Progression: Bankruptcy Code dollar amounts will increase on April 1, 2022 – Insolvency/Bankruptcy/Restructuring
United States: Progression: Bankruptcy Code dollar amounts will increase on April 1, 2022
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An official notice from the United States Judicial Conference just released announcing that certain dollar amounts in the Bankruptcy Code will be increased 10.973% more than usual this time for new cases filed on or after April 1, 2022. Follow this link to the Federal Register page with a table listing all updated dollar amounts. Among the most significant increases for Chapter 11 and other business bankruptcy cases:
- Employee compensation and benefit plan contribution priorities under Sections 507(a)(4) and 507(a)(5) both increase from $13,650 to $15,150;
- Consumer filing priority under section 507(a)(7) increases from $3,025 to $3,350;
- The total amount of claims required to file an involuntary claim increases from $16,750 to $18,600;
- The dollar amount of the location of bankruptcy provision, 28 USC Section 1409(b), which requires that non-consumer and uninitiated debt collection actions be brought against defendants in the district in which they reside , rose to $27,750 from $25,000;
- The minimum amount required to bring a preferential action against a defendant in a nonconsumer debtor case, specified in section 547(c)(9), is increased from $6,825 to $7,575; and
- The total amount of debt in the definition of small business debtor in section 101(51D) will increase from $2,725,625 to $3,024,725.
Other adjustments will affect consumers more than corporate debtors. For example, an individual’s debt limit to qualify for a Chapter 13 bankruptcy case will increase to $1,395,875 of secured debt, and certain exemption amounts will also increase.
Given recent inflation, these increases are larger than usual. Be sure to keep them in mind when evaluating cases filed after April 1, 2022. Official bankruptcy forms will likely be updated as April 1 approaches.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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