Title: Bankruptcy Threshold Adjustment and Technical Corrections Act
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 makes permanent 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 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.)

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3823 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 3823

   To amend title 11, United States Code, to modify the eligibility 
  requirements for a debtor under chapter 13, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 14, 2022

Mr. Grassley (for himself, Mr. Durbin, Mr. Whitehouse, and Mr. Cornyn) 
introduced the following bill; which was read twice and referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
   To amend title 11, United States Code, to modify the eligibility 
  requirements for a debtor under chapter 13, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

SEC. 2. BANKRUPTCY AMENDMENTS.

    (a) CARES Act Amendment.--Section 1113(a) of the CARES Act (Public 
Law 116-136; 134 Stat. 310) is amended by striking paragraph (5).
    (b) Definition of Small Business Debtor.--Section 101(51D)(B)(iii) 
of title 11, United States Code, is amended by striking ``an issuer'' 
and all that follows and inserting ``a corporation described in clause 
(ii).''.
    (c) Adjustments for Inflation.--
            (1) In general.--Section 104 of title 11, United States 
        Code, is amended--
                    (A) in subsection (a), by inserting ``1182(1),'' 
                after ``707(b),''; and
                    (B) in subsection (b), by inserting ``1182(1),'' 
                after ``707(b),''.
            (2) No adjustments in 2022.--With respect to the adjustment 
        of dollar amounts required on April 1, 2022, under section 104 
        of title 11, United States Code, as amended by paragraph (1), 
        the Judicial Conference of the United States shall not adjust 
        the dollar amount in effect under section 109(e) or 1182(1) of 
        title 11, United States Code.
    (d) 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.''.
    (e) Definition of Debtor.--Section 1182(1)(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).''.
    (f) 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;''.
    (g) 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.''.
    (h) 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''.
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