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:
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.
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.
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:
The accompanying Thompson Coburn “Credit Report” provides an concise overview on each of these topics.
AIRA thanks Dave Warfield and his colleagues at Thompson Coburn for allowing AIRA to share this analysis with the Membership.
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