Bankruptcy Administration Improvement Act of 2025
Sponsors
Legislative Progress
IntroducedMr. Coons (for himself, Mr. Graham, Mr. Booker, and Mrs. …
Passed Senate (inferred from es version)
Summary
What This Bill Does
This bill increases compensation for bankruptcy trustees who administer Chapter 7 cases from $60 to $120 per case, addressing a 30-year compensation freeze since 1994. It also extends temporary bankruptcy judgeships from 5-year to 10-year terms and modifies how bankruptcy fees are calculated and distributed.
Who Benefits and How
- Chapter 7 bankruptcy trustees receive a 100% pay increase (from $60 to $120 per case), their first raise since 1994
- Bankruptcy judges in temporary positions get extended job security with terms doubled from 5 to 10 years
- Federal agencies (IRS, USDA, SBA) and private creditors benefit from continued effective case administration by adequately compensated trustees
Who Bears the Burden and How
- Businesses undergoing Chapter 11 bankruptcy reorganization face higher quarterly fees, with the maximum rate increasing from 0.8% to 0.9% of disbursements
- Large corporations using Chapter 11 restructuring pay more over a longer calculation period (10 years vs 5 years)
- Chapter 11 debtors collectively fund $5.4 million annually directed to the Treasury general fund
Key Provisions
- Increases Chapter 7 trustee compensation from $45 to $105 under section 330(b)(1) (total from $60 to $120 per case)
- Extends temporary bankruptcy judgeships in multiple districts from 5-year to 10-year terms
- Raises maximum Chapter 11 quarterly fee rate from 0.8% to 0.9%
- Extends fee calculation lookback period from 5 to 10 years
- Directs $5.4 million annually from Chapter 11 fees to Treasury general fund through 2031
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Increases compensation for Chapter 7 bankruptcy trustees and extends the term of temporary bankruptcy judgeships while modifying bankruptcy fee deposit allocations to ensure the bankruptcy system remains self-funded.
Policy Domains
Legislative Strategy
"Address a 30-year compensation freeze for Chapter 7 bankruptcy trustees while extending temporary bankruptcy judgeships and ensuring continued self-funding of the bankruptcy system through adjusted fee structures"
Likely Beneficiaries
- Chapter 7 bankruptcy trustees (receive doubled compensation from to per case)
- Bankruptcy judges in temporary positions (term extended from 5 to 10 years)
- Federal government creditors (IRS, Dept of Agriculture, SBA) who receive asset returns through trustee work
Likely Burden Bearers
- Chapter 11 debtors (pay increased quarterly fees)
- Parties filing bankruptcy petitions (indirectly through modified fee allocations)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "district_courts"
- → United States District Courts
- "attorney_general"
- → Attorney General of the United States
- "bankruptcy_courts"
- → United States Bankruptcy Courts
- "chapter_7_trustees"
- → Trustees serving in bankruptcy cases under Chapter 7 of title 11, United States Code
Key Definitions
Terms defined in this bill
Trustees serving in bankruptcy cases under chapter 7 of title 11, United States Code, who provide services at the front lines of the bankruptcy process, administering thousands of cases
A fund established under section 589a of title 28, United States Code, used to fund the bankruptcy system
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology