Automatic Adjustment of Certain Dollar Amounts in Bankruptcy Code

Tuesday, March 12, 2019

On April 1, 2019, automatic adjustments to the dollar amounts stated in various provisions of the Bankruptcy Code will go into effect. The adjusted dollar amounts will apply to cases filed on or after April 1, 2019. The relevant provisions governing the timing and calculation of the adjustments are codified in 11 U.S.C. § 104(a). The adjusted dollar amounts will affect, among other things:

 

  • The eligibility of a debtor to file under chapters 12 and 13;
  • The definition of a small business debtor;
  • Certain maximum values that a debtor may claim as exempt;
  • The maximum amount of certain claims entitled to priority;
  • The calculation of the means test for chapter 7 debtors;
  • The minimum aggregate value of claims needed to commence an involuntary bankruptcy case;
  • The minimum value for trustee avoidance actions; and
  • The value of “luxury goods and services” deemed to be nondischargeable where the trustee may commence certain proceedings to recover a money judgment or property.

 

On February 12, 2019, the adjusted dollar amounts were published in volume 84, number 29, of the Federal Register, at pages 3,488-89. Seven Official Forms and two Director’s Forms contain references to several of the affected dollar amounts:

 

  • Official Form 106C, Schedule C;
  • Official Form 107, SOFA for Individuals;
  • Official Form 122A-2, Chapter 7 Means Test Calculation;
  • Official Form 122C-2, Chapter 13 Calculation of Your Disposable Income;
  • Official Form 201, Voluntary Petition for Non-Individuals;
  • Official Form 207, SOFA for Non-Individuals;
  • Official Form 410, Proof of Claim
  • Director’s Form 2000, Required Lists, Schedules, Statements, and Fees; and
  • Director’s Form 2830, Chapter 13 Debtor’s Certification Regarding Domestic Support Obligations and Section 522(q).

 

The revised forms will be effective on April 1, 2019, and will apply to cases filed on or after that date.