H.R. 3867 — Bankruptcy Administration Improvement Act of 2025

This section states congressional findings on the self-funding nature of the U.S. bankruptcy system; the essential role of chapter 7 trustees in administering cases and returning assets to creditors; the stagnation of trustee compensation at $60 per case ($45 under 11 U.S.C. §330(b)(1) and $15 under §330(b)(2)) since 1994 despite inflation (equivalent to over $125 today based on Consumer Price Index) and rises in other costs; a one-year pay increase in FY2021; and the effects of this Act in raising compensation to $120 per case, ensuring U.S. Trustee System Fund adequacy (including in non-trustee districts), and supporting existing bankruptcy judgeships without altering chapter 7 filing fees or fee waiver authority.

This section amends compensation and filing fee provisions applicable to chapter 7 bankruptcy cases as follows: (1) in 11 U.S.C. 330(b)(1), increases panel trustee compensation to $105 per case (from $45) and strikes subsection (e), which limited court awards of compensation; (2) directs deposit of the remainder of chapter 7 filing fees collected under 28 U.S.C. 1930(a)(1)(A) after panel trustee compensation under 11 U.S.C. 330(b)(1)—totaling $140 per case—into three special funds: $63.51 into the fund established under 28 U.S.C. 1931, $25.00 into the fund established under section 10101(b) of the Deficit Reduction Act of 2005 (28 U.S.C. 1931 note), and $51.49 into the United States Trustee System Fund (i.e., the fund that finances the U.S. Trustee Program, which administers bankruptcy cases); and (3) revises deposits into and transfers from the United States Trustee System Fund under 28 U.S.C. 589a by (A) setting deposits under subsection (b)(1) at 28.33% of fees collected under 28 U.S.C. 1930(a)(1)(B) (i.e., filing fees for chapter 11 cases and certain other cases); and (B) in subsection (f)(1), which governs excess balance transfers to the Treasury, changing a reference from "Fourth" to "Second," striking subparagraphs (B) and (C), and redesignating subparagraph (D) as subparagraph (B).

This section modifies quarterly fees for chapter 11 debtors under 28 U.S.C. § 1930(a)(6)(B) and their deposits as follows: (1) in clause (i), revises the period reference to “10-year” (from “5-year”); (2) in clause (ii)(II), increases the fee rate to 1.1% (from 0.8%); (3) extends the deposit period in 28 U.S.C. § 589a(f) to 2031 (from 2026); and (4) for FY2026 through 2031, notwithstanding § 589a(b), requires fees collected under § 1930(a)(6)—less $5.4 million deposited annually to the general fund of the Treasury—to be deposited as specified in amended § 589a(f). (Quarterly fees support the U.S. Trustee Program, which oversees bankruptcy administration.)

This section extends the terms of temporary bankruptcy judgeships authorized by the Bankruptcy Administration Improvement Act of 2020 and the Bankruptcy Judgeship Act of 2017 to 10 years (from 5 years). (Thus, these additional judgeships—created to address bankruptcy caseload needs in specified districts—will remain in effect for twice as long before reverting to permanent levels under 28 U.S.C. 152.)

This section establishes October 1 following the date of enactment as the effective date for the amendments made by the Act, subject to exceptions. The amendments made by section 3 (officer compensation) apply to bankruptcy cases (i.e., under title 11, U.S. Code) commenced on or after such date under chapter 7 or converted to chapter 7 from chapter 11, 12, or 13. The amendments made by section 4 (bankruptcy fees) apply to chapter 11 cases pending on or after such date and to quarterly fees under 28 U.S.C. §1930(a)(6) for disbursements made in calendar quarters beginning on or after such date.