S1659-119

What This Bill Does

The Bankruptcy Administration Improvement Act of 2025 increases Chapter 7 trustee compensation, adjusts bankruptcy fee allocations, and extends temporary bankruptcy judgeships. It raises the trustee base amount under 11 U.S.C. Section 330(b)(1) from $45 to $105, which combined with the existing $15 amount raises total per-case compensation from $60 to $120.

The bill funds the increase by reallocating filing-fee proceeds and increasing Chapter 11 quarterly fees from 0.8 percent to 1.1 percent of disbursements. It extends related fee provisions through 2031, directs $5.4 million annually from Chapter 11 fees to the Treasury for fiscal years 2026 through 2031, and extends 16 temporary bankruptcy judgeships from five-year to ten-year terms.

Who Benefits and How

Chapter 7 bankruptcy trustees benefit directly because per-case compensation doubles after decades without an increase. Creditors in Chapter 7 cases, including federal agencies, state governments, medical providers, small businesses, and domestic support creditors, benefit if better-compensated trustees pursue more asset recovery and distributions. Federal bankruptcy courts and bankruptcy litigants benefit from retaining temporary judgeships longer, and the U.S. Trustee System Fund receives continued fee revenue.

Who Bears the Burden and How

Chapter 11 debtors bear the main direct cost because quarterly fees rise from 0.8 percent to 1.1 percent of disbursements. The U.S. Trustee Program and bankruptcy courts must administer the revised fee allocations and compensation rules. Chapter 7 filers are not directly burdened by a filing-fee increase, but the bankruptcy fee system shifts more revenue among trustee compensation, the U.S. Trustee System Fund, deficit reduction, and Treasury deposits.

Key Provisions

• Raises Chapter 7 trustee compensation by increasing the Section 330(b)(1) amount from $45 to $105.
• Reallocates filing-fee proceeds among trustee compensation, the Treasury special fund, the deficit-reduction fund, and the U.S. Trustee System Fund.
• Increases Chapter 11 quarterly fees from 0.8 percent to 1.1 percent of disbursements.
• Extends temporary bankruptcy fee provisions through 2031.
• Directs $5.4 million annually from Chapter 11 fees to the Treasury for fiscal years 2026 through 2031.
• Extends 16 temporary bankruptcy judgeships from five-year to ten-year terms.
• Applies trustee-compensation changes to new Chapter 7 cases and conversions after the effective date.