119th Congress (2025-2026)

HR 3867

Bankruptcy Administration Improvement Act of 2025

Introduced

Jurisdiction

US Congress

Session

119th Congress (2025-2026)

Official source

Chamber

House

Session

119th Congress (2025-2026)

Jurisdiction

US Congress

Bill overview

The Bankruptcy Administration Improvement Act of 2025 aims to increase compensation for bankruptcy trustees who administer chapter 7 cases, extend the terms of temporary bankruptcy judge offices, and adjust bankruptcy fees. The bill seeks to address concerns about inadequate trustee pay, which has remained at $60 per case since 1994, and to ensure adequate funding for the bankruptcy system. It also extends the terms of temporary bankruptcy judge positions and modifies fee structures to support the ongoing operation of the bankruptcy courts.

Key provisions

Increases trustee compensation to $120 per case.
Adjusts fees collected under chapter 7 of title 11, United States Code, including quarterly fees.
Extends the terms of temporary offices for bankruptcy judges to 10 years.
Modifies the distribution of fees collected to support the United States Trustee System Fund and the general fund.
Extends the period for deposits of certain fees to 2031.
Increases the percentage of fees allocated to the United States Trustee System Fund.
Adjusts filing fee structures for chapter 7 cases.
Extends the terms of bankruptcy judge appointments to 10 years.

Who is affected

Bankruptcy Trustees
Bankruptcy Judges
Individuals Filing for Bankruptcy
Creditors (including medical providers, unsecured creditors, and small businesses)
The Federal Government (through agencies like the IRS and SBA)

Notable changes

Positions across the country

No public positions recorded for this legislation.

Arguments in favor

Reasons to support this legislation.

No arguments in favor have been submitted.

Submit yours

Arguments opposed

Reasons to oppose this legislation.

No arguments opposed have been submitted.

Submit yours

Legislative history

2025-06-10House

Referred to the House Committee on the Judiciary.

2025-06-10

Introduced in House

2025-06-10

Introduced in House

Read the latest version inline or switch to a previous version.

Jun 10, 2025XMLView source

119th CONGRESS — 1st Session

H. R. 3867

IN THE HOUSE OF REPRESENTATIVES

A BILL

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.

1.Short title

This Act may be cited as the

Bankruptcy Administration Improvement Act of 2025

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.

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 feesNotwithstanding 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), by striking paragraph (1) and inserting the following:

(1)

28.33 percent of the fees collected under section 1930(a)(1)(B);

; 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).

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)(II), by striking 0.8 and inserting 1.1.

(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.

5.Extension of term of certain temporary offices of bankruptcy judge

(a)Bankruptcy Administration Improvement Act of 2020Section 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 2017Section 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’ ’.

6.Effective date; application of amendments

(a)In generalExcept as provided in paragraph (2), the amendments made by this Act shall take effect on October 1 that first occurs 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 7, United States Code.

(2)Bankruptcy fees

Section 4 and the amendments made by section 4 shall apply to—

(A)any case pending under chapter 11 of title 11, United States Code, on or after October 1 that first occurs after the date of enactment of this Act; and

(B)quarterly fees payable under section 1930(a)(6) of title 28, United States Code, for disbursements made in any calendar quarter that begins on or after October 1 that first occurs after the date of enactment of this Act.

HR 3867

Bill overview

Key provisions

Who is affected

Notable changes

Sponsors

Primary sponsor

Cosponsors

Positions across the country

Arguments in favor

Arguments opposed

Bill text

Positions across the country