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New Bankruptcy Legislation

August 28, 2019

Four bankruptcy bills were signed by the President on August 23, 2019. Three of the four took effect on signing, and the fourth will take effect 180 days later.

 

H.R. 2336, the Family Farmer Relief Act of 2019, Pub. L. No. 116-51 (https://www.congress.gov/116/bills/hr2336/BILLS-116hr2336enr.pdf), amended 11 U.S.C. § 101(18) to increase the chapter 12 debt limit from $4,411,400 to $10 million. The act contains no effective date, so it took effect on signing.

 

H.R. 2938, the Honoring American Veterans in Extreme Need Act of 2019, or the HAVEN Act, Pub. L. No. 116-52 (https://www.congress.gov/116/bills/hr2938/BILLS-116hr2938enr.pdf), amended section 101(10A)(B) to add to the types of third-party payments excluded from current monthly income certain amounts payable in connection with a disability, combat-related injury or disability, or death of a member of the uniformed services. The act contains no effective date, so it took effect on signing.

 

H.R. 3304, the National Guard and Reservists Debt Relief Extension Act of 2019, Pub. L. No. 116-53 (https://www.congress.gov/116/bills/hr3304/BILLS-116hr3304enr.pdf), is officially summarized as follows: “To exempt for an additional 4-year period, from the application of the means-test presumption of abuse under chapter 7, qualifying members of reserve components of the Armed Forces and members of the National Guard who, after September 11, 2001, are called to active duty or to perform a homeland defense activity for not less than 90 days.” The National Guard and Reservists Debt Relief Act of 2008 was initially effective only as to cases filed during the three-year period after the effective date of that act, which was December 19, 2008, making that act effective for cases filed through December 18, 2011. An interim amendment extended the 2008 act to cases filed through December 18, 2019, and H.R. 3304 extended the the 2008 act to apply to cases filed for an additional four years, through December 18, 2023. The 2019 act contains no effective date, so it took effect on signing.

 

H.R. 3311, the Small Business Reorganization Act of 2019, Pub. L. No. 116-54 (https://www.congress.gov/116/bills/hr3311/BILLS-116hr3311enr.pdf), enacted new subchapter V of chapter 11 (sections 1181 through 1195) for small-business debtors, and it amended preference law for cases under all chapters. The act is effective 180 days after enactment, February 19, 2020.