AIRA Membership Alerts:

President Biden signs HR 1651, the COVID–19 Bankruptcy Relief Extension Act of 2021

Published: 03/30/2021

On Saturday, March 27, 2021, President Biden signed the legislation which extends provisions of last year’s CARES Act that were set to expire on the same day.

As outlined by the American Bankruptcy Institute in their release on March 29, 2021, the key bankruptcy provisions extended to March 27, 2022 include:

  • The increased eligibility threshold of the Small Business Reorganization Act of 2019 (SBRA) for businesses filing under subchapter V of chapter 11 of the U.S. Bankruptcy Code from $2,725,625 of debt to $7,500,000.
  • Amending the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.
  • Clarifying that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.
  • Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.

Senators Durbin, Grassley Introduce Bipartisan Legislation to Extend CARES Act Bankruptcy Relief Provisions

Published: 03/05/2021

On February 25, 2021, amid the ongoing COVID-19 pandemic, U.S. Senate Democratic Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senator Chuck Grassley (R-IA), Ranking Member of the Senate Judiciary Committee, introduced the COVID-19 Bankruptcy Relief Extension Act, bipartisan legislation to temporarily extend COVID-19 bankruptcy relief provisions enacted as part of the March 2020 CARES Act and December 2020 omnibus appropriations bill to March 27, 2022.

AIRA supports this legislation and further asked the Senate Committee on the Judiciary to undertake consideration making permanent a higher threshold for smaller businesses to qualify for Subchapter V bankruptcy.

See a copy of the letter AIRA sent to Senators Durbin and Grassley on March 5, 2021.


“Bankruptcy Administration Improvement Act of 2020” amends US Trustee Chapter 11 Quarterly Fee Requirements

Published: 1/13/2021

Tuesday, January 12, 2021, President Trump signed into law S.4996, “Bankruptcy Administration Improvement Act of 2020.” Among other provisions, the new law replaces the existing schedule of quarterly US Trustee fees.

The current fee schedule, with seven (7) tiers ranging from a minimum of $325 to $4,875 for quarterly disbursements of up to $999,999.99 and one percent (1%) for disbursements of $1 million or more not to exceed $250,000, is replaced by a two (2) tier schedule: (i) .4% of disbursements that total less than $1 million with a minimum payment of $250, and (ii) .8% of disbursements of $1 million or more, not to exceed $250,000 per quarter.

For a hypothetical debtor with quarterly disbursements of $1 million, payments under the revised schedule are reduced from $10,000 to $8,000 per quarter.

The Act also contains provisions establishing a “Chapter 7 Trustee Fund” and extends the temporary office of bankruptcy judges in certain judicial districts.

The amendments to the quarterly fee schedule apply to any case pending as the date of enactment for disbursements made in any calendar quarter that begins on or after the date of enactment. Accordingly, the new fee schedule applies to disbursements for the calendar quarter beginning on April 1, 2021. These provisions sunset at the end of the fiscal year 2026.

Access the Act Here»


Consolidated Appropriation Act amends the Bankruptcy Code

Published: 1/6/2021

As year-end approached, the Consolidated Appropriation Act ("CAA") was signed into law. Federal government funding, COVID-related relief, and not to be overlooked, amendments to the Bankruptcy Code are all part of the CAA. The Bankruptcy Code amendments sunset in either one or two years but they are relevant in the here and now. The nine provisions amending the Bankruptcy Code cover the following topics:

  1. PPP loans to debtors (or trustees)
  2. Chapter 13 discharge available even if certain plan payments have not been made
  3. No discrimination because of bankruptcy filing
  4. CARES forbearance claims; modification of Chapter 13 plan
  5. Extend time for performance under an unexpired non-residential real property lease in a Subchapter V case
  6. Extend time to assume or reject an unexpired non-residential real property lease
  7. Preferences
  8. Utilities
  9. Customs duties

The accompanying Thompson Coburn “Credit Report” provides an concise overview on each of these topics.

Thompson Coburn "Credit Report" »

AIRA thanks Dave Warfield and his colleagues at Thompson Coburn for allowing AIRA to share this analysis with the Membership.


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AIRA Working for Reform

AIRA and its members have made significant contributions to legislative issues and the development of professional standards impacting the bankruptcy practice field.

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