H.R. 6912 – No Bonuses in Bankruptcy Act of 2018

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Updated April 15, 2026 at 11:53 PM UTC

The No Bonuses in Bankruptcy Act of 2018 changes the bankruptcy code to stop companies from paying bonuses to high‑paid employees and insiders while a bankruptcy case is pending. It bars any bonus—defined as extra compensation beyond salary or base pay, including retention or incentive payments—to anyone earning more than $250,000 a year or to any insider of the debtor. The rule applies only to bankruptcies that begin after the law is enacted.

Key Provisions

Adds a new subsection to 11 U.S.C. § 503 that expressly forbids paying a bonus to anyone earning over $250,000 annually or to any insider of the debtor during the bankruptcy case.
Defines “bonus” as any extra payment or obligation that is beyond regular wages, base salary, or that functions as a retention, incentive, or reward.
Amends 11 U.S.C. § 547(b)(4)(B) and § 548(a)(1) to treat such prohibited bonuses as prohibited preferences and fraudulent transfers, extending the same $250,000/insider rule to those sections.
Specifies that the changes take effect immediately upon enactment but only apply to bankruptcy cases filed on or after that date.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on the Judiciary.

Judiciary Committee

September 26, 2018

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HouseIntro Referral

Introduced in House

September 26, 2018

HouseIntro Referral

Referred to the House Committee on the Judiciary.

Judiciary Committee

September 26, 2018

Bill Text

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Introduced in HouseIssued September 26, 2018

I

115th CONGRESS

2d Session

H. R. 6912

IN THE HOUSE OF REPRESENTATIVES

September 26, 2018

Mr. Duncan of Tennessee introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 11 of the United States Code to prohibit the payment of bonuses to highly compensated employees and insiders of the debtor to perform services during the bankruptcy case; and for other purposes.

1.

Short title

This Act may be cited as the No Bonuses in Bankruptcy Act of 2018.

2.

Amendments

Title 11 of the United States Code is amended—

(1)

in section 503 by adding at the end the following:

(d)

(1)

Notwithstanding any other provision of this section, there shall neither be allowed nor paid a bonus to—

(A)

a person employed at an annual rate of compensation exceeding $250,000 by the debtor at any time in the year ending on the date of the filing of the petition; or

(B)

an insider of the debtor.

(2)

For purposes of this subsection, the term bonus means a transfer to, or obligation incurred for the benefit of, an employee or insider as compensation for services in an amount that—

(A)

is in addition to the existing employee’s or insider's wages or salary;

(B)

is in addition to existing base compensation of the employee or insider; or

(C)

can be construed as a form of retention, incentive, or reward related to the employee’s or insider's employment by the debtor.

;

(2)

in section 547(b)(4)(B) by striking insider and inserting an employee employed at an annual rate of compensation exceeding $250,000 by the debtor at any time in the year ending on the date of the filing of the petition or an insider of the debtor; and

(3)

in section 548(a)(1)—

(A)

in the matter preceding subparagraph (A) by inserting a person employed at an annual rate of compensation exceeding $250,000 by the debtor at any time in the 2-year period ending on the date of the filing of the petition or after benefit of each place it appears; and

(B)

in subparagraph (B)(IV) by inserting a person employed at an annual rate of compensation exceeding $250,000 by the debtor at any time in the 2-year period ending on the date of the filing of the petition or after benefit of.

3.

Effective date; application of amendment

(a)

Effective date

Except as provided in subsection (b), this Act and the amendment made by this Act shall take effect on the date of the enactment of this Act.

(b)

Application of amendment

The amendment made by this Act shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act.