Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Diane Davis
March 24 — Automatic adjustments will be made April 1 to increase dollar amounts stated in various provisions of the Bankruptcy Code, one provision in Title 28, seven Official Bankruptcy Forms that contain adjusted amounts, the Instructions for Individual and Non-Individual Debtors, two Director's Forms that include dollar amounts, and one set of instructions for a Director's Form, which includes a dollar amount, according to the Administrative Office of the U.S. Courts (AOUSC). The adjustments will apply to cases filed on or after April 1, 2016.
The affected forms are Official Forms 106C, 107, 122A-2, 122C-2, 201, 207, and 410 and Director’s Forms 2000 and 2830. Prior to the April 1, effective date, the revised forms will be available on the pending bankruptcy forms page of the Judiciary’s website at http://www.uscourts.gov/ rules-policies/pending-rules-amendments/pending-changes-bankruptcy-forms. Once effective, the revised forms will be available on the bankruptcy forms page at http://www.uscourts.gov/ forms/bankruptcy-forms.
Under Bankruptcy Code Section 104(a), the Judicial Conference of the United States makes an automatic three-year adjustment of dollar amounts on the basis of the change in the Consumer Price Index for the most recent three-year period ending immediately before the year in which the adjustment is made and rounded to the nearest $25. The Conference delegated that authority to the AOUSC. The revised dollar amounts were published Feb. 22, on page 8,748 in the Federal Register (81 Fed. Reg. 8,748 (Feb. 22, 2016).
Debt limits for individuals filing bankruptcy under Chapter 13 in Section 109(e) are being adjusted from noncontingent, liquidated, unsecured debts of less than $383,175, and noncontingent, liquidated, secured debts of less than $1,149,525 to noncontingent, liquidated, unsecured debts of less than $394,725, and noncontingent, liquidated, secured debts of less than $1,184,200.
The definition of a small business debtor under Section 101(51D) has been adjusted from aggregate noncontingent liquidated secured and unsecured debts as of the date of the petition or the date of the filing of the order for relief in an amount not more than $2,490,925 to $2,566,050.
Under Section 303(b), the minimum aggregate claims needed for the commencement of an involuntary Chapter 7 or Chapter 11 petition has been adjusted from three or more entities at $15,325, to $15,775, and if there are fewer than 12 holders of a claim, from $15,325 to $15,775.
The definition of a family farmer under Section 101(18) has been adjusted from aggregate debts that do not exceed $4,031,575 to $4,153,150.
Other adjustments to the Code include the following Sections:
Bankruptcy Code changes to 28 U.S.C. §1409(b), Venue of proceedings arising under Title 11 or arising in or related to cases under Title 11, include the following: A trustee may commence a proceeding arising in or relating to a case to recover
Questions about the adjusted dollar amounts should be directed to Michele Reed of the Judicial Services Office at (202) 502-1800, or by email at Judicial_Services_Office@ao.uscourts.gov.
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Once effective, the revised forms will be available at: http://www.uscourts.gov/ forms/bankruptcy-forms
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