Bankruptcy Administration Improvement Act of 2020 Signed Into Law

Alexandria, Va. — President Donald J. Trump yesterday signed into law the “Bankruptcy Administration Improvement Act of 2020,” a bipartisan effort that previously passed both the Senate and the House of Representatives. To ensure that the bankruptcy system remains self-funded, efficient and effective, the bill (1) reduces the amount of quarterly fees paid in chapter 11 cases and simplifies the fee structure (2)  provides for the distribution of chapter 11 bankruptcy fees made to the U.S. Trustee System Fund for the costs of administering payments and chapter 7 trustee compensation, (3) establishes the Chapter 7 Trustee Fund and associated fees, and (4) extends the temporary office of bankruptcy judges in specified judicial districts. The bill was introduced on Dec. 9 by Senate Judiciary Chair Lindsey Graham (R-S.C.) with bi-partisan co-sponsorship from Sens. Chris Coons (D-Del.), Marco Rubio (R-Fla.), Benjamin Cardin (D-Md.), Marsha Blackburn (R-Tenn.) and Thomas Carper (D-Del.), and it passed the Senate that same day. It proceeded to the House of Representatives, which passed the legislation without objection on December 21.

“ABI commends Congress and the President for their work to have the ‘Bankruptcy Administration Improvement Act’ signed into law,” said ABI Executive Director Amy Quackenboss. “Amid the economic challenges brought on by the COVID-19 pandemic, this law will ensure that the court system is sufficiently equipped to help struggling consumers and businesses achieve a financial fresh start through bankruptcy.”

Key provisions of the Bankruptcy Administration Improvement Act of 2020 include:

  • Reduce the amount of quarterly fees paid in chapter 11 cases and simplify the fee structure.
  • Extend all temporary bankruptcy judgeships five years from their current lapse date. The effect would be extending 8 judgeships through 2025, 14 through 2027, and 3 through 2029.
  • Provide $5.4 million to offset the cost of extending the 25 bankruptcy judgeships.
  • Ensure adequate funding of the U.S. Trustee Program by continuing to provide for the offset of its appropriations.
  • Establish the Chapter 7 Trustee Fund and associated fees and use a portion of any surplus to provide the first increase in nearly 30 years of the fee paid to private trustees appointed in chapter 7 liquidation cases, including cases that convert from chapter 11 to chapter 7, and to pay the costs of the Administrative Office of the U.S. Courts in administering these payments; and
  • Deposit any excess funds back into the U.S. Trustee System Fund.

To view the text of the “Bankruptcy Administration Improvement Act of 2020,” please click here.


ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org.