The Bankruptcy Administration Improvement Act of 2020 (S. 4996), signed into law on January 12, 2021, clearly anticipates a rise in bankruptcy filings for 2021. In anticipation of the expected increase in business and Chapter 7 bankruptcies from the impact of COVID-19, the bill addresses three issues.

First, it increases the fees for Chapter 7 Trustees.

Secondly, quarterly fees payable to The United States trustee for Chapter 11 are reduced to .4 percent of $250 for each quarter, in which disbursements are less than $1,000,000 and .8 percent capped at $250,000 for quarterly distribution over $1,000,000.

The final issue addressed is the extension of the temporary office of bankruptcy judges maintaining the seven temporary positions in Delaware, recognizing the judiciary’s burden for a large number of complex Chapter 11 bankruptcies.

In addition, temporary judgeships in the Eastern District of Michigan, the Southern District of Florida, the District of Maryland, the District of Nevada, the Eastern District of North Carolina, the District of Puerto Rico, the Eastern District of Virginia, the Southern District of Georgia, the District of New Jersey, the Northern District of New York, and the District of South Carolina have also been extended. The act’s provisions are applicable for a five-year term only.

To read the bill text click here.