SECTION 1. Short Title.
This Act may be cited as the “Bankruptcy Threshold Adjustment and Technical Corrections Act”.
Bankruptcy Threshold Adjustment and Technical Corrections Act
An Act
To amend title 11, United States Code, to modify the eligibility requirements for a debtor under chapter 13, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SEC. 2. Bankruptcy Amendments.
Definition of Small Business Debtor.— Section 101(51D)(B) of title 11, United States Code, is amended—
in clause (i), by inserting “ under this title” after “ affiliated debtors”; and
in clause (iii), by striking “ an issuer” and all that follows and inserting “ a corporation described in clause (ii).”.
in subsection (a), by inserting “ 1182(1),” after “ 707(b),”; and
in subsection (b), by inserting “ 1182(1),” after “ 707(b),”.
Who May Be a Debtor Under Chapter 13.— Section 109 of title 11, United States Code is amended by striking subsection (e) and inserting the following:
“(e) Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated debts of less than $2,750,000 or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated debts that aggregate less than $2,750,000 may be a debtor under chapter 13 of this title.”
Definition of Debtor.— Section 1182(1) of title 11, United States Code, is amended to read as follows:
“(1) Debtor.—The term ‘debtor’—
“(A) subject to subparagraph (B), means a person engaged in commercial or business activities (including any affiliate of such person that is also a debtor under this title and excluding a person whose primary activity is the business of owning single asset real estate) that has aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the petition or the date of the order for relief in an amount not more than $7,500,000 (excluding debts owed to 1 or more affiliates or insiders) not less than 50 percent of which arose from the commercial or business activities of the debtor; and
“(B) does not include—
“(i) any member of a group of affiliated debtors under this title that has aggregate noncontingent liquidated secured and unsecured debts in an amount greater than $7,500,000 (excluding debt owed to 1 or more affiliates or insiders);
“(ii) any debtor that is a corporation subject to the reporting requirements under section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)); or
“(iii) any debtor that is an affiliate of a corporation described in clause (ii).”
by striking “ possession, perform” and inserting
“(A) perform”
in subparagraph (A), as so designated—
by striking “ , including operating the business of the debtor”; and
by adding “ and” at the end; and
by adding at the end the following:
“(B) be authorized to operate the business of the debtor;”
Confirmation of Plan.— Section 1191(c) of title 11, United States Code, is amended by striking paragraph (3) and inserting the following:
“(3)
(A) The debtor will be able to make all payments under the plan; or
“(B)
(i) there is a reasonable likelihood that the debtor will be able to make all payments under the plan; and
“(ii) the plan provides appropriate remedies, which may include the liquidation of nonexempt assets, to protect the holders of claims or interests in the event that the payments are not made.”
Technical Corrections to the Bankruptcy Administration Improvement Act.— Section 589a of title 28, United States Code is amended—
in subsection (c) by striking “ subsection (a)” and inserting “ subsections (a) and (f)”; and
in subsection (f)(1)—
in the matter preceding subparagraph (A), by striking “ subsections (b) and (c)” and inserting “ subsection (b)(5)”; and
in subparagraph (A), by inserting “ needed to offset the amount” after “ amounts”.
Effective Date; Applicability.—
In general.— Subsections (b) and (c) and the amendments made by subsections (b) and (c) shall take effect on the date of enactment of this Act.
Retroactive application of certain amendments.— The amendments made by subsections (a), (d), (e), and (f) shall apply with respect to any case that—
is commenced under title 11, United States Code, on or after March 27, 2020; and
with respect to a case that was commenced on or after March 27, 2020 and before the date of enactment of this Act, is pending on the date of enactment of this Act.
Effective date of technical corrections to baia.— The amendments made by subsection (g) shall take effect as if enacted on October 1, 2021.
Sunsets.—
In general.— Effective on the date that is 2 years after the date of enactment of this Act—
subsection (e) of section 109 of title 11, United States Code is amended to read as such subsection read on the day before the date of enactment of this Act; and
section 1182(1) of title 11, United States Code, is amended to read as follows:
“(1) Debtor.—The term ‘debtor’ means a small business debtor.”
Amounts.— For purposes of applying subsection (e) of section 109 of title 11, United States Code, as amended by paragraph (1)(A), the amounts specified in such subsection shall be the amounts that were in effect on the day before the date of enactment of this Act.