H.R. 428House117th Congress (2021-2023)In Committee

No Bonuses Ahead of Bankruptcy Filing Act of 2021

Introduced January 21, 2021

AI-Generated Summary

Updated February 7, 2026 at 9:31 PM UTC

The No Bonuses Ahead of Bankruptcy Filing Act of 2021 amends the bankruptcy code to stop the payment of bonuses to highly compensated employees, insiders, and others whose bonus would raise their annual compensation above $250,000 during a specified period around a bankruptcy filing. The rule applies to bankruptcy cases filed after the law takes effect and affects debtors, their high‑paid staff, consultants and contractors.

Key Provisions

  • Adds a new subsection to 11 U.S.C. §503 that prohibits any bonus to (A) an employee earning over $250,000 annually, (B) an insider of the debtor, or (C) any employee if the bonus would push total compensation above $250,000, during the two‑year period ending one year after the filing date.
  • Defines “bonus” as extra compensation beyond wages, salary, or base pay that serves as retention, incentive, or reward, but excludes sales commissions and payments required by collective‑bargaining agreements.
  • Specifies that “individual employed by the debtor” includes employees, consultants, and contractors.
  • Effective immediately upon enactment, but the amendment applies only to bankruptcy cases commenced on or after that date.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

2 earlier actions
HouseCommittee Latest Action

Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.

March 5, 2021

View full timeline
HouseIntro Referral

Introduced in House

January 21, 2021

HouseIntro Referral

Referred to the House Committee on the Judiciary.

January 21, 2021

HouseCommittee

Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law.

March 5, 2021

Floor Debate

7 members

What members said about H.R. 428 on the floor

4 Republicans3 Democrats
Gerald E. Connolly
Rep. Gerald E. ConnollyD-VA-11 · Apr 27, 2022

Mr. Speaker, I move to suspend the rules and pass the bill (S. 812) to direct the Secretary of State to develop a strategy to regain observer status for Taiwan in the World Health Organization, and…

Sheila Jackson Lee
Rep. Sheila Jackson LeeD-TX-18 · Apr 27, 2022

Mr. Speaker, I rise in strong support of S. 812, a bill to direct the Secretary of State to develop a strategy to regain observer status for Taiwan in the World Health Organization (WHO), and for…

Daniel Meuser
Rep. Daniel MeuserR-PA-9 · Apr 27, 2022

Mr. Speaker, I yield myself such time as I may consume. I rise in support of S. 812, directing the Secretary of State to develop a strategy to regain observer status for Taiwan in the World Health…

Christopher H. Smith
Rep. Christopher H. SmithR-NJ-4 · Apr 27, 2022

Mr. Speaker, I support S. 812, which came to us from the Senate, and which calls for the Administration to develop a strategy for Taiwan to regain observer status at the World Health Organization. As…

Young Kim
Rep. Young KimR-CA-39 · Apr 27, 2022

Mr. Speaker, I thank Representative Meuser for yielding, and I thank Representative Connolly, Chairman Meeks, and Ranking Member McCaul for their leadership on this very important issue. I rise in…

Show 2 more
Brian Schatz
Sen. Brian SchatzD-HI · Aug 5, 2021

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 110, S. 812. I ask unanimous consent that the bill be considered read a third time and…

Russ Fulcher
Rep. Russ FulcherR-ID-1 · Apr 27, 2022

Mr. Speaker, on that I demand the yeas and nays.

Bill Text

Latest available legislative text

Reading Mode
Latest
Introduced in HouseIssued January 21, 2021

I

117th CONGRESS

1st Session

H. R. 428

IN THE HOUSE OF REPRESENTATIVES

January 21, 2021

Mr. Steube 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 individuals employed by the debtor 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 Ahead of Bankruptcy Filing Act of 2021.

2.

Amendment

Section 503 of title 11 of the United States Code is amended by adding at the end the following:

(d)
(1)

During the 2-year period ending 1 year after the date of the filing of the petition and notwithstanding any other provision of this section, there shall neither be allowed nor paid a bonus to—

(A)

an individual employed by the debtor at an annual rate of compensation exceeding $250,000;

(B)

an insider of the debtor; or

(C)

an individual employed by the debtor to the extent that such bonus would cause that individual’s annual rate of compensation to exceed $250,000.

(2)

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

(A)

is in addition to the existing wages, salary, or base compensation of an insider of the debtor or individual employed by the debtor; and

(B)

can be construed as a form of retention, incentive, or reward related to the services provided to the debtor by the insider or the individual employed by the debtor.

The term bonus does not include a sales commission. Nor does the term bonus include any transfer or obligation pursuant to the terms of a collective bargaining agreement.
(3)

The term an individual employed by the debtor includes, but is not limited to, an employee, consultant, or contractor.

.

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.