Bankruptcy Administration Improvement Act of 2025
Summary
The Bankruptcy Administration Improvement Act of 2025 aims to amend titles 11 and 28 of the United States Code. It focuses on modifying compensation for chapter 7 bankruptcy trustees, extending the terms of temporary bankruptcy judge offices, and adjusting bankruptcy fees. The bill seeks to ensure the bankruptcy system remains self-supporting without burdening taxpayers.
Expected Effects
The act will likely increase the compensation of chapter 7 bankruptcy trustees to $120 per case. It will also extend the terms of certain temporary bankruptcy judgeships by five years. Furthermore, it adjusts bankruptcy fees and modifies deposit procedures into the United States Trustee System Fund.
Potential Benefits
- Increased compensation for chapter 7 bankruptcy trustees, potentially improving their performance and dedication.
- Extension of temporary bankruptcy judgeships, ensuring continuity and reducing caseload backlogs.
- Adjustments to bankruptcy fees, aiming to maintain a self-supporting bankruptcy system.
- Continued authority for courts to waive filing fees for indigent individuals, preserving access to bankruptcy relief.
- Allocation of funds to government creditors and private creditors through the work of chapter 7 trustees.
Potential Disadvantages
- Increased fees in some areas could place a slightly higher burden on certain filers, particularly in chapter 11 cases.
- The Act deposits $5,400,000 of fees into the general fund of the Treasury for fiscal years 2026 through 2031, potentially reducing funds available for the bankruptcy system itself.
- The complexity of fee adjustments and fund allocations may create administrative challenges.
- Potential for unintended consequences due to changes in fee structures and deposit procedures.
- The Act does not address broader issues within the bankruptcy system beyond trustee compensation and judgeship terms.
Constitutional Alignment
The Bankruptcy Administration Improvement Act of 2025 appears to align with the Constitution, particularly Article I, Section 8, Clause 4, which grants Congress the power to establish uniform laws on the subject of bankruptcies throughout the United States. The act modifies existing bankruptcy laws and fee structures, which falls within this constitutional authority. The bill does not appear to infringe on any individual rights or liberties protected by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).