Adjustment to Bankruptcy Amounts Effective April 1, 2007

Us_law

Effective for cases filed on or after April 1, 2007, are increases in certain dollar amounts specified in the Bankruptcy Code and Title 28 of the United States Code. The Bankruptcy Reform Act of 1994, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, provides for the automatic adjustment of these dollar amounts at three-year intervals. The adjustments reflect changes in the Consumer Price Index.

The dollar adjustments relevant to business bankruptcy statutory provisions are as follows:

11 U.S.C. Section 547(c)(9) raises from $5,000 to $5,475 the minimum amount of property under which a trustee may not avoid a preferential transfer in a case filed by a debtor whose debts are not primarily consumer debts.

28 U.S.C. Section 1409 raises from $10,000 to $10,950 the minimum debt amount for a trustee to commence suit in a jurisdiction to collect a claim against a non-insider in a district court other than the district in which the defendant resides.

11 U.S.C. Section 101(51D) raises from $2,000,000 to $2,190,000 the maximum amount of aggregate non-contingent liquidated secured and unsecured debts a debtor may have to be considered a "small business debtor."

11 U.S.C. Section 303(b) raises from $12,300 to $13,475 the aggregate amount of non-contingent, undisputed claims necessary to file an involuntary Chapter 7 or 11 petition under Section 303.

11 U.S.C. Section 507(a)(4) raises from $10,000 to $10,950 the allowed unsecured claim priority amount for each individual or corporation earned within 180 days before the petition date or date of the cessation of the debtor’s business, whichever occurs first, for wages, salaries, or commissions; or sales commission earned under certain conditions.

11 U.S.C. Section 507(a)(5) raises from $10,000 to $10,950 the multiplier used to calculate the allowed unsecured claim priority for certain contributions to employee benefit plans.

A list of all the adjustments/increases can be obtained from the Administrative Office of the U.S. Courts.
Source: Bruce Nathan, Esq., Lowenstein Sandler PC

Leave a Reply

Your email address will not be published. Required fields are marked *