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119-s-3424119th CongressWALLET

Bankruptcy Administration Improvement Act of 2025

Sponsored By: Senator Coons, Christopher A. [D-DE]

Became Law

Summary

This law focuses on raising Chapter 7 trustee compensation to create a steadier, per-case funding system for bankruptcy administration. It also reallocates fee receipts and extends temporary bankruptcy judgeships to keep courts staffed for growing caseloads.

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  • Chapter 7 trustees will receive higher per-case pay capped at about $120, changing how trustee compensation is calculated and paid.
  • The United States Trustee System Fund is moved from a percentage split to a fixed per-case amount of $51.49 to stabilize its revenue. Remaining fee receipts are rerouted to a Treasury special fund and the Deficit Reduction Fund to support the overall funding mix.
  • Temporary bankruptcy judge positions and related authorizations are extended by 10 years, and the law phases in changes to avoid disrupting ongoing cases while preserving indigent filing fee waivers.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 1 benefits, 0 costs, 3 mixed.

Longer terms for bankruptcy judges

The law extends several “5‑year” periods to “10 years,” including temporary bankruptcy judge positions. Judge‑term changes start on the first day of the calendar quarter after enactment. It also sets start dates for other sections: most changes begin the next quarter; trustee‑pay and fee‑split rules apply to cases that start on or after the October 1 after enactment; and the Chapter 11 fee edits apply to cases pending or starting in that next quarter and to disbursements in later quarters.

Bankruptcy funding rules through 2031

Each year from FY2026 to FY2031, $5.4 million of Chapter 11 quarterly fees goes to the Treasury’s general fund. The law also changes key United States Trustee System Fund dates from 2026 to 2031, keeping current funding rules in place longer. These shifts change how fee money supports the program, not the fee amounts you pay directly.

Higher trustee pay and new fee split

The law raises Chapter 7 trustee base pay to $105 per case (up from $45). After trustee pay, per‑case fees are split as $63.51 to a Treasury special fund, $25.00 to the Deficit Reduction Fund, and $51.49 to the U.S. Trustee System Fund. These rules apply to cases that start on or after the October 1 that follows enactment, including cases converted to Chapter 7.

New formula for Chapter 11 fees

The law updates how quarterly U.S. Trustee fees are set in Chapter 11 cases. It uses a 10‑year reference instead of 5 years, adds “the greater of” before 0.4, switches “and” to “or,” and raises a threshold from 0.8 to 0.9. It applies to Chapter 11 cases pending or starting in the first calendar quarter after enactment, and to disbursements in quarters that begin after enactment.

Sponsors & CoSponsors

Sponsor

Coons, Christopher A. [D-DE]

DE • D

Cosponsors

  • Sen. Graham, Lindsey [R-SC]

    SC • R

    Sponsored 12/10/2025

  • Sen. Booker, Cory A. [D-NJ]

    NJ • D

    Sponsored 12/10/2025

  • Sen. Blackburn, Marsha [R-TN]

    TN • R

    Sponsored 12/10/2025

Roll Call Votes

No roll call votes available for this bill.

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