89–006 

116TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 116–170 

NATIONAL GUARD AND RESERVISTS DEBT RELIEF 

EXTENSION ACT OF 2019 

JULY 23, 2019.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. NADLER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 3304] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 3304) 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, having considered the same, report favorably thereon without amendment and recommend that 

the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 5 

Committee Consideration ........................................................................................ 5 

Committee Votes ...................................................................................................... 5 

Committee Oversight Findings ............................................................................... 5 

New Budget Authority and Tax Expenditures and Congressional Budget Office Cost Estimate ................................................................................................ 5 

Duplication of Federal Programs ............................................................................ 6 

Performance Goals and Objectives ......................................................................... 6 

Advisory on Earmarks ............................................................................................. 6 

Section-by-Section Analysis .................................................................................... 6 

Changes in Existing Law Made by the Bill, as Reported ..................................... 6 

Purpose and Summary 

H.R. 3304, the ‘‘National Guard and Reservists Debt Relief Extension Act of 2019,’’ would extend the temporary authorization exempting certain qualifying reserve component members of the 


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1 Blue Star Families Military Family Lifestyle Survey Results, ServingTogether, https:// 

servingtogetherproject.org/blue-star-families-military-family-lifestyle-survey-results/ (last visited 

June 3, 2019). 2 Id. 

3Press Release, Nat’l Foundation for Credit Counseling, Harris Poll Shows Military Service 

Members, Spouses and Partners Rely on the Gig Economy to Supplement Household Income 

(May 21, 2019) [hereinafter NFCC Survey], https://www.nfcc.org/press/harris-poll-shows-military-service-members-spouses-and-partners-rely-on-the-gig-economy-to-supplement-household-income; see Sharon Epperson et al., Military Families Say This Is Their Top Concern, CNBC (May 

25, 2019, 10:00 a.m.), https://www.cnbc.com/2019/05/24/for-military-families-financial-concernsoutweigh-deployment-issues.html. 4 NFCC Survey, supra note3. 

5Dick Powers, Opinion, Military Families Find Money Matters Complex, NBC NEWS (May 23, 

2019), https://www.nbcnews.com/veteran-services/next-steps-for-vets/military-families-financialedge-find-money-matters-complex-n1009231. 6Press Release, U.S. Dep’t of Housing & Urban Dev. Exchange, Homelessness Declines in 

Most Communities of the U.S. with Increases Reported in High-Cost Areas (Dec. 6, 2017), 

https://www.hudexchange.info/news/homelessness-declines-in-most-communities-of-the-u-s-withincreases-reported-in-high-cost-areas. 7 Background & Statistics—FAQ About Homeless Veterans, Nat’l Coalition for Homeless Veterans, http://nchv.org/index.php/news/media/background_and_statistics (last visited June 3, 

2019). 8Pub. L. No. 108–189, 117 Stat. 2835, 2842 (2003) (codified in scattered sections of 50 U.S.C. 

app.). 

Armed Services and National Guard members from the Bankruptcy 

Code’s means test for four years. This bipartisan measure was introduced by Representative Steve Cohen (D–TN), together with 

Representatives Ben Cline (R–VA), Madeline Dean (D–PA), and 

Tim Burchett (R–TN) as original cosponsors. 

Background and Need for the Legislation 

BACKGROUND

I. Overview of financial challenges faced by servicemembers and veterans 

According to a 2018 lifestyle survey of servicemembers and veterans, financial issues was the top lifestyle stressor.1 In fact, 62 

percent of the more than 10,000 individuals surveyed reported that 

they experienced stress because of their current financial situation.2 Similarly, the National Foundation for Credit Counseling 

found in its survey of military personnel that ‘‘[n]early 9 in 10 active service members and 84% of spouses or partners have worries 

about personal finances.’’ 3 That survey also found ‘‘service members today are twice as likely not to be able to pay all their bills 

on time than they were in 2014 (34% vs. 16%), and 3 in 10 spouses 

or partners of service members (29%) say they do not pay their 

bills on time. About 1 in 10 (11% vs. 3% in 2014) say they currently 

have debts in collection.’’ 4 As one financial advisor explained, ‘‘Almost half of service members are under the age of 25, and a high 

percentage are married with children. They don’t get paid a lot and 

they must deploy repeatedly to difficult places, many times where 

their lives are on the line.’’ 5

Servicemembers can also experience financial distress once they 

leave active service. The U.S. Department of Housing and Urban 

Development, according to its 2017 report, estimates that 40,056 

veterans are homeless on any given night.6 In addition, approximately ‘‘1.4 million other veterans, meanwhile, are considered at 

risk of homelessness due to poverty, lack of support networks, and 

dismal living conditions in overcrowded or substandard housing.’’ 7

Although the 2003 Servicemembers Civil Relief Act 8 affords certain protections from creditor collection efforts for a servicemember 


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9See, e.g., 50 U.S.C. app. § 522(a)(1) (2019). 10 Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98–353, § 312, 98 

Stat. 333, 335 (1984). 11 11 U.S.C. § 707(b) (2019). 12 6 Alan N. Resnick & Henry J. Sommer, Collier On Bankruptcy § 707.LH[2], at 707–61 (15th 

ed. rev. 2006). 13 Id. at § 707.04. 14 Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986, 

Pub. L. No. 99–554, 219, 100 Stat. 3088, 3101 (1986). The United States Trustee Program is 

responsible for overseeing the administration of bankruptcy cases and private trustees. 28 

U.S.C. §§ 581–89a (2019). The Program is overseen by the Executive Office for United States 

Trustees, which provides policy and management direction to United States Trustees. The Program operates through a system of 21 regions nationwide, except for North Carolina and Alabama. Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986, 

Pub. L. No. 99–554 (1986); 28 U.S.C. § 581 n. (2019). With respect to North Carolina and Alabama, the bankruptcy system is administered by a bankruptcy administrator appointed by the 

Judicial Conference. Id. 15Pub. L. No. 109–8, 119 Stat 23. (2005). 16 11 U.S.C. § 707(b)(2)(A) (2019). 17 11 U.S.C. § 101(10A) (2019). 

who is no longer in active duty status for 90 days,9 this temporary 

relief is inadequate in certain instances and, as a result, these 

former servicemembers must sometimes seek bankruptcy protection under chapter 7. With respect to servicemembers who seek 

chapter 7 relief shortly after leaving service, the means test presents particular issues. Servicemembers on active duty may receive 

higher compensation in the form of combat pay, while they incur 

fewer expenses. 

II. The Bankruptcy Code’s means test 

Although the Bankruptcy Code as originally enacted in 1978 provided that a chapter 7 case could only be dismissed for ‘‘cause,’’ the 

Code was amended in 1984 to permit the court to dismiss a chapter 

7 case for ‘‘substantial abuse.’’ 10 This provision, codified in section 

707(b) of the Bankruptcy Code,11 was added ‘‘as part of a package 

of consumer credit amendments designed to reduce perceived 

abuses in the use of chapter 7.’’ 12 It was intended to respond ‘‘to 

concerns that some debtors who could easily pay their creditors 

might resort to chapter 7 to avoid their obligations.’’ 13 In 1986, section 707(b) was further amended to allow a United States Trustee 

to move for dismissal.14

Among its various amendments to the Bankruptcy Code, the 

‘‘Bankruptcy Abuse Prevention and Consumer Protection Act of 

2005’’ (BAPCPA) 15 included the establishment of a means or 

needs-based testing mechanism to determine a debtor’s ability to 

repay debts for the purpose of determining whether the filing of the 

bankruptcy case should be presumed to be abusive. As amended by 

that Act, Bankruptcy Code section 707(b) provides that if a chapter 

7 debtor has the ability to repay debts and has no special circumstances, the filing of the debtor’s case is presumed to be an 

abuse and subject to dismissal or conversion to a chapter 13 case 

based on the debtor’s income and various specified expenses, some 

of which are determined under Internal Revenue expense standards.16 The debtor’s income, for purposes of this test, is typically 

determined by calculating the amount of average monthly income 

the debtor received during the six-month period preceding the filing of the bankruptcy case.17

To satisfy this ability-to-repay analysis, a chapter 7 debtor, with 

limited exception, must complete a series of forms requiring detailed financial information and supporting documentation with reVerDate Sep 11 2014 04:19 Jul 27, 2019 Jkt 089006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR170.XXX HR170

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18Official Bankruptcy Form 106I, Schedule I: Your Income (Dec. 1, 2015), https:// 

www.uscourts.gov/forms/individual-debtors/schedule-i-your-income-individuals. 19Official Bankruptcy Form 106J, Schedule J: Your Expenses (Dec. 1, 2015), https:// 

www.uscourts.gov/forms/individual-debtors/schedule-j-your-expenses-individuals. 20Official Bankruptcy Form 122A–1, Chapter 7 Statement of Your Current Monthly Income 

(Dec. 1, 2015), https://www.uscourts.gov/forms/means-test-forms/chapter-7-statement-your-current-monthly-income. 21Official Bankruptcy Forms 122A–2, Chapter 7 Means Test Calculation (Dec. 1, 2015), 

https://www.uscourts.gov/forms/means-test-forms/chapter-7-means-test-calculation. 22 11 U.S.C. 101(10A), 521(a)(1)(B)(ii) (2019); Official Bankruptcy Form 106I, Schedule I: Your 

Income (Dec. 1, 2015), https://www.uscourts.gov/forms/individual-debtors/schedule-i-your-incomeindividuals. 23 11 U.S.C. § 707(b)(2)(D) (2019). 24The term is defined by reference to 38 U.S.C. § 3741(1) (2019), which provides as follows: 

The term ‘‘disabled veteran’’ means (A) a veteran who is entitled to compensation under laws 

administered by the Secretary for a disability rated at 30 percent or more, or (B) a veteran 

whose discharge or release from active duty was for a disability. 25 As defined in 10 U.S.C. 101(d)(1) (2019). 26 As defined in 32 U.S.C. 901(1) (2019). 27Official Bankruptcy Form 121A–1Supp, Statement of Exemption from Presumption of Abuse 

Under § 707(b)(2) (Dec. 1, 2015). 28Pub. L. No. 110–438, 122 Stat. 5000 (2008). 

gard to the debtor’s income 18 and expenses.19 Specifically, for purposes of determining whether the debtor’s bankruptcy case triggers 

a presumption of abuse under the means test, the debtor must 

complete a form used to calculate his or her current monthly income.20 Then, using the information supplied in response to these 

forms, the debtor must complete a form consisting of 43 questions 

requiring the debtor to calculate whether his or her annualized current monthly income exceeds the applicable median family income.21

NEED FOR THE LEGISLATION

Unless otherwise exempted, servicemembers and veterans must 

complete the required forms and submit the specified paperwork 

under the Bankruptcy Code’s means test. This requirement applies 

even with respect to servicemembers who have returned to the 

United States from active service and thus no longer receive combat pay. Under the means test, such servicemember would have to 

calculate his or her income based on the average monthly income 

that he or she received during the six-month period preceding the 

filing date of the bankruptcy case, rather than the debtor’s actual 

income, which may be much less because of the debtor’s non-combat status.22

The means test has two exemptions with respect to 

servicemembers and veterans.23 First, it does not apply if the debtor is a disabled veteran24 whose indebtedness was incurred primarily during a period in which he or she was on active duty 25 or 

while the debtor was performing a homeland defense activity.26

Second, it does not apply to a member of the Armed Services or 

the National Guard who was called to active service or to perform 

a homeland security activity for more than 90 days after September 11, 2001. This temporary exemption applies while the debtor is on active service and for the 540-day period after he or she 

completes such service or activity. If the debtor so qualifies, he or 

she must complete a form claiming such exemption.27

Bipartisan legislation authorizing this temporary exemption was 

first enacted for three years.28 This measure also included a directive to the Government Accountability Office (GAO) to examine the 

impact of this exemption. Pursuant to this directive, the GAO 


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29 U.S. Gov’t Accountability Office, Military Personnel: Observations on the Use and Effects 

of the National Guard and Reservists Debt Relief Act of 2008, GAO–10–1014R, at 13 (Sept. 30, 

2010), https://www.gao.gov/assets/100/97122.pdf. 30Pub. L. No. 112–64, 125 Stat. 766 (2011). 31Pub. L. No. 114–107, 129 Stat. 2223 (2015). 32Oversight of Bankruptcy Law and Legislative Proposals: Hearing Before the Subcomm. on 

Antitrust, Commercial, & Admin. Law of the H. Comm. on the Judiciary, 116th Cong. (2019). 33See Omnibus Bankruptcy Hearing Tr. at 38–42. 

found that among the 2,122 eligible servicemembers who filed for 

chapter 7 relief during the first year the law was in effect ‘‘only 8 

percent, or 176 eligible servicemembers, claimed the means test exemption.’’ 29

Subsequently, this exemption was further extended in 2011 for 

an additional four years 30 and thereafter in 2015 for another four 

years.31 The current extension is due to expire on December 19, 

2019. 

Hearings 

For the purposes of section 103(i) of H. Res. 6 of the 116th Congress, the following hearing was used to consider H.R. 3304: ‘‘Oversight of Bankruptcy Law and Legislative Proposals,’’ which was 

held on June 25, 2019 by the Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law.32 The hearing considered various legislative measures. Of pertinence to H.R. 3304, the 

following witnesses testified: Hollister K. Petraeus, former Assistant Director, Consumer Financial Protection Bureau’s Office of 

Servicemember Affairs, testified in support of this legislation.33

Committee Consideration 

On July 11, 2019, the Committee met in open session and ordered the bill, H.R. 3304, favorably reported without amendment 

by voice vote, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that no rollcall 

votes occurred during the Committee’s consideration of H.R. 3304. 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

New Budget Authority and Tax Expenditures and 

Congressional Budget Office Cost Estimate 

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause (3)(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 

1974, the Committee has requested but not received a cost estimate 


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for this bill from the Director of Congressional Budget Office. The 

Committee has requested but not received from the Director of the 

Congressional Budget Office a statement as to whether this bill 

contains any new budget authority, spending authority, credit authority, or an increase or decrease in revenues or tax expenditures. 

Duplication of Federal Programs 

No provision of H.R. 3304 establishes or reauthorizes a program 

of the federal government known to be duplicative of another federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 3304 would extend the temporary authorization exempting certain qualifying reserve component members of the Armed Services and National 

Guard members from the Bankruptcy Code’s means test for four 

years. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 3304 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of rule XXI. 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short title. Section 1 sets forth the short title of the bill 

as the ‘‘National Guard and Reservists Debt Relief Extension Act 

of 2019.’’ 

Sec. 2. National Guard and Reservists Debt Relief Amendment. 

Section 2 amends the National Guard and Reservists Debt Relief 

Act to further extend the temporary exemption for four years. The 

current extension is due to expire on December 19, 2019. 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT 

OF 2008 

* * * * * * * 


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SEC. 4. EFFECTIVE DATE; APPLICATION OF AMENDMENTS. 

(a) EFFECTIVE DATE.—Except as provided in subsection (b), this 

Act and the amendments made by this Act shall take effect 60 days 

after the date of enactment of this Act. 

(b) APPLICATION OF AMENDMENTS.—The amendments made by 

this Act shall apply only with respect to cases commenced under 

title 11 of the United States Code in the ø11-year¿ 15-year period 

beginning on the effective date of this Act. 

* * * * * * * 

Æ 


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