[Congressional Record Volume 172, Number 8 (Monday, January 12, 2026)]
[House]
[Pages H626-H628]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BANKRUPTCY ADMINISTRATION IMPROVEMENT ACT OF 2025
Mr. CLINE. Mr. Speaker, I move to suspend the rules and pass the bill
(S. 3424) to amend titles 11 and 28, United States Code, to modify the
compensation payable to trustees serving in cases under chapter 7 of
title 11, United States Code, to extend the term of certain temporary
offices of bankruptcy judges, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
[[Page H627]]
S. 3424
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 Administration
Improvement Act of 2025''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Congress has amended the laws governing bankruptcy fees
as necessary to ensure that the bankruptcy system remains
self-supporting, while also fairly allocating the costs of
the system among those who use the system.
(2) Because of the importance for the bankruptcy system to
be self-funded, at no cost to taxpayers, Congress has closely
monitored the funding needs of the bankruptcy system,
including by requiring periodic reporting by the Attorney
General regarding the United States Trustee System Fund.
(3) Because the system governing bankruptcies of various
types is interconnected, Congress has established fees,
including filing fees, quarterly fees in chapter 11 cases,
and other fees, that together fund the courts, judges, United
States trustees, and trustees serving in bankruptcy cases
under chapter 7 of title 11, United States Code.
(4) Trustees serving in bankruptcy cases under chapter 7 of
title 11, United States Code, are vital to the functioning of
the bankruptcy system, as they provide services at the front
lines of the bankruptcy process, administering thousands of
cases.
(5) Chapter 7 bankruptcy trustees provide valuable returns
of assets to government creditors, including the Internal
Revenue Service, the Department of Agriculture, the Small
Business Administration, and other Federal, State, and
municipal governments.
(6) Due to the work of the chapter 7 bankruptcy trustees,
millions of dollars are also disbursed annually to private
creditors of all types, including medical providers,
unsecured creditors, small businesses, and micro-enterprises
such as domestic support providers.
(7) Despite the essential role of chapter 7 bankruptcy
trustees, since 1994 the amount of compensation paid to these
trustees has not been increased. As in 1994, bankruptcy
trustees receive only $60 per case (composed of $45 from
subsection 330(b)(1), and $15 from subsection 330(b)(2), of
title 11, United States Code) in nearly 90 percent of chapter
7 cases, and bankruptcy trustees receive no compensation at
all for cases in which the filing fee is waived by the
bankruptcy court.
(8) Since 1994, there have been significant increases in
salaries, attorney fees, budget appropriations, filing fees,
and court-related fees associated with chapter 7
bankruptcies. In contrast, the $60 paid to chapter 7 trustees
has remained the same and has not even been increased for
inflation. In 2021, Congress attempted to implement a
mechanism that would give chapter 7 trustees a raise, but the
trustees only received increased compensation for 1 fiscal
year. Based on Consumer Price Index estimates, the $60 paid
to trustees in 1994 would be the equivalent of over $125
today.
(9) This Act and the amendments made by this Act--
(A) increase the compensation of chapter 7 bankruptcy
trustees to the level that is appropriate, overdue, and
proportionate with the level that was intended in 1994, by
increasing the total compensation of trustees to $120 per
case;
(B) ensure adequate funding of the United States trustee
system through the increase of certain fees, which will also
apply to districts that are not part of a United States
trustee region as required by existing law; and
(C) support the preservation of existing bankruptcy
judgeships that are urgently needed to handle existing and
anticipated increases in business and consumer caseloads.
(10) This Act will not alter the filing fee under chapter 7
of title 11, United States Code, and will not modify, impair,
or supersede the current authority of the district courts of
the United States, or of bankruptcy courts, to waive the
payment of filing fees by indigent individuals.
SEC. 3. TRUSTEE COMPENSATION.
(a) Compensation of Officers.--Section 330 of title 11,
United States Code, is amended--
(1) in subsection (b)(1) by striking ``$45'' and inserting
``$105''; and
(2) by striking subsection (e).
(b) Remainder of Fees.--Notwithstanding any other provision
of law, the remainder of fees collected under section
1930(a)(1)(A) of title 28, United States Code, after
compensating trustees under section 330(b)(1) of title 11,
United States Code, shall be deposited as follows:
(1) $63.51 in the special fund of the Treasury established
under section 1931 of title 28, United States Code.
(2) $25.00 in the special fund established in accordance
with section 10101(b) of the Deficit Reduction Act of 2005
(28 U.S.C. 1931 note).
(3) $51.49 in the United States Trustee System Fund
established under section 589a of title 28, United States
Code.
(c) United States Trustee System Fund.--Section 589a of
title 28, United States Code, is amended--
(1) in subsection (b)(1)(A), by striking ``40.46 percent of
the fees collected'' and inserting ``$51.49 of the fees
collected in each case''; and
(2) in subsection (f)(1)--
(A) in subparagraph (D) by striking ``Fourth'' and
inserting ``Second'';
(B) by striking subparagraphs (B) and (C); and
(C) by redesignating subparagraph (D) as subparagraph (B).
SEC. 4. BANKRUPTCY FEES.
(a) Quarterly Fees.--Section 1930(a)(6)(B) of title 28,
United States Code, is amended--
(1) in clause (i), by striking ``5-year'' and inserting
``10-year''; and
(2) in clause (ii)--
(A) in subclause (I)--
(i) by inserting ``the greater of'' before ``0.4''; and
(ii) by striking ``and'' at the end and inserting ``or'';
and
(B) in subclause (II), by striking ``0.8'' and inserting
``0.9''.
(b) Period for Deposits.--Section 589a(f) of title 28,
United States Code, as amended by section 3(c)(2), is amended
by striking ``2026'' each place it appears and inserting
``2031''.
(c) Deposits of Certain Fees for Fiscal Years 2026 Through
2031.--Notwithstanding section 589a(b) of title 28, United
States Code, for each of fiscal years 2026 through 2031--
(1) the fees collected under section 1930(a)(6) of title
28, United States Code, less the amount specified in
subparagraph (2) of this subsection, shall be deposited as
specified in section 589a(f) of title 28, United States Code,
as amended by this Act; and
(2) $5,400,000 of the fees collected under section
1930(a)(6) of title 28, United States Code, shall be
deposited in the general fund of the Treasury.
SEC. 5. EXTENSION OF TERM OF CERTAIN TEMPORARY OFFICES OF
BANKRUPTCY JUDGE.
(a) Bankruptcy Administration Improvement Act of 2020.--
Section 4 of the Bankruptcy Administration Improvement Act of
2020 (28 U.S.C. 152 note) is amended--
(1) in subsection (a)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' and
inserting ``10 years''; and
(B) in subparagraph (B)(i), by striking ``5 years'' and
inserting ``10 years'';
(2) in subsection (b)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' and
inserting ``10 years'';
(B) in subparagraph (B)(i), by striking ``5 years'' and
inserting ``10 years'';
(C) in subparagraph (C)(i), by striking ``5 years'' and
inserting ``10 years'';
(D) in subparagraph (D)(i), by striking ``5 years'' and
inserting ``10 years'';
(E) in subparagraph (E)(i), by striking ``5 years'' and
inserting ``10 years''; and
(F) in subparagraph (F)(i), by striking ``5 years'' and
inserting ``10 years'';
(3) in subsection (c)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' and
inserting ``10 years''; and
(B) in subparagraph (B)(i), by striking ``5 years'' and
inserting ``10 years'';
(4) in subsection (d)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' and
inserting ``10 years''; and
(B) in subparagraph (B)(i), by striking ``5 years'' and
inserting ``10 years'';
(5) in subsection (e)(2)(A), by striking ``5 years'' and
inserting ``10 years''; and
(6) in subsection (f)(2)(A), by striking ``5 years'' and
inserting ``10 years''.
(b) Bankruptcy Judgeship Act of 2017.--Section
1003(b)(2)(A) of the Bankruptcy Judgeship Act of 2017 (28
U.S.C. 152 note) is amended by striking ``5 years'' and
inserting ``10 years''.
SEC. 6. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) In General.--Except as provided in subsection (b), the
amendments made by this Act shall take effect on the first
day of the calendar quarter that first occurs on or after the
date of enactment of this Act.
(b) Exceptions.--
(1) Compensation of officers.--Section 3 and the amendments
made by section 3 shall apply to any case under title 11,
United States Code, commenced on or after October 1 that
first occurs after the date of enactment of this Act--
(A) under chapter 7 of title 11, United States Code; or
(B) under chapter 11, 12, or 13 of title 11, United States
Code, that is converted to a case under chapter 7 of title
11, United States Code.
(2) Bankruptcy fees.--Section 4 and the amendments made by
section 4 shall apply to--
(A) any case commenced or pending under chapter 11 of title
11, United States Code, on the first day of the calendar
quarter that first occurs on or after the date of enactment
of this Act; and
(B) quarterly fees payable under section 1930(a)(6) of
title 28, United States Code, as amended by section 4, for
disbursements made in any calendar quarter that begins on or
after the date of enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Cline) and the gentleman from Maryland (Mr. Raskin) each
will control 20 minutes.
The Chair recognizes the gentleman from Virginia.
General Leave
Mr. CLINE. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
insert extraneous material on S. 3424.
[[Page H628]]
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. CLINE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of S. 3424, the Bankruptcy
Administration Improvement Act of 2025.
The bill before us today is an important piece of legislation that
will help ensure the bankruptcy system continues to function
efficiently and without taxpayer funding.
Congress designed the bankruptcy system to be funded through the fees
imposed on those who utilize the system. From time to time, Congress
has passed legislation to respond to how the bankruptcy system is
operating.
S. 3424 responds to the current bankruptcy climate in three ways:
First, the bill extends the temporary quarterly fees used to pay for
the United States Trustee Program within the Department of Justice and
bankruptcy judgeships. Ensuring taxpayers are not on the hook for the
administration of the Bankruptcy Code is critical. The only way to
ensure the bankruptcy system is funded far into the future is to
maintain the current fee schedule.
Second, S. 3424 extends for an additional 5-year period numerous
temporary bankruptcy judgeships across the country. These bankruptcy
judges ensure that bankruptcy cases are quickly and efficiently
administered. While bankruptcy filings in recent years have slowed,
early data suggests that bankruptcy filings will likely increase in the
coming years. Maintaining these temporary bankruptcy judgeships for the
next 5 years will ensure that the bankruptcy system can continue to
operate at full capacity if necessary.
Finally, and most importantly, S. 3424 increases the pay per case for
Chapter 7 trustees. Chapter 7 trustees play a critical role in the
bankruptcy system, ensuring that creditors recover as much as possible
from bankruptcy debtors. Chapter 7 trustees also ensure that the
government receives unpaid taxes, fines, and fees or whatever else it
may be owed during a bankruptcy case. In around 90 percent of the
cases, Chapter 7 trustees receive the statutory minimum payment for
their services, $60 per case. This rate was established in 1994 and has
never been permanently increased.
S. 3424 increases the pay per case by adjusting chapter 7 trustee
compensation for inflation since 1994 to $120. This change is long
overdue.
Mr. Speaker, I urge my colleagues to support this bipartisan
legislation, and I reserve the balance of my time.
{time} 1550
Mr. RASKIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of this bipartisan legislation,
which will help ensure that Americans have access to bankruptcy relief
when financial disaster strikes and they need it.
The legislation would increase compensation for chapter 7 trustees
for the first time in more than 30 years, extend vital temporary
bankruptcy judgeships, and ensure that our bankruptcy system continues
to be self-funded and poses no cost to the American taxpayer.
Chapter 7 proceedings are designed for people who are most in need of
financial relief. In chapter 7 bankruptcy, an individual debtor who has
fallen on hard times, rather than go to debtor prison, which was the
old-school method, can settle his or her debts, pay off back taxes,
stop further collection actions, and secure a fresh start.
The process is means-tested, so it is available only for those who
really need it, and it often comes with credit counseling and debtor
education courses that can help our constituents achieve financial
literacy and avoid bankruptcy a second time.
Nationwide, this process is overseen by trustees who help to
distribute millions of dollars annually to local, State, and Federal
Government agencies and private creditors of all types. In 1994,
Congress set the pay for trustees at $60 per case, and we have not
revisited that $60 pay rate in the decades since.
This bill would increase that paltry amount at long last. By doubling
their fee to $120, we help to ensure that debtors will have the
assistance they need to navigate the complicated and convoluted world
of bankruptcy proceedings.
The bill also extends 29 temporary bankruptcy judgeships that are set
to expire. In my State of Maryland alone, we are on track to lose three
out of seven temporary judgeships. That is nearly half of our entire
bankruptcy bench. We cannot afford to lose these judges at the very
moment that bankruptcy filings are rising everywhere, up 30 percent in
our State alone over the last couple of years.
Mr. Speaker, I strongly support this bill to increase the access and
opportunity provided to all Americans under the bankruptcy system. I
ask all of our colleagues to read it and to support it.
Mr. Speaker, I reserve the balance of my time.
Mr. CLINE. Mr. Speaker, I reserve the balance of my time.
Mr. RASKIN. Mr. Speaker, again, I restate my strong support for this
bipartisan legislation, and I yield back the balance of my time.
Mr. CLINE. Mr. Speaker, again, this important legislation promotes
efficient government rather than expanding it, reinforces user-funded
government services, strengthens accountability and oversight, and
reduces market distortions caused by uncertainty.
Mr. Speaker, I urge its support, and I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Cline) that the House suspend the rules
and pass the bill, S. 3424.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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