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New Bankruptcy Law and Updated Forms

Friday, June 24, 2022

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 Chapter 11 Subchapter V’s definition of a “debtor” with a two-year sunset from enactment. The Act applies this definition change retroactively to all cases filed on or after March 27, 2020, including those 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 also sunsets two years from enactment.

To conform to the definition changes, the following Official Bankruptcy Forms have been revised and you should start using them immediately:

Official Form 101, Voluntary Petition for Individuals (revises line 13)

Official Form 201, Voluntary Petition for Non-Individuals (revises line 8).

These forms are now available on the U.S. Courts website. Please ensure your bankruptcy software, if applicable, is updated with the most recent versions of these forms.