Bankruptcy Threshold Adjustment and Technical Corrections Act

Bill: 117-hr-7494
Sponsor: full_name: Rep. Neguse, Joe [D-CO-2]
Introduced: 2022-04-11
Policy area: Finance and Financial Sector
Latest action: action_date: 2022-11-01
text: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.

Summaries:
action_date: 2022-04-11
action_desc: Introduced in House
text: <p><strong>Bankruptcy Threshold Adjustment and Technical Corrections Act </strong></p> <p>This bill modifies provisions related to small business reorganization bankruptcies and wage earner's bankruptcies. </p> <p>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. </p> <p>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.)

tv_txt: I 117th CONGRESS 2d Session H. R. 7494 IN THE HOUSE OF REPRESENTATIVES April 11, 2022 Mr. Neguse (for himself and Mr. Cline ) introduced the following bill; which was 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.

1. Short title This Act may be cited as the Bankruptcy Threshold Adjustment and Technical Corrections Act . 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 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) 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) 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 (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) 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 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) Debtor The term debtor means a small business debtor. . (2) Amounts 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.