Sponsors (13)
The bill reallocates and fixes bankruptcy-fee revenue and lengthens temporary judges' terms to provide predictable funding and institutional continuity for the bankruptcy system, but it raises costs for filers, reduces funding flexibility for other programs, and creates legal and administrative risks that could harm some trustees, courts, and service providers.
Federal bankruptcy administrators, trustees, and court budgets gain more predictable, dedicated funding because the bill redirects specific shares of filing fees (including 28.33% of certain Chapter 11 fees) and applies statutory deposit rules for FY2026–FY2031.
Temporary bankruptcy judges and the bankruptcy courts benefit from longer continuity and reduced turnover because temporary judge terms are extended from 5 to 10 years and some judgeships are preserved.
Bankruptcy trustees and parties to bankruptcy cases face simpler compensation and fee allocations because the bill removes a disputed trustee compensation subsection and establishes clearer fee splits, which should reduce related litigation and disputes.
Individuals and businesses who use the bankruptcy system will likely pay higher fees or professional compensation, increasing filing costs and potentially reducing recoveries for creditors.
Ambiguous or garbled statutory language and unspecified replacement text raise the risk of litigation, administrative confusion, and implementation delays for courts, trustees, and the Treasury.
Reallocating filing-fee pools into fixed shares reduces flexibility and could cut or eliminate funding that previously went to courts, state programs, or nonprofits that rely on transfers from those fees.
Based on analysis of 6 sections of legislative text.
Increases chapter 7 trustee pay, reallocates bankruptcy-fee revenues between specified funds and the Trustee System, and extends certain temporary bankruptcy-judge terms from 5 to 10 years.
Introduced June 10, 2025 by Benjamin Cline · Last progress June 10, 2025
Raises pay for chapter 7 trustees, reallocates how bankruptcy filing and quarterly fees are split among court-related funds and the United States Trustee System, and lengthens certain temporary bankruptcy judgeship terms from five to ten years. It also sets new deposit rules for several fiscal years and makes these changes effective on the first October 1 following enactment, with the trustee-pay and fee provisions applying to cases filed, converted, pending, or with disbursements on or after that date as specified.