On June 21, 2022, the Bankruptcy Threshold Adjustment and Technical Corrections Act was signed into law. The Act amends Section 1182(1) of the Bankruptcy Code to include the increased aggregate debt limit of $7.5 million in Subchapter V’s definition of a “debtor” (with a two-year sunset from enactment). The Act also applies retroactively to all cases commenced under Chapter 11 filed on or after March 27, 2020, that remain pending as of the date of enactment.
Additionally, the Act also provides that an individual with regular income is eligible to be a debtor under Chapter 13 if the individual owes noncontingent, liquidated debts of less than $2.75 million as of the date of the petition. This provision will also sunset two years from enactment.
The Official Bankruptcy Forms listed below have been revised to conform to the Act, effective June 21, 2022:
Official Form 101, Voluntary Petition for Individuals (revises line 13 – The Act reinstates the definition of “debtor” for determining eligibility to proceed under subchapter V of chapter 11 that was in effect from March 27, 2020 through March 27, 2022, under the CARES Act, as amended)
Official Form 201, Voluntary Petition for Non-Individuals (revises line 8 - The Act reinstates the definition of “debtor” for determining eligibility to proceed under subchapter V of chapter 11 that was in effect from March 27, 2020, through March 27, 2022, under the CARES Act, as amended).
Please ensure your bankruptcy software, if applicable, is updated with the most recent versions of these forms.
For more information, visit the U.S. Courts website at https://www.uscourts.gov/rules-policies/pending-rules-and-forms-amendments/pending-and-recent-changes-bankruptcy-forms.