S3424-119

What This Bill Does

The Bankruptcy Administration Improvement Act of 2025 addresses the long-overdue increase in compensation for Chapter 7 bankruptcy trustees, who have been paid only $60 per case since 1994. It doubles their compensation to $120 per case. The bill also restructures bankruptcy fee deposits to maintain self-funding of the bankruptcy system and extends temporary bankruptcy judgeships from 5 to 10 years to handle growing caseloads.

Who Benefits and How

Chapter 7 bankruptcy trustees benefit most directly, receiving a 100% increase in per-case compensation (from $60 to $120). Bankruptcy judges in temporary positions benefit from extended terms. Creditors such as the IRS, Department of Agriculture, SBA, medical providers, and small businesses benefit from continued trustee services that return assets to them. The U.S. Trustee System benefits from restructured fee deposits.

Who Bears the Burden and How

Chapter 11 debtors face increased quarterly fees, as the fee multiplier rises from 0.8% to 0.9% and the fee period extends from 5 to 10 years. The costs of higher trustee compensation are absorbed within existing fee structures rather than new filing fees. No changes are made to Chapter 7 filing fees, and courts retain authority to waive fees for indigent filers.

Key Provisions

• Increases Chapter 7 trustee compensation from $60 to $120 per case (Section 3)
• Restructures deposit allocations for bankruptcy filing fees among Treasury funds and U.S. Trustee System Fund (Section 3)
• Increases Chapter 11 quarterly fee rates and extends the fee period from 5 to 10 years (Section 4)
• Extends all temporary bankruptcy judgeships from 5-year to 10-year terms (Section 5)