Polsinelli Shughart Bankruptcy Reporter - April 2013


On April 1, 2013, increases to certain dollar amounts provided for in the United States Bankruptcy Code will go into effect for all cases filed on or after April 1, 2013. The most relevant increases are with respect to the amount of priority claims allowed under the Bankruptcy Code.

  • The priority amount allocated for employee compensation claims (11 U.S.C. § 507(a)(4)) and benefit plan contributions (11 U.S.C. § 507(a)(5)) rise from $11,725 to $12,425.
  • The priority amount mandated for consumer deposits (11 U.S.C. § 507(a)(7)) increases from $2,600 to $2,775.
  • The minimum dollar amount to assert a cause of action under 11 U.S.C. § 547 for a preferential transfer against a defendant in a non-consumer bankruptcy case (11 U.S.C. § 547(c)(9)) rises from $5,475 to $6,225 and the dollar amount for venue for a preference action (28 U.S.C. § 1409) increases from $11,725 to $12,475.
  • The total amount of claims required to file an involuntary bankruptcy petition (11 U.S.C. §303)(b)) increase from $14,425 to $15,325.
  • The total debt limit in the definition of a small business debtor (11 U.S.C. § 101(51D)) increases from $2,343,300 to $2,490,925.

These increases are automatically inacted every three years on April 1 commencing in 1998. The increases are set to adjust the Bankruptcy Code for inflation and are set to reflect the change in the Consumer Price Index for All Urban Consumers (11 U.S.C. § 104). While the increases may appear de minimus, practitioners need to assure that their current forms account for the inflation adjusted amounts in the Bankruptcy Code.

For More Information:

If you have questions or would like more information on this topic, please contact one of our Bankruptcy & Financial Restructuring attorneys.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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