Bankruptcy Threshold Adjustment & Technical Corrections Act Raises Debt Limit in Subchapter V and Chapter 13 Cases
On June 21, 2022, the President signed into law the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”), Pub. L. No. 117-151, the full text of which can be viewed here (link is external). Among other things, the Act restores the debt threshold in cases filed under Subchapter V of Chapter 11 to $7,500,000. In Chapter 13 cases, the debt threshold is increased to $2,750,000, and the distinction between secured and unsecured debt amounts for purposes of determining eligibility to be a debtor has been removed. The increases in the debt thresholds will expire two years after the Act’s enactment date. Please review the full text of the Act for further details.
The passage of the Act has resulted in modifications to Official Form 101 (voluntary petition for individuals) and Official Form 201 (voluntary petition for non-individuals). Further details regarding the modifications can be found here.
On August 29, 2022, the Court entered General Order 2022-02 to extend the adoption of Interim Bankruptcy Rule 1010 consistent with the Act.