Bankruptcy Threshold Adjustment and Technical Corrections Act Signed on June 21, 2022

On June 21, 2022, the President signed into law the Bankruptcy Threshold Adjustment and Technical Corrections Act (BTATC) (Public Law Number 117-151). The major aspects of the law include:

1. Extends, for two years, the increase of the amount of debt (up to $7,500,000) allowed to be carried by debtors to qualify for small business reorganization under subchapter V. This applies retroactively to cases commenced on or after March 27, 2022 and for pending cases (as of June 21, 2022) commenced on or after March 27, 2020 through June 21, 2022.

2. Increases, for two years, the debt limit for individuals filing for bankruptcy under Chapter 13 to $2,750,000 and allows both secured and unsecured debt to count towards this single limit (effective June 21, 2022).

Official Bankruptcy Form 101 Voluntary Petition for Individuals Line 13 and Official Form 201 Voluntary Petition for Non-Individuals Line 8 have been revised to reflect changes as a result of the Act.