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Congress·Passed Senate·3 months ago

Congress raises Chapter 7 trustee pay and increases Chapter 11 quarterly fees to help fund bankruptcy courts

Also known as: Bankruptcy Administration Improvement Act of 2025

Legislative Progress

✓ Filed
✓ Review
✓ Senate
House
President

Impacts

Mixed Impacts(4)
Union Member
Neutral
Gig Worker
Neutral
Retiree
Neutral
Housing Assistance
Neutral
Positive Impacts(1)
Small Business Owner
Helps

Key Points

  • Raises the base pay for Chapter 7 bankruptcy trustees from $45 to $105 per case, aiming to better cover the work trustees do in most simple bankruptcies.
  • Keeps Chapter 7 filing fees the same and does not change courts’ power to waive filing fees for people who can’t afford them.
  • Increases certain ongoing fees paid in Chapter 11 business bankruptcies (the quarterly fees), helping keep the bankruptcy system funded without taxpayer money.
  • Extends several temporary bankruptcy judge positions from 5 years to 10 years so courts can better handle heavy and rising bankruptcy caseloads.
  • Sets when the changes start, with trustee-pay changes beginning after the next October 1 that follows the law’s enactment date.
Consumer ProtectionSmall BusinessEconomyCriminal Justice

Milestones

3 milestones5 actions
Dec 11, 2025House

Held at the desk.

Dec 11, 2025House

Received in the House.

Dec 10, 2025Senate

Introduced in the Senate, read twice, considered, read the third time, and passed without amendment by Unanimous Consent.

Dec 10, 2025

Passed/agreed to in Senate: Introduced in the Senate, read twice, considered, read the third time, and passed without amendment by Unanimous Consent.

Dec 10, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

First day of the calendar quarter on or after enactment

Chapter 11 quarterly fee changes start applying to pending and new Chapter 11 cases

Businesses already in Chapter 11 and those that file after enactment may see higher quarterly fees and should budget for them right away.

For any calendar quarter that begins on or after enactment

New quarterly-fee percentage applies to disbursements in quarters beginning after enactment

A Chapter 11 debtor’s fee bill can increase starting with the first quarter that begins after enactment, based on what the business pays out that quarter.

Applies to cases commenced on or after October 1 that first occurs after enactment

Higher Chapter 7 trustee per-case compensation begins for newly started Chapter 7 cases

If you file Chapter 7 after the trigger date, the trustee assigned to your case is paid under the new amounts, which may help keep trustee staffing stable. Your Chapter 7 filing fee is not changed by this bill.

Conversions to Chapter 7 in cases commenced on/after the first Oct 1 after enactment

Higher trustee compensation applies to cases converted into Chapter 7

If a Chapter 11, 12, or 13 case later converts to Chapter 7 after the trigger date, the trustee compensation rules follow the new amounts.

Fiscal years 2026 through 2031

Adjusted fee deposits continue through FY2031, including $5.4M/year to the general Treasury

The bankruptcy system’s fee money gets routed under the new rules for several years, helping fund trustees and the system while also sending a set amount to the Treasury each year.

First day of the calendar quarter on or after enactment

Temporary bankruptcy judge office extensions take effect

Bankruptcy courts can keep certain judge positions in place longer, which can help avoid delays from understaffing.

Related News

4 articles
Bloomberg Law·about 2 months ago

Bill Extending Bankruptcy Judgeships, Hiking Fees Heads to Trump

Covers House passage of S.3424 and the bill’s provisions: higher Chapter 7 trustee compensation, increased/extended Chapter 11 quarterly fees, and extending temporary bankruptcy judgeships.

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Bloomberg Law·3 months ago

Senate Passes Bill to Hike Chapter 7 Earnings, Extend Judgeships

Reports on the Senate’s unanimous passage of S.3424 and summarizes the key changes: Chapter 7 trustee pay increase, Chapter 11 fee changes, and temporary judgeship extensions.

C=
Republican Cloakroom (House schedule site)·about 2 months ago

Home - Republican Cloakroom (House floor schedule listing S.3424 under suspension on Jan. 12, 2026)

Lists S.3424 (Bankruptcy Administration Improvement Act of 2025) among items considered under suspension on Monday, Jan. 12, 2026—useful for tracking legislative movement.

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Source Information

Document Type

Congressional Bill

Official Title

Bankruptcy Administration Improvement Act of 2025

Bill NumberS 3424
Congress119th Congress
ChamberSenate
Latest ActionHeld at the desk.

Sponsor

Cosponsors

(3)
D: 1R: 2

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.