By Donald L. Swanson

H.R. 9154 is an important-and-new bill in the U.S. Congress. 

It was “Introduced” in the U.S. House of Representatives on July 25, 2024, and promptly “Referred to the House Committee on the Judiciary.”

H.R. 9154 is titled, “Bankruptcy Administration Improvement Act of 2024,” and is designed to “modify the compensation payable to trustees serving in cases under chapter 7” of the Bankruptcy Code. 

It proposes to do so by increasing the baseline compensation for chapter 7 trustees from $60 per case to $120 per case.

Why Needed & Intent

Here is a condensed version of the reasons H.R. 9154 gives for why it is needed.

1. Congress wants the bankruptcy system to be self-supporting, with costs of the system fairly allocated among those who use the system.
2. Congress has established fees, including filing fees and quarterly fees in chapter 11 cases, that fund the bankruptcy courts, judges, U.S. trustees, and Chapter 7 trustees.
3. Chapter 7 trustees are vital to the bankruptcy system, providing services at the front lines by administering thousands of cases.
4. Chapter 7 trustees provide valuable returns of assets:
   
   • to government creditors including the IRS, Dept. of Agriculture, SBA, and other Federal, State, and municipal governments; and
   • to private creditors of all types, including medical providers, unsecured creditors, small businesses, and micro-enterprises.
5. Yet, the amount of compensation paid to Chapter 7 trustees has not increased since 1994 — since 1994, they’ve received only $60 per case ($45 from subsection 330(b)(1), and $15 from subsection 330(b)(2)) in nearly 90% of chapter 7 cases, and they receive no compensation at all for cases where the filing fee is waived by the Bankruptcy Court.
6. Despite significant increases in costs (including filing fees) associated with chapter 7 bankruptcies since 1994, the $60 paid to chapter 7 trustees has remained unchanged—and based on CPI estimates, the $60 of in 1994 would be the equivalent of over $125 today.

And here is the statement of Congressional intent contained within H.R. 9154: This Act is intended to increase the compensation of chapter 7 bankruptcy trustees to $120 per case and to index that amount for future inflation—without altering:

• the chapter 7 filing fee; or  
• the authority of the courts to waive the payment of filing fees by indigents.

Conclusion

H.R. 9154 is a much-needed fix to the bankruptcy law.

So, here’s hoping H.R. 9154 has a quick and happy trip through Congress toward enactment as a law of these United States.

** If you find this article of value, please feel free to share. If you’d like to discuss, let me know.