May 22, 2022

Volume XII, Number 142

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May 20, 2022

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Bankruptcy Dollar Amounts Set to Rise April 1, 2022, by a Significant Amount

Every three years on April 1, the dollar amounts in the Bankruptcy Code are adjusted to account for inflation. The April 1, 2022, increase will be nearly 11%, far greater than the approximately 6.2% increase three years ago.

Bankruptcy Code section 104 requires the Judicial Conference of the United States to publish the changes at least a month before they take effect. On February 4, 2022, the Judicial Conference published this year's increase in the Federal Register. The nearly 11% increase in statutory dollar limits will affect nearly everything in bankruptcy that has a dollar limit, including

  • the amount of property that a debtor may exempt from the estate,

  • the maximum amount of certain "priority" claims, such as for employee wages and for deposits for certain undelivered products and services,

  • the minimum aggregate claims needed to file an involuntary bankruptcy petition, and

  • the aggregate debt limits used to determine which debtors qualify to file cases under chapter 13 or the relatively new "Subchapter V" of chapter 11.

Anyone who relies on specific dollar limits in the Bankruptcy Code should be sure to take notice of these changes.

Michigan has dollar limits for its own set of state-specific bankruptcy exemptions, and its dollar limits increase every three years as well. They increase on a different three-year cycle, though. They were last increased March 1, 2020, and are not set to increase again until 2023.

© 2022 Miller, Canfield, Paddock and Stone PLC National Law Review, Volume XII, Number 59
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About this Author

Ronald Spinner Bankruptcy Lawyer Miller Canfield
Principal

Ron Spinner brings extensive business experience to his bankruptcy practice, developing results-oriented strategies and breaking new legal ground where necessary to do so.

Indeed, Ron's ability to deal with novel situations helped tremendously in the City of Detroit bankruptcy case, where questions of first impression arose regularly. His ability to navigate the unique aspects of chapter 9 aided (and continues to aid) the City in its recovery.

As another example, Ron represented a creditor who "factored" the debtors' invoices. Courts typically characterize factoring as a "...

313.496.7829
Marc N. Swanson Bankruptcy Attorney Miller, Canfield, Paddock and Stone Detroit, MI
Principal

Marc Swanson is the deputy group leader of the Bankruptcy Group at Miller Canfield. He specializes in representing debtors, lenders, creditors, equity holders and unsecured creditors' committees in bankruptcy cases and related litigation in Michigan and throughout the country. Marc has extensive experience in the municipal, energy, automotive, banking and building supply industries.

Marc is currently the lead attorney for the City of Detroit in its bankruptcy case. In this role, Marc argued and won two bankruptcy appeals at the U.S. 6th Circuit Court of Appeals for the City. One of...

313-496-7591
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