IRS, USDA, SBA, and state and municipal governments. Section 3 raises trustee compensation in chapter 7 cases from $45 to $105 and changes how remaining filing fees are deposited: $63.51 to the judiciary special fund under 28 U.S.C. 1931, $25 to the Deficit Reduction Act special fund, and $51.49 to the United States Trustee System Fund. It also changes the Trustee System Fund percentage to 28.33 percent of certain filing fees. Section 4 extends chapter 11 quarterly-fee provisions from five years to ten years, raises a calculation factor from 0.8 to 1.1, extends temporary deposit rules through 2031, and requires $5.4 million of chapter 11 quarterly fees to be deposited in the general fund for each of fiscal years 2026 through 2031. Section 5 extends temporary bankruptcy judgeships under the 2020 and 2017 bankruptcy judgeship laws from five years to ten years. The amendments generally take effect on the first October 1 after enactment, with chapter 7 trustee compensation applying to new or converted chapter 7 cases and quarterly-fee changes applying to pending chapter 11 cases and future calendar-quarter disbursements.

Who Benefits and How

Chapter 7 trustees benefit from a higher per-case compensation payment. Bankruptcy courts benefit from extended temporary judgeships and continued fee-supported funding. Government creditors benefit if better-supported trustees recover more assets in chapter 7 cases. United States Trustee System Fund programs benefit from revised fee allocations and extended quarterly-fee funding.

Who Bears the Burden and How

Chapter 11 debtors must pay quarterly fees under extended and increased funding rules. Large bankruptcy estates may bear higher quarterly-fee obligations through the 1.1 factor and 2031 extension. Bankruptcy clerks must implement new filing-fee deposit allocations. U.S. Trustee Program staff must administer revised fund deposits and quarterly-fee rules. The general fund receives $5.4 million annually from chapter 11 quarterly fees, reducing funds available elsewhere in the system.

Key Provisions

• Raises chapter 7 trustee compensation from $45 to $105.
• Reallocates bankruptcy filing-fee deposits among judiciary, Deficit Reduction Act, and United States Trustee System funds.
• Extends chapter 11 quarterly-fee mechanisms from five years to ten years and through fiscal year 2031.
• Increases the quarterly-fee calculation factor from 0.8 to 1.1.
• Requires $5.4 million of quarterly fees to be deposited annually in the general fund for fiscal years 2026 through 2031.
• Extends temporary bankruptcy judgeships from five years to ten years.
• Applies fee changes on the first October 1 after enactment.