Sponsors (13)
Introduced June 10, 2025 by Benjamin Cline · Last progress June 10, 2025
The bill strengthens trustee compensation and stabilizes funding and staffing for bankruptcy administration—improving court capacity and predictability—but does so by reallocating and increasing fee revenues, which raises costs for bankruptcy users, shifts dedicated funds to the general fund, and introduces administrative and transitional uncertainties.
Bankruptcy trustees (Chapter 7 trustees) will receive higher statutory compensation and clearer compensation rules, improving trustee retention and capacity so more bankrupt estates can be administered and assets returned to creditors (including IRS, small businesses, hospitals).
Funding and fee allocation for the U.S. Trustee System and bankruptcy administration is made more predictable (set dollar shares and standardized percentages), helping budgeting, oversight, and stable court operations nationwide.
Extends temporary bankruptcy judgeship terms (from 5 to 10 years), increasing continuity, institutional knowledge, and improved case management while reducing frequency of appointment processes and related administrative time/costs.
Bankruptcy users (debtors and creditors) may face higher fees or shifted fee burdens to fund the Trustee System and allocations, increasing costs for small businesses, individual filers, and estate stakeholders and possibly reducing distributions to creditors.
Diverting dedicated bankruptcy-fee revenue (including the $5.4M annual transfer) to the Treasury general fund reduces funds available for fee-funded court services and may decrease transparency about how fees are used or pressure other budgets if services lose dedicated funding.
Changes to fee allocations, repeal/revision of statutory compensation language, and textual cross-references create implementation uncertainty and could produce transitional administrative burdens or litigation over fee awards and compensation.
Based on analysis of 6 sections of legislative text.
Doubles chapter 7 trustee pay to $120, reallocates bankruptcy fee deposits among federal funds, extends temporary judgeship terms to 10 years, and adjusts fee deposit rules for 2026–2031.
Raises the standard pay that chapter 7 trustees receive and changes how several bankruptcy filing and quarterly fees are split among federal funds that support bankruptcy courts, United States trustees, and related programs. It also lengthens temporary bankruptcy judgeship terms from five years to ten years and sets specific deposit rules for certain fees for fiscal years 2026–2031. The bill keeps the debtor filing fee unchanged and preserves courts’ ability to waive filing fees for low-income filers. Most changes take effect on the first October 1 after enactment and apply to cases and quarterly fee periods on or after that date.