Were Chapter 11 Fees Increased?

Ann vom Eigen
Deputy Executive Director
and General Counsel
avomeigen@abiworld.org

lthough the checks and balances of the Senate and the House legislative process are supposed to assure that many eyes scrutinize legislative language, the practical reality is otherwise. Extended negotiations, late-night agreements and parliamentary limitations on the adoption of floor amendments often contribute to drafting errors that can seem quite obvious and irrational in real life. The listed confluence of events all seem to have contributed to the confusion surrounding this April 9's bankruptcy filing fee schedules. Increases are now in effect for chapter 7 and 13 filing fees, while chapter 11 fees were not increased. While some have surmised that Congress must have intended to raise the chapter 11 fees, the statute did not.

In its annual effort to reduce the federal budget deficit, Congress often scrutinizes federal agency budgets for potential revenue and fee increases. Bankruptcy filing fees have not been immune to this effort; thus, bankruptcy filing fees were increased in the Bankruptcy Abuse and Consumer Protection Act of 2005 (BAPCPA). Most recently, increases in bankruptcy filing fees were also included in the federal budget bill considered this year—the Deficit Reduction Act of 2005. Total chapter 7 filing fees were increased to $299, and chapter 13 fees were increased to $274.

Although Congress appears to have intended to raise the fees for chapter 11 when it increased chapter 7 and 13 filing fees, the actual statute does not reference the correct sections but instead references the statutory subsection prescribing the chapter 9 fee. Consequently, congressional attempts to increase the chapter 11 fee failed. The Administrative Office of the U.S. Courts is taking the position that fees that are not affected by changes in the Deficit Reduction Act will remain at the current level. Congress does not plan to take action to increase these fees at the present time.

Several bankruptcy court miscellaneous fees are linked to the statutory fee changes, but are at the discretion of the Judicial Conference, which in March agreed to stay all increases in miscellaneous fees until the Court Administration and Case Management and Bankruptcy Committees have an opportunity to review all the increases at their June meetings. The fee schedule can be accessed at http://www.uscourts.gov/fedcourtfees/bankruptcyfee2006.pdf.