Bankruptcy Threshold Adjustment and Technical Corrections Act
Bill: S.3823 | Sponsor: Sen. Grassley, Chuck (R-IA)
Policy area: Finance and Financial Sector

Summary:
Bankruptcy Threshold Adjustment and Technical Corrections Act
This bill modifies provisions related to small business reorganization bankruptcies and wage earner's bankruptcies.
Specifically, the bill extends for two years the increase of the amount of debt allowed to be carried by debtors to qualify for small business reorganization bankruptcy and provides that this debt limit is subject to adjustment for inflation. Additionally, it provides that a small business debtor includes a debtor that is an affiliate of certain publicly traded companies. Further, it authorizes the bankruptcy trustee to operate the business of the debtor if the debtor ceases to be a debtor in possession.
The bill also increases for two years the debt limit for individuals filing for bankruptcy under Chapter 13 (i.e., the wage earner's plan) and allows both secured and unsecured debt to count towards this single limit. (Currently, separate limits apply to secured and unsecured debt.)

[117th Congress Public Law 151]
[From the U.S. Government Publishing Office]



[[Page 1297]]

      BANKRUPTCY THRESHOLD ADJUSTMENT AND TECHNICAL CORRECTIONS ACT

[[Page 136 STAT. 1298]]

Public Law 117-151
117th Congress

                                 An Act


 
    To amend title 11, United States Code, to modify the eligibility 
       requirements for a debtor under chapter 13, and for other 
             purposes. <<NOTE: June 21, 2022 -  [S. 3823]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress 
assembled, <<NOTE: Bankruptcy Threshold Adjustment and Technical 
Corrections Act.>> 
SECTION 1. <<NOTE: 11 USC 101 note.>>  SHORT TITLE.

    This Act may be cited as the ``Bankruptcy Threshold Adjustment and 
Technical Corrections Act''.
SEC. 2. BANKRUPTCY AMENDMENTS.

    (a) Definition of Small Business Debtor.--Section 101(51D)(B) of 
title 11, United States Code, is amended--
            (1) in clause (i), by inserting ``under this title'' after 
        ``affiliated debtors''; and
            (2) in clause (iii), by striking ``an issuer'' and all that 
        follows and inserting ``a corporation described in clause 
        (ii).''.

    (b) Adjustments for Inflation.--Section 104 of title 11, United 
States Code, is amended--
            (1) in subsection (a), by inserting ``1182(1),'' after 
        ``707(b),''; and
            (2) in subsection (b), by inserting ``1182(1),'' after 
        ``707(b),''.

    (c) Who May Be a Debtor Under Chapter 13.--Section 109 of title 11, 
United States Code is amended by striking subsection (e) and inserting 
the following:
    ``(e) Only an individual with regular income that owes, on the date 
of the filing of the petition, noncontingent, liquidated debts of less 
than $2,750,000 or an individual with regular income and such 
individual's spouse, except a stockbroker or a commodity broker, that 
owe, on the date of the filing of the petition, noncontingent, 
liquidated debts that aggregate less than $2,750,000 may be a debtor 
under chapter 13 of this title.''.
    (d) Definition of Debtor.--Section 1182(1) of title 11, United 
States Code, is amended to read as follows:
            ``(1) Debtor.--The term `debtor'--
                    ``(A) subject to subparagraph (B), means a person 
                engaged in commercial or business activities (including 
                any affiliate of such person that is also a debtor under 
                this title and excluding a person whose primary activity 
                is the business of owning single asset real estate) that 
                has aggregate noncontingent liquidated secured and 
                unsecured debts as of the date of the filing of the 
                petition or the date of the order for relief in an 
                amount not more than $7,500,000 (excluding debts owed to 
                1 or more affiliates or insiders) not less than 50 
                percent of which arose

[[Page 136 STAT. 1299]]

                from the commercial or business activities of the 
                debtor; and
                    ``(B) does not include--
                          ``(i) any member of a group of affiliated 
                      debtors under this title that has aggregate 
                      noncontingent liquidated secured and unsecured 
                      debts in an amount greater than $7,500,000 
                      (excluding debt owed to 1 or more affiliates or 
                      insiders);
                          ``(ii) any debtor that is a corporation 
                      subject to the reporting requirements under 
                      section 13 or 15(d) of the Securities Exchange Act 
                      of 1934 (15 U.S.C. 78m, 78o(d)); or
                          ``(iii) any debtor that is an affiliate of a 
                      corporation described in clause (ii).''.

    (e) Trustee.--Section 1183(b)(5) of title 11, United States Code, is 
amended--
            (1) by striking ``possession, perform'' and inserting 
        ``possession--
                    ``(A) perform'';
            (2) in subparagraph (A), as so designated--
                    (A) by striking ``, including operating the business 
                of the debtor''; and
                    (B) by adding ``and'' at the end; and
            (3) by adding at the end the following:
                    ``(B) be authorized to operate the business of the 
                debtor;''.

    (f) Confirmation of Plan.--Section 1191(c) of title 11, United 
States Code, is amended by striking paragraph (3) and inserting the 
following:
            ``(3)(A) The debtor will be able to make all payments under 
        the plan; or
            ``(B)(i) there is a reasonable likelihood that the debtor 
        will be able to make all payments under the plan; and
            ``(ii) the plan provides appropriate remedies, which may 
        include the liquidation of nonexempt assets, to protect the 
        holders of claims or interests in the event that the payments 
        are not made.''.

    (g) Technical Corrections to the Bankruptcy Administration 
Improvement Act.--Section 589a of title 28, United States Code is 
amended--
            (1) in subsection (c) by striking ``subsection (a)'' and 
        inserting ``subsections (a) and (f)''; and
            (2) in subsection (f)(1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``subsections (b) and (c)'' and inserting 
                ``subsection (b)(5)''; and
                    (B) in subparagraph (A), by inserting ``needed to 
                offset the amount'' after ``amounts''.

    (h) Effective Date; Applicability.--
            (1) <<NOTE: 11 USC 104 note.>>  In general.--Subsections (b) 
        and (c) and the amendments made by subsections (b) and (c) shall 
        take effect on the date of enactment of this Act.
            (2) <<NOTE: 11 USC 101 note.>>  Retroactive application of 
        certain amendments.--The amendments made by subsections (a), 
        (d), (e), and (f) shall apply with respect to any case that--
                    (A) is commenced under title 11, United States Code, 
                on or after March 27, 2020; and

[[Page 136 STAT. 1300]]

                    (B) with respect to a case that was commenced on or 
                after March 27, 2020 and before the date of enactment of 
                this Act, is pending on the date of enactment of this 
                Act.
            (3) <<NOTE: 28 USC 589a note.>>  Effective date of technical 
        corrections to baia.--The amendments made by subsection (g) 
        shall take effect as if enacted on October 1, 2021.

    (i) Sunsets.--
            (1) In general. <<NOTE: Effective date. 11 USC 109 
        note.>> --Effective on the date that is 2 years after the date 
        of enactment of this Act--
                    (A) subsection (e) of section 109 of title 11, 
                United States Code is amended to read as such subsection 
                read on the day before the date of enactment of this 
                Act; and
                    (B) section 1182(1) of title 11, United States Code, 
                is amended to read as follows:
            ``(1) <<NOTE: Definition.>>  Debtor.--The term `debtor' 
        means a small business debtor.''.
            (2) Amounts. <<NOTE: Applicability. 11 USC 109 note.>> --For 
        purposes of applying subsection (e) of section 109 of title 11, 
        United States Code, as amended by paragraph (1)(A), the amounts 
        specified in such subsection shall be the amounts that were in 
        effect on the day before the date of enactment of this Act.

    Approved June 21, 2022.

LEGISLATIVE HISTORY--S. 3823:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 168 (2022):
            Apr. 7, considered and passed Senate.
            June 7, considered and passed House.

                                  <all>