IB 

Union Calendar No. 14 

109TH CONGRESS 

1ST SESSION S. 256 

[Report No. 109–31, Part I] 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 15, 2005 

Referred to the Committee on the Judiciary and in addition to the Committee 

on Financial Services, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

APRIL 8, 2005 

Reported from the Committee on the Judiciary 

APRIL 8, 2005 

Committee on Financial Services discharged; committed to the Committee of 

the Whole House on the State of the Union and ordered to be printed 

AN ACT 

To amend title 11 of the United States Code, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CON2 TENTS. 

3 (a) SHORT TITLE.—This Act may be cited as the 

4 ‘‘Bankruptcy Abuse Prevention and Consumer Protection 

5 Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; references; table of contents. 

TITLE I—NEEDS-BASED BANKRUPTCY 

Sec. 101. Conversion. 

Sec. 102. Dismissal or conversion. 

Sec. 103. Sense of Congress and study. 

Sec. 104. Notice of alternatives. 

Sec. 105. Debtor financial management training test program. 

Sec. 106. Credit counseling. 

Sec. 107. Schedules of reasonable and necessary expenses. 

TITLE II—ENHANCED CONSUMER PROTECTION 

Subtitle A—Penalties for Abusive Creditor Practices 

Sec. 201. Promotion of alternative dispute resolution. 

Sec. 202. Effect of discharge. 

Sec. 203. Discouraging abuse of reaffirmation agreement practices. 

Sec. 204. Preservation of claims and defenses upon sale of predatory loans. 

Sec. 205. GAO study and report on reaffirmation agreement process. 

Subtitle B—Priority Child Support 

Sec. 211. Definition of domestic support obligation. 

Sec. 212. Priorities for claims for domestic support obligations. 

Sec. 213. Requirements to obtain confirmation and discharge in cases involving 

domestic support obligations. 

Sec. 214. Exceptions to automatic stay in domestic support obligation proceedings. 

Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and 

support. 

Sec. 216. Continued liability of property. 

Sec. 217. Protection of domestic support claims against preferential transfer 

motions. 

Sec. 218. Disposable income defined. 

Sec. 219. Collection of child support. 

Sec. 220. Nondischargeability of certain educational benefits and loans. 

Subtitle C—Other Consumer Protections 

Sec. 221. Amendments to discourage abusive bankruptcy filings. 
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Sec. 222. Sense of Congress. 

Sec. 223. Additional amendments to title 11, United States Code. 

Sec. 224. Protection of retirement savings in bankruptcy. 

Sec. 225. Protection of education savings in bankruptcy. 

Sec. 226. Definitions. 

Sec. 227. Restrictions on debt relief agencies. 

Sec. 228. Disclosures. 

Sec. 229. Requirements for debt relief agencies. 

Sec. 230. GAO study. 

Sec. 231. Protection of personally identifiable information. 

Sec. 232. Consumer privacy ombudsman. 

Sec. 233. Prohibition on disclosure of name of minor children. 

Sec. 234. Protection of personal information. 

TITLE III—DISCOURAGING BANKRUPTCY ABUSE 

Sec. 301. Technical amendments. 

Sec. 302. Discouraging bad faith repeat filings. 

Sec. 303. Curbing abusive filings. 

Sec. 304. Debtor retention of personal property security. 

Sec. 305. Relief from the automatic stay when the debtor does not complete intended surrender of consumer debt collateral. 

Sec. 306. Giving secured creditors fair treatment in chapter 13. 

Sec. 307. Domiciliary requirements for exemptions. 

Sec. 308. Reduction of homestead exemption for fraud. 

Sec. 309. Protecting secured creditors in chapter 13 cases. 

Sec. 310. Limitation on luxury goods. 

Sec. 311. Automatic stay. 

Sec. 312. Extension of period between bankruptcy discharges. 

Sec. 313. Definition of household goods and antiques. 

Sec. 314. Debt incurred to pay nondischargeable debts. 

Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases. 

Sec. 316. Dismissal for failure to timely file schedules or provide required information. 

Sec. 317. Adequate time to prepare for hearing on confirmation of the plan. 

Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases. 

Sec. 319. Sense of Congress regarding expansion of rule 9011 of the Federal 

Rules of Bankruptcy Procedure. 

Sec. 320. Prompt relief from stay in individual cases. 

Sec. 321. Chapter 11 cases filed by individuals. 

Sec. 322. Limitations on homestead exemption. 

Sec. 323. Excluding employee benefit plan participant contributions and other 

property from the estate. 

Sec. 324. Exclusive jurisdiction in matters involving bankruptcy professionals. 

Sec. 325. United States trustee program filing fee increase. 

Sec. 326. Sharing of compensation. 

Sec. 327. Fair valuation of collateral. 

Sec. 328. Defaults based on nonmonetary obligations. 

Sec. 329. Clarification of postpetition wages and benefits. 

Sec. 330. Delay of discharge during pendency of certain proceedings. 

Sec. 331. Limitation on retention bonuses, severance pay, and certain other 

payments. 

Sec. 332. Fraudulent involuntary bankruptcy. 

TITLE IV—GENERAL AND SMALL BUSINESS BANKRUPTCY 

PROVISIONS 
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Subtitle A—General Business Bankruptcy Provisions 

Sec. 401. Adequate protection for investors. 

Sec. 402. Meetings of creditors and equity security holders. 

Sec. 403. Protection of refinance of security interest. 

Sec. 404. Executory contracts and unexpired leases. 

Sec. 405. Creditors and equity security holders committees. 

Sec. 406. Amendment to section 546 of title 11, United States Code. 

Sec. 407. Amendments to section 330(a) of title 11, United States Code. 

Sec. 408. Postpetition disclosure and solicitation. 

Sec. 409. Preferences. 

Sec. 410. Venue of certain proceedings. 

Sec. 411. Period for filing plan under chapter 11. 

Sec. 412. Fees arising from certain ownership interests. 

Sec. 413. Creditor representation at first meeting of creditors. 

Sec. 414. Definition of disinterested person. 

Sec. 415. Factors for compensation of professional persons. 

Sec. 416. Appointment of elected trustee. 

Sec. 417. Utility service. 

Sec. 418. Bankruptcy fees. 

Sec. 419. More complete information regarding assets of the estate. 

Subtitle B—Small Business Bankruptcy Provisions 

Sec. 431. Flexible rules for disclosure statement and plan. 

Sec. 432. Definitions. 

Sec. 433. Standard form disclosure statement and plan. 

Sec. 434. Uniform national reporting requirements. 

Sec. 435. Uniform reporting rules and forms for small business cases. 

Sec. 436. Duties in small business cases. 

Sec. 437. Plan filing and confirmation deadlines. 

Sec. 438. Plan confirmation deadline. 

Sec. 439. Duties of the United States trustee. 

Sec. 440. Scheduling conferences. 

Sec. 441. Serial filer provisions. 

Sec. 442. Expanded grounds for dismissal or conversion and appointment of 

trustee. 

Sec. 443. Study of operation of title 11, United States Code, with respect to 

small businesses. 

Sec. 444. Payment of interest. 

Sec. 445. Priority for administrative expenses. 

Sec. 446. Duties with respect to a debtor who is a plan administrator of an employee benefit plan. 

Sec. 447. Appointment of committee of retired employees. 

TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS 

Sec. 501. Petition and proceedings related to petition. 

Sec. 502. Applicability of other sections to chapter 9. 

TITLE VI—BANKRUPTCY DATA 

Sec. 601. Improved bankruptcy statistics. 

Sec. 602. Uniform rules for the collection of bankruptcy data. 

Sec. 603. Audit procedures. 

Sec. 604. Sense of Congress regarding availability of bankruptcy data. 
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TITLE VII—BANKRUPTCY TAX PROVISIONS 

Sec. 701. Treatment of certain liens. 

Sec. 702. Treatment of fuel tax claims. 

Sec. 703. Notice of request for a determination of taxes. 

Sec. 704. Rate of interest on tax claims. 

Sec. 705. Priority of tax claims. 

Sec. 706. Priority property taxes incurred. 

Sec. 707. No discharge of fraudulent taxes in chapter 13. 

Sec. 708. No discharge of fraudulent taxes in chapter 11. 

Sec. 709. Stay of tax proceedings limited to prepetition taxes. 

Sec. 710. Periodic payment of taxes in chapter 11 cases. 

Sec. 711. Avoidance of statutory tax liens prohibited. 

Sec. 712. Payment of taxes in the conduct of business. 

Sec. 713. Tardily filed priority tax claims. 

Sec. 714. Income tax returns prepared by tax authorities. 

Sec. 715. Discharge of the estate’s liability for unpaid taxes. 

Sec. 716. Requirement to file tax returns to confirm chapter 13 plans. 

Sec. 717. Standards for tax disclosure. 

Sec. 718. Setoff of tax refunds. 

Sec. 719. Special provisions related to the treatment of State and local taxes. 

Sec. 720. Dismissal for failure to timely file tax returns. 

TITLE VIII—ANCILLARY AND OTHER CROSS-BORDER CASES 

Sec. 801. Amendment to add chapter 15 to title 11, United States Code. 

Sec. 802. Other amendments to titles 11 and 28, United States Code. 

TITLE IX—FINANCIAL CONTRACT PROVISIONS 

Sec. 901. Treatment of certain agreements by conservators or receivers of insured depository institutions. 

Sec. 902. Authority of the FDIC and NCUAB with respect to failed and failing 

institutions. 

Sec. 903. Amendments relating to transfers of qualified financial contracts. 

Sec. 904. Amendments relating to disaffirmance or repudiation of qualified financial contracts. 

Sec. 905. Clarifying amendment relating to master agreements. 

Sec. 906. Federal Deposit Insurance Corporation Improvement Act of 1991. 

Sec. 907. Bankruptcy law amendments. 

Sec. 908. Recordkeeping requirements. 

Sec. 909. Exemptions from contemporaneous execution requirement. 

Sec. 910. Damage measure. 

Sec. 911. SIPC stay. 

TITLE X—PROTECTION OF FAMILY FARMERS AND FAMILY 

FISHERMEN 

Sec. 1001. Permanent reenactment of chapter 12. 

Sec. 1002. Debt limit increase. 

Sec. 1003. Certain claims owed to governmental units. 

Sec. 1004. Definition of family farmer. 

Sec. 1005. Elimination of requirement that family farmer and spouse receive 

over 50 percent of income from farming operation in year prior 

to bankruptcy. 

Sec. 1006. Prohibition of retroactive assessment of disposable income. 

Sec. 1007. Family fishermen. 
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TITLE XI—HEALTH CARE AND EMPLOYEE BENEFITS 

Sec. 1101. Definitions. 

Sec. 1102. Disposal of patient records. 

Sec. 1103. Administrative expense claim for costs of closing a health care business and other administrative expenses. 

Sec. 1104. Appointment of ombudsman to act as patient advocate. 

Sec. 1105. Debtor in possession; duty of trustee to transfer patients. 

Sec. 1106. Exclusion from program participation not subject to automatic stay. 

TITLE XII—TECHNICAL AMENDMENTS 

Sec. 1201. Definitions. 

Sec. 1202. Adjustment of dollar amounts. 

Sec. 1203. Extension of time. 

Sec. 1204. Technical amendments. 

Sec. 1205. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions. 

Sec. 1206. Limitation on compensation of professional persons. 

Sec. 1207. Effect of conversion. 

Sec. 1208. Allowance of administrative expenses. 

Sec. 1209. Exceptions to discharge. 

Sec. 1210. Effect of discharge. 

Sec. 1211. Protection against discriminatory treatment. 

Sec. 1212. Property of the estate. 

Sec. 1213. Preferences. 

Sec. 1214. Postpetition transactions. 

Sec. 1215. Disposition of property of the estate. 

Sec. 1216. General provisions. 

Sec. 1217. Abandonment of railroad line. 

Sec. 1218. Contents of plan. 

Sec. 1219. Bankruptcy cases and proceedings. 

Sec. 1220. Knowing disregard of bankruptcy law or rule. 

Sec. 1221. Transfers made by nonprofit charitable corporations. 

Sec. 1222. Protection of valid purchase money security interests. 

Sec. 1223. Bankruptcy Judgeships. 

Sec. 1224. Compensating trustees. 

Sec. 1225. Amendment to section 362 of title 11, United States Code. 

Sec. 1226. Judicial education. 

Sec. 1227. Reclamation. 

Sec. 1228. Providing requested tax documents to the court. 

Sec. 1229. Encouraging creditworthiness. 

Sec. 1230. Property no longer subject to redemption. 

Sec. 1231. Trustees. 

Sec. 1232. Bankruptcy forms. 

Sec. 1233. Direct appeals of bankruptcy matters to courts of appeals. 

Sec. 1234. Involuntary cases. 

Sec. 1235. Federal election law fines and penalties as nondischargeable debt. 

TITLE XIII—CONSUMER CREDIT DISCLOSURE 

Sec. 1301. Enhanced disclosures under an open end credit plan. 

Sec. 1302. Enhanced disclosure for credit extensions secured by a dwelling. 

Sec. 1303. Disclosures related to ‘‘introductory rates’’. 

Sec. 1304. Internet-based credit card solicitations. 

Sec. 1305. Disclosures related to late payment deadlines and penalties. 
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Sec. 1306. Prohibition on certain actions for failure to incur finance charges. 

Sec. 1307. Dual use debit card. 

Sec. 1308. Study of bankruptcy impact of credit extended to dependent students. 

Sec. 1309. Clarification of clear and conspicuous. 

TITLE XIV—PREVENTING CORPORATE BANKRUPTCY ABUSE 

Sec. 1401. Employee wage and benefit priorities. 

Sec. 1402. Fraudulent transfers and obligations. 

Sec. 1403. Payment of insurance benefits to retired employees. 

Sec. 1404. Debts nondischargeable if incurred in violation of securities fraud 

laws. 

Sec. 1405. Appointment of trustee in cases of suspected fraud. 

Sec. 1406. Effective date; application of amendments. 

TITLE XV—GENERAL EFFECTIVE DATE; APPLICATION OF 

AMENDMENTS 

Sec. 1501. Effective date; application of amendments. 

Sec. 1502. Technical corrections. 

1 TITLE I—NEEDS-BASED 

2 BANKRUPTCY 

3 SEC. 101. CONVERSION. 

4 Section 706(c) of title 11, United States Code, is 

5 amended by inserting ‘‘or consents to’’ after ‘‘requests’’. 

6 SEC. 102. DISMISSAL OR CONVERSION. 

7 (a) IN GENERAL.—Section 707 of title 11, United 

8 States Code, is amended— 

9 (1) by striking the section heading and insert10 ing the following: 

11 ‘‘§ 707. Dismissal of a case or conversion to a case 

12 under chapter 11 or 13’’; 

13 and 

14 (2) in subsection (b)— 

15 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 
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1 (B) in paragraph (1), as so redesignated 

2 by subparagraph (A) of this paragraph— 

3 (i) in the first sentence— 

4 (I) by striking ‘‘but not at the re5 quest or suggestion of’’ and inserting 

6 ‘‘trustee (or bankruptcy adminis7 trator, if any), or’’; 

8 (II) by inserting ‘‘, or, with the 

9 debtor’s consent, convert such a case 

10 to a case under chapter 11 or 13 of 

11 this title,’’ after ‘‘consumer debts’’; 

12 and 

13 (III) by striking ‘‘a substantial 

14 abuse’’ and inserting ‘‘an abuse’’; and 

15 (ii) by striking the next to last sen16 tence; and 

17 (C) by adding at the end the following: 

18 ‘‘(2)(A)(i) In considering under paragraph (1) wheth19 er the granting of relief would be an abuse of the provi20 sions of this chapter, the court shall presume abuse exists 

21 if the debtor’s current monthly income reduced by the 

22 amounts determined under clauses (ii), (iii), and (iv), and 

23 multiplied by 60 is not less than the lesser of— 
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1 ‘‘(I) 25 percent of the debtor’s nonpriority un2 secured claims in the case, or $6,000, whichever is 

3 greater; or 

4 ‘‘(II) $10,000. 

5 ‘‘(ii)(I) The debtor’s monthly expenses shall be the 

6 debtor’s applicable monthly expense amounts specified 

7 under the National Standards and Local Standards, and 

8 the debtor’s actual monthly expenses for the categories 

9 specified as Other Necessary Expenses issued by the In10 ternal Revenue Service for the area in which the debtor 

11 resides, as in effect on the date of the order for relief, 

12 for the debtor, the dependents of the debtor, and the 

13 spouse of the debtor in a joint case, if the spouse is not 

14 otherwise a dependent. Such expenses shall include rea15 sonably necessary health insurance, disability insurance, 

16 and health savings account expenses for the debtor, the 

17 spouse of the debtor, or the dependents of the debtor. Not18 withstanding any other provision of this clause, the 

19 monthly expenses of the debtor shall not include any pay20 ments for debts. In addition, the debtor’s monthly ex21 penses shall include the debtor’s reasonably necessary ex22 penses incurred to maintain the safety of the debtor and 

23 the family of the debtor from family violence as identified 

24 under section 309 of the Family Violence Prevention and 

25 Services Act, or other applicable Federal law. The ex-
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1 penses included in the debtor’s monthly expenses de2 scribed in the preceding sentence shall be kept confidential 

3 by the court. In addition, if it is demonstrated that it is 

4 reasonable and necessary, the debtor’s monthly expenses 

5 may also include an additional allowance for food and 

6 clothing of up to 5 percent of the food and clothing cat7 egories as specified by the National Standards issued by 

8 the Internal Revenue Service. 

9 ‘‘(II) In addition, the debtor’s monthly expenses may 

10 include, if applicable, the continuation of actual expenses 

11 paid by the debtor that are reasonable and necessary for 

12 care and support of an elderly, chronically ill, or disabled 

13 household member or member of the debtor’s immediate 

14 family (including parents, grandparents, siblings, children, 

15 and grandchildren of the debtor, the dependents of the 

16 debtor, and the spouse of the debtor in a joint case who 

17 is not a dependent) and who is unable to pay for such 

18 reasonable and necessary expenses. 

19 ‘‘(III) In addition, for a debtor eligible for chapter 

20 13, the debtor’s monthly expenses may include the actual 

21 administrative expenses of administering a chapter 13 

22 plan for the district in which the debtor resides, up to an 

23 amount of 10 percent of the projected plan payments, as 

24 determined under schedules issued by the Executive Office 

25 for United States Trustees. 
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1 ‘‘(IV) In addition, the debtor’s monthly expenses may 

2 include the actual expenses for each dependent child less 

3 than 18 years of age, not to exceed $1,500 per year per 

4 child, to attend a private or public elementary or sec5 ondary school if the debtor provides documentation of such 

6 expenses and a detailed explanation of why such expenses 

7 are reasonable and necessary, and why such expenses are 

8 not already accounted for in the National Standards, 

9 Local Standards, or Other Necessary Expenses referred 

10 to in subclause (I). 

11 ‘‘(V) In addition, the debtor’s monthly expenses may 

12 include an allowance for housing and utilities, in excess 

13 of the allowance specified by the Local Standards for 

14 housing and utilities issued by the Internal Revenue Serv15 ice, based on the actual expenses for home energy costs 

16 if the debtor provides documentation of such actual ex17 penses and demonstrates that such actual expenses are 

18 reasonable and necessary. 

19 ‘‘(iii) The debtor’s average monthly payments on ac20 count of secured debts shall be calculated as the sum of— 

21 ‘‘(I) the total of all amounts scheduled as con22 tractually due to secured creditors in each month of 

23 the 60 months following the date of the petition; and 

24 ‘‘(II) any additional payments to secured credi25 tors necessary for the debtor, in filing a plan under 
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1 chapter 13 of this title, to maintain possession of the 

2 debtor’s primary residence, motor vehicle, or other 

3 property necessary for the support of the debtor and 

4 the debtor’s dependents, that serves as collateral for 

5 secured debts; 

6 divided by 60. 

7 ‘‘(iv) The debtor’s expenses for payment of all pri8 ority claims (including priority child support and alimony 

9 claims) shall be calculated as the total amount of debts 

10 entitled to priority, divided by 60. 

11 ‘‘(B)(i) In any proceeding brought under this sub12 section, the presumption of abuse may only be rebutted 

13 by demonstrating special circumstances, such as a serious 

14 medical condition or a call or order to active duty in the 

15 Armed Forces, to the extent such special circumstances 

16 that justify additional expenses or adjustments of current 

17 monthly income for which there is no reasonable alter18 native. 

19 ‘‘(ii) In order to establish special circumstances, the 

20 debtor shall be required to itemize each additional expense 

21 or adjustment of income and to provide— 

22 ‘‘(I) documentation for such expense or adjust23 ment to income; and 
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1 ‘‘(II) a detailed explanation of the special cir2 cumstances that make such expenses or adjustment 

3 to income necessary and reasonable. 

4 ‘‘(iii) The debtor shall attest under oath to the accu5 racy of any information provided to demonstrate that ad6 ditional expenses or adjustments to income are required. 

7 ‘‘(iv) The presumption of abuse may only be rebutted 

8 if the additional expenses or adjustments to income re9 ferred to in clause (i) cause the product of the debtor’s 

10 current monthly income reduced by the amounts deter11 mined under clauses (ii), (iii), and (iv) of subparagraph 

12 (A) when multiplied by 60 to be less than the lesser of— 

13 ‘‘(I) 25 percent of the debtor’s nonpriority un14 secured claims, or $6,000, whichever is greater; or 

15 ‘‘(II) $10,000. 

16 ‘‘(C) As part of the schedule of current income and 

17 expenditures required under section 521, the debtor shall 

18 include a statement of the debtor’s current monthly in19 come, and the calculations that determine whether a pre20 sumption arises under subparagraph (A)(i), that show how 

21 each such amount is calculated. 

22 ‘‘(D) Subparagraphs (A) through (C) shall not apply, 

23 and the court may not dismiss or convert a case based 

24 on any form of means testing, if the debtor is a disabled 

25 veteran (as defined in section 3741(1) of title 38), and 
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1 the indebtedness occurred primarily during a period dur2 ing which he or she was— 

3 ‘‘(i) on active duty (as defined in section 

4 101(d)(1) of title 10); or 

5 ‘‘(ii) performing a homeland defense activity (as 

6 defined in section 901(1) of title 32). 

7 ‘‘(3) In considering under paragraph (1) whether the 

8 granting of relief would be an abuse of the provisions of 

9 this chapter in a case in which the presumption in sub10 paragraph (A)(i) of such paragraph does not arise or is 

11 rebutted, the court shall consider— 

12 ‘‘(A) whether the debtor filed the petition in 

13 bad faith; or 

14 ‘‘(B) the totality of the circumstances (includ15 ing whether the debtor seeks to reject a personal 

16 services contract and the financial need for such re17 jection as sought by the debtor) of the debtor’s fi18 nancial situation demonstrates abuse. 

19 ‘‘(4)(A) The court, on its own initiative or on the mo20 tion of a party in interest, in accordance with the proce21 dures described in rule 9011 of the Federal Rules of 

22 Bankruptcy Procedure, may order the attorney for the 

23 debtor to reimburse the trustee for all reasonable costs 

24 in prosecuting a motion filed under section 707(b), includ25 ing reasonable attorneys’ fees, if— 
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1 ‘‘(i) a trustee files a motion for dismissal or 

2 conversion under this subsection; and 

3 ‘‘(ii) the court— 

4 ‘‘(I) grants such motion; and 

5 ‘‘(II) finds that the action of the attorney 

6 for the debtor in filing a case under this chap7 ter violated rule 9011 of the Federal Rules of 

8 Bankruptcy Procedure. 

9 ‘‘(B) If the court finds that the attorney for the debt10 or violated rule 9011 of the Federal Rules of Bankruptcy 

11 Procedure, the court, on its own initiative or on the motion 

12 of a party in interest, in accordance with such procedures, 

13 may order— 

14 ‘‘(i) the assessment of an appropriate civil pen15 alty against the attorney for the debtor; and 

16 ‘‘(ii) the payment of such civil penalty to the 

17 trustee, the United States trustee (or the bank18 ruptcy administrator, if any). 

19 ‘‘(C) The signature of an attorney on a petition, 

20 pleading, or written motion shall constitute a certification 

21 that the attorney has— 

22 ‘‘(i) performed a reasonable investigation into 

23 the circumstances that gave rise to the petition, 

24 pleading, or written motion; and 
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1 ‘‘(ii) determined that the petition, pleading, or 

2 written motion— 

3 ‘‘(I) is well grounded in fact; and 

4 ‘‘(II) is warranted by existing law or a 

5 good faith argument for the extension, modi6 fication, or reversal of existing law and does not 

7 constitute an abuse under paragraph (1). 

8 ‘‘(D) The signature of an attorney on the petition 

9 shall constitute a certification that the attorney has no 

10 knowledge after an inquiry that the information in the 

11 schedules filed with such petition is incorrect. 

12 ‘‘(5)(A) Except as provided in subparagraph (B) and 

13 subject to paragraph (6), the court, on its own initiative 

14 or on the motion of a party in interest, in accordance with 

15 the procedures described in rule 9011 of the Federal Rules 

16 of Bankruptcy Procedure, may award a debtor all reason17 able costs (including reasonable attorneys’ fees) in con18 testing a motion filed by a party in interest (other than 

19 a trustee or United States trustee (or bankruptcy adminis20 trator, if any)) under this subsection if— 

21 ‘‘(i) the court does not grant the motion; and 

22 ‘‘(ii) the court finds that— 

23 ‘‘(I) the position of the party that filed the 

24 motion violated rule 9011 of the Federal Rules 

25 of Bankruptcy Procedure; or 
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1 ‘‘(II) the attorney (if any) who filed the 

2 motion did not comply with the requirements of 

3 clauses (i) and (ii) of paragraph (4)(C), and the 

4 motion was made solely for the purpose of co5 ercing a debtor into waiving a right guaranteed 

6 to the debtor under this title. 

7 ‘‘(B) A small business that has a claim of an aggre8 gate amount less than $1,000 shall not be subject to sub9 paragraph (A)(ii)(I). 

10 ‘‘(C) For purposes of this paragraph— 

11 ‘‘(i) the term ‘small business’ means an unin12 corporated business, partnership, corporation, asso13 ciation, or organization that— 

14 ‘‘(I) has fewer than 25 full-time employees 

15 as determined on the date on which the motion 

16 is filed; and 

17 ‘‘(II) is engaged in commercial or business 

18 activity; and 

19 ‘‘(ii) the number of employees of a wholly 

20 owned subsidiary of a corporation includes the em21 ployees of— 

22 ‘‘(I) a parent corporation; and 

23 ‘‘(II) any other subsidiary corporation of 

24 the parent corporation. 
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1 ‘‘(6) Only the judge or United States trustee (or 

2 bankruptcy administrator, if any) may file a motion under 

3 section 707(b), if the current monthly income of the debt4 or, or in a joint case, the debtor and the debtor’s spouse, 

5 as of the date of the order for relief, when multiplied by 

6 12, is equal to or less than— 

7 ‘‘(A) in the case of a debtor in a household of 

8 1 person, the median family income of the applicable 

9 State for 1 earner; 

10 ‘‘(B) in the case of a debtor in a household of 

11 2, 3, or 4 individuals, the highest median family in12 come of the applicable State for a family of the same 

13 number or fewer individuals; or 

14 ‘‘(C) in the case of a debtor in a household ex15 ceeding 4 individuals, the highest median family in16 come of the applicable State for a family of 4 or 

17 fewer individuals, plus $525 per month for each in18 dividual in excess of 4. 

19 ‘‘(7)(A) No judge, United States trustee (or bank20 ruptcy administrator, if any), trustee, or other party in 

21 interest may file a motion under paragraph (2) if the cur22 rent monthly income of the debtor, including a veteran (as 

23 that term is defined in section 101 of title 38), and the 

24 debtor’s spouse combined, as of the date of the order for 

25 relief when multiplied by 12, is equal to or less than— 
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1 ‘‘(i) in the case of a debtor in a household of 

2 1 person, the median family income of the applicable 

3 State for 1 earner; 

4 ‘‘(ii) in the case of a debtor in a household of 

5 2, 3, or 4 individuals, the highest median family in6 come of the applicable State for a family of the same 

7 number or fewer individuals; or 

8 ‘‘(iii) in the case of a debtor in a household ex9 ceeding 4 individuals, the highest median family in10 come of the applicable State for a family of 4 or 

11 fewer individuals, plus $525 per month for each in12 dividual in excess of 4. 

13 ‘‘(B) In a case that is not a joint case, current month14 ly income of the debtor’s spouse shall not be considered 

15 for purposes of subparagraph (A) if— 

16 ‘‘(i)(I) the debtor and the debtor’s spouse are 

17 separated under applicable nonbankruptcy law; or 

18 ‘‘(II) the debtor and the debtor’s spouse are liv19 ing separate and apart, other than for the purpose 

20 of evading subparagraph (A); and 

21 ‘‘(ii) the debtor files a statement under penalty 

22 of perjury— 

23 ‘‘(I) specifying that the debtor meets the 

24 requirement of subclause (I) or (II) of clause 

25 (i); and 
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1 ‘‘(II) disclosing the aggregate, or best esti2 mate of the aggregate, amount of any cash or 

3 money payments received from the debtor’s 

4 spouse attributed to the debtor’s current 

5 monthly income.’’. 

6 (b) DEFINITION.—Section 101 of title 11, United 

7 States Code, is amended by inserting after paragraph (10) 

8 the following: 

9 ‘‘(10A) ‘current monthly income’— 

10 ‘‘(A) means the average monthly income 

11 from all sources that the debtor receives (or in 

12 a joint case the debtor and the debtor’s spouse 

13 receive) without regard to whether such income 

14 is taxable income, derived during the 6-month 

15 period ending on— 

16 ‘‘(i) the last day of the calendar 

17 month immediately preceding the date of 

18 the commencement of the case if the debt19 or files the schedule of current income re20 quired by section 521(a)(1)(B)(ii); or 

21 ‘‘(ii) the date on which current income 

22 is determined by the court for purposes of 

23 this title if the debtor does not file the 

24 schedule of current income required by sec25 tion 521(a)(1)(B)(ii); and 
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1 ‘‘(B) includes any amount paid by any en2 tity other than the debtor (or in a joint case the 

3 debtor and the debtor’s spouse), on a regular 

4 basis for the household expenses of the debtor 

5 or the debtor’s dependents (and in a joint case 

6 the debtor’s spouse if not otherwise a depend7 ent), but excludes benefits received under the 

8 Social Security Act, payments to victims of war 

9 crimes or crimes against humanity on account 

10 of their status as victims of such crimes, and 

11 payments to victims of international terrorism 

12 (as defined in section 2331 of title 18) or do13 mestic terrorism (as defined in section 2331 of 

14 title 18) on account of their status as victims 

15 of such terrorism;’’. 

16 (c) UNITED STATES TRUSTEE AND BANKRUPTCY

17 ADMINISTRATOR DUTIES.—Section 704 of title 11, United 

18 States Code, is amended— 

19 (1) by inserting ‘‘(a)’’ before ‘‘The trustee 

20 shall—’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(b)(1) With respect to a debtor who is an individual 

23 in a case under this chapter— 

24 ‘‘(A) the United States trustee (or the bank25 ruptcy administrator, if any) shall review all mate-
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1 rials filed by the debtor and, not later than 10 days 

2 after the date of the first meeting of creditors, file 

3 with the court a statement as to whether the debt4 or’s case would be presumed to be an abuse under 

5 section 707(b); and 

6 ‘‘(B) not later than 5 days after receiving a 

7 statement under subparagraph (A), the court shall 

8 provide a copy of the statement to all creditors. 

9 ‘‘(2) The United States trustee (or bankruptcy ad10 ministrator, if any) shall, not later than 30 days after the 

11 date of filing a statement under paragraph (1), either file 

12 a motion to dismiss or convert under section 707(b) or 

13 file a statement setting forth the reasons the United 

14 States trustee (or the bankruptcy administrator, if any) 

15 does not consider such a motion to be appropriate, if the 

16 United States trustee (or the bankruptcy administrator, 

17 if any) determines that the debtor’s case should be pre18 sumed to be an abuse under section 707(b) and the prod19 uct of the debtor’s current monthly income, multiplied by 

20 12 is not less than— 

21 ‘‘(A) in the case of a debtor in a household of 

22 1 person, the median family income of the applicable 

23 State for 1 earner; or 

24 ‘‘(B) in the case of a debtor in a household of 

25 2 or more individuals, the highest median family in-
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1 come of the applicable State for a family of the same 

2 number or fewer individuals.’’. 

3 (d) NOTICE.—Section 342 of title 11, United States 

4 Code, is amended by adding at the end the following: 

5 ‘‘(d) In a case under chapter 7 of this title in which 

6 the debtor is an individual and in which the presumption 

7 of abuse arises under section 707(b), the clerk shall give 

8 written notice to all creditors not later than 10 days after 

9 the date of the filing of the petition that the presumption 

10 of abuse has arisen.’’. 

11 (e) NONLIMITATION OF INFORMATION.—Nothing in 

12 this title shall limit the ability of a creditor to provide in13 formation to a judge (except for information commu14 nicated ex parte, unless otherwise permitted by applicable 

15 law), United States trustee (or bankruptcy administrator, 

16 if any), or trustee. 

17 (f) DISMISSAL FOR CERTAIN CRIMES.—Section 707 

18 of title 11, United States Code, is amended by adding at 

19 the end the following: 

20 ‘‘(c)(1) In this subsection— 

21 ‘‘(A) the term ‘crime of violence’ has the mean22 ing given such term in section 16 of title 18; and 

23 ‘‘(B) the term ‘drug trafficking crime’ has the 

24 meaning given such term in section 924(c)(2) of title 

25 18. 
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1 ‘‘(2) Except as provided in paragraph (3), after no2 tice and a hearing, the court, on a motion by the victim 

3 of a crime of violence or a drug trafficking crime, may 

4 when it is in the best interest of the victim dismiss a vol5 untary case filed under this chapter by a debtor who is 

6 an individual if such individual was convicted of such 

7 crime. 

8 ‘‘(3) The court may not dismiss a case under para9 graph (2) if the debtor establishes by a preponderance of 

10 the evidence that the filing of a case under this chapter 

11 is necessary to satisfy a claim for a domestic support obli12 gation.’’. 

13 (g) CONFIRMATION OF PLAN.—Section 1325(a) of 

14 title 11, United States Code, is amended— 

15 (1) in paragraph (5), by striking ‘‘and’’ at the 

16 end; 

17 (2) in paragraph (6), by striking the period and 

18 inserting a semicolon; and 

19 (3) by inserting after paragraph (6) the fol20 lowing: 

21 ‘‘(7) the action of the debtor in filing the peti22 tion was in good faith;’’. 

23 (h) APPLICABILITY OF MEANS TEST TO CHAPTER

24 13.—Section 1325(b) of title 11, United States Code, is 

25 amended— 
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1 (1) in paragraph (1)(B), by inserting ‘‘to unse2 cured creditors’’ after ‘‘to make payments’’; and 

3 (2) by striking paragraph (2) and inserting the 

4 following: 

5 ‘‘(2) For purposes of this subsection, the term 

6 ‘disposable income’ means current monthly income 

7 received by the debtor (other than child support pay8 ments, foster care payments, or disability payments 

9 for a dependent child made in accordance with appli10 cable nonbankruptcy law to the extent reasonably 

11 necessary to be expended for such child) less 

12 amounts reasonably necessary to be expended— 

13 ‘‘(A)(i) for the maintenance or support of 

14 the debtor or a dependent of the debtor, or for 

15 a domestic support obligation, that first be16 comes payable after the date the petition is 

17 filed; and 

18 ‘‘(ii) for charitable contributions (that 

19 meet the definition of ‘charitable contribution’ 

20 under section 548(d)(3) to a qualified religious 

21 or charitable entity or organization (as defined 

22 in section 548(d)(4)) in an amount not to ex23 ceed 15 percent of gross income of the debtor 

24 for the year in which the contributions are 

25 made; and 
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1 ‘‘(B) if the debtor is engaged in business, 

2 for the payment of expenditures necessary for 

3 the continuation, preservation, and operation of 

4 such business. 

5 ‘‘(3) Amounts reasonably necessary to be ex6 pended under paragraph (2) shall be determined in 

7 accordance with subparagraphs (A) and (B) of sec8 tion 707(b)(2), if the debtor has current monthly in9 come, when multiplied by 12, greater than— 

10 ‘‘(A) in the case of a debtor in a household 

11 of 1 person, the median family income of the 

12 applicable State for 1 earner; 

13 ‘‘(B) in the case of a debtor in a household 

14 of 2, 3, or 4 individuals, the highest median 

15 family income of the applicable State for a fam16 ily of the same number or fewer individuals; or 

17 ‘‘(C) in the case of a debtor in a household 

18 exceeding 4 individuals, the highest median 

19 family income of the applicable State for a fam20 ily of 4 or fewer individuals, plus $525 per 

21 month for each individual in excess of 4.’’. 

22 (i) SPECIAL ALLOWANCE FOR HEALTH INSUR23 ANCE.—Section 1329(a) of title 11, United States Code, 

24 is amended— 
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1 (1) in paragraph (2) by striking ‘‘or’’ at the 

2 end; 

3 (2) in paragraph (3) by striking the period at 

4 the end and inserting ‘‘; or’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(4) reduce amounts to be paid under the plan 

7 by the actual amount expended by the debtor to pur8 chase health insurance for the debtor (and for any 

9 dependent of the debtor if such dependent does not 

10 otherwise have health insurance coverage) if the 

11 debtor documents the cost of such insurance and 

12 demonstrates that— 

13 ‘‘(A) such expenses are reasonable and 

14 necessary; 

15 ‘‘(B)(i) if the debtor previously paid for 

16 health insurance, the amount is not materially 

17 larger than the cost the debtor previously paid 

18 or the cost necessary to maintain the lapsed 

19 policy; or 

20 ‘‘(ii) if the debtor did not have health in21 surance, the amount is not materially larger 

22 than the reasonable cost that would be incurred 

23 by a debtor who purchases health insurance, 

24 who has similar income, expenses, age, and 

25 health status, and who lives in the same geo-
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1 graphical location with the same number of de2 pendents who do not otherwise have health in3 surance coverage; and 

4 ‘‘(C) the amount is not otherwise allowed 

5 for purposes of determining disposable income 

6 under section 1325(b) of this title; 

7 and upon request of any party in interest, files proof 

8 that a health insurance policy was purchased.’’. 

9 (j) ADJUSTMENT OF DOLLAR AMOUNTS.—Section 

10 104(b) of title 11, United States Code, is amended by 

11 striking ‘‘and 523(a)(2)(C)’’ each place it appears and in12 serting ‘‘523(a)(2)(C), 707(b), and 1325(b)(3)’’. 

13 (k) DEFINITION OF ‘MEDIAN FAMILY INCOME’.— 

14 Section 101 of title 11, United States Code, is amended 

15 by inserting after paragraph (39) the following: 

16 ‘‘(39A) ‘median family income’ means for any 

17 year— 

18 ‘‘(A) the median family income both cal19 culated and reported by the Bureau of the Cen20 sus in the then most recent year; and 

21 ‘‘(B) if not so calculated and reported in 

22 the then current year, adjusted annually after 

23 such most recent year until the next year in 

24 which median family income is both calculated 

25 and reported by the Bureau of the Census, to 
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1 reflect the percentage change in the Consumer 

2 Price Index for All Urban Consumers during 

3 the period of years occurring after such most 

4 recent year and before such current year;’’. 

5 (k) CLERICAL AMENDMENT.—The table of sections 

6 for chapter 7 of title 11, United States Code, is amended 

7 by striking the item relating to section 707 and inserting 

8 the following: 

‘‘707. Dismissal of a case or conversion to a case under chapter 11 or 13.’’. 

9 SEC. 103. SENSE OF CONGRESS AND STUDY. 

10 (a) SENSE OF CONGRESS.—It is the sense of Con11 gress that the Secretary of the Treasury has the authority 

12 to alter the Internal Revenue Service standards estab13 lished to set guidelines for repayment plans as needed to 

14 accommodate their use under section 707(b) of title 11, 

15 United States Code. 

16 (b) STUDY.— 

17 (1) IN GENERAL.—Not later than 2 years after 

18 the date of enactment of this Act, the Director of 

19 the Executive Office for United States Trustees shall 

20 submit a report to the Committee on the Judiciary 

21 of the Senate and the Committee on the Judiciary 

22 of the House of Representatives containing the find23 ings of the Director regarding the utilization of In24 ternal Revenue Service standards for determining— 
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1 (A) the current monthly expenses of a 

2 debtor under section 707(b) of title 11, United 

3 States Code; and 

4 (B) the impact that the application of such 

5 standards has had on debtors and on the bank6 ruptcy courts. 

7 (2) RECOMMENDATION.—The report under 

8 paragraph (1) may include recommendations for 

9 amendments to title 11, United States Code, that 

10 are consistent with the findings of the Director 

11 under paragraph (1). 

12 SEC. 104. NOTICE OF ALTERNATIVES. 

13 Section 342(b) of title 11, United States Code, is 

14 amended to read as follows: 

15 ‘‘(b) Before the commencement of a case under this 

16 title by an individual whose debts are primarily consumer 

17 debts, the clerk shall give to such individual written notice 

18 containing— 

19 ‘‘(1) a brief description of— 

20 ‘‘(A) chapters 7, 11, 12, and 13 and the 

21 general purpose, benefits, and costs of pro22 ceeding under each of those chapters; and 

23 ‘‘(B) the types of services available from 

24 credit counseling agencies; and 

25 ‘‘(2) statements specifying that— 
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1 ‘‘(A) a person who knowingly and fraudu2 lently conceals assets or makes a false oath or 

3 statement under penalty of perjury in connec4 tion with a case under this title shall be subject 

5 to fine, imprisonment, or both; and 

6 ‘‘(B) all information supplied by a debtor 

7 in connection with a case under this title is sub8 ject to examination by the Attorney General.’’. 

9 SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING 

10 TEST PROGRAM. 

11 (a) DEVELOPMENT OF FINANCIAL MANAGEMENT

12 AND TRAINING CURRICULUM AND MATERIALS.—The Di13 rector of the Executive Office for United States Trustees 

14 (in this section referred to as the ‘‘Director’’) shall consult 

15 with a wide range of individuals who are experts in the 

16 field of debtor education, including trustees who serve in 

17 cases under chapter 13 of title 11, United States Code, 

18 and who operate financial management education pro19 grams for debtors, and shall develop a financial manage20 ment training curriculum and materials that can be used 

21 to educate debtors who are individuals on how to better 

22 manage their finances. 

23 (b) TEST.— 

24 (1) SELECTION OF DISTRICTS.—The Director 

25 shall select 6 judicial districts of the United States 
32 

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1 in which to test the effectiveness of the financial 

2 management training curriculum and materials de3 veloped under subsection (a). 

4 (2) USE.—For an 18-month period beginning 

5 not later than 270 days after the date of the enact6 ment of this Act, such curriculum and materials 

7 shall be, for the 6 judicial districts selected under 

8 paragraph (1), used as the instructional course con9 cerning personal financial management for purposes 

10 of section 111 of title 11, United States Code. 

11 (c) EVALUATION.— 

12 (1) IN GENERAL.—During the 18-month period 

13 referred to in subsection (b), the Director shall 

14 evaluate the effectiveness of— 

15 (A) the financial management training cur16 riculum and materials developed under sub17 section (a); and 

18 (B) a sample of existing consumer edu19 cation programs such as those described in the 

20 Report of the National Bankruptcy Review 

21 Commission (October 20, 1997) that are rep22 resentative of consumer education programs 

23 carried out by the credit industry, by trustees 

24 serving under chapter 13 of title 11, United 
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1 States Code, and by consumer counseling 

2 groups. 

3 (2) REPORT.—Not later than 3 months after 

4 concluding such evaluation, the Director shall sub5 mit a report to the Speaker of the House of Rep6 resentatives and the President pro tempore of the 

7 Senate, for referral to the appropriate committees of 

8 the Congress, containing the findings of the Director 

9 regarding the effectiveness of such curriculum, such 

10 materials, and such programs and their costs. 

11 SEC. 106. CREDIT COUNSELING. 

12 (a) WHO MAY BE A DEBTOR.—Section 109 of title 

13 11, United States Code, is amended by adding at the end 

14 the following: 

15 ‘‘(h)(1) Subject to paragraphs (2) and (3), and not16 withstanding any other provision of this section, an indi17 vidual may not be a debtor under this title unless such 

18 individual has, during the 180-day period preceding the 

19 date of filing of the petition by such individual, received 

20 from an approved nonprofit budget and credit counseling 

21 agency described in section 111(a) an individual or group 

22 briefing (including a briefing conducted by telephone or 

23 on the Internet) that outlined the opportunities for avail24 able credit counseling and assisted such individual in per25 forming a related budget analysis. 
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1 ‘‘(2)(A) Paragraph (1) shall not apply with respect 

2 to a debtor who resides in a district for which the United 

3 States trustee (or the bankruptcy administrator, if any) 

4 determines that the approved nonprofit budget and credit 

5 counseling agencies for such district are not reasonably 

6 able to provide adequate services to the additional individ7 uals who would otherwise seek credit counseling from such 

8 agencies by reason of the requirements of paragraph (1). 

9 ‘‘(B) The United States trustee (or the bankruptcy 

10 administrator, if any) who makes a determination de11 scribed in subparagraph (A) shall review such determina12 tion not later than 1 year after the date of such deter13 mination, and not less frequently than annually thereafter. 

14 Notwithstanding the preceding sentence, a nonprofit 

15 budget and credit counseling agency may be disapproved 

16 by the United States trustee (or the bankruptcy adminis17 trator, if any) at any time. 

18 ‘‘(3)(A) Subject to subparagraph (B), the require19 ments of paragraph (1) shall not apply with respect to 

20 a debtor who submits to the court a certification that— 

21 ‘‘(i) describes exigent circumstances that merit 

22 a waiver of the requirements of paragraph (1); 

23 ‘‘(ii) states that the debtor requested credit 

24 counseling services from an approved nonprofit 

25 budget and credit counseling agency, but was unable 
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1 to obtain the services referred to in paragraph (1) 

2 during the 5-day period beginning on the date on 

3 which the debtor made that request; and 

4 ‘‘(iii) is satisfactory to the court. 

5 ‘‘(B) With respect to a debtor, an exemption under 

6 subparagraph (A) shall cease to apply to that debtor on 

7 the date on which the debtor meets the requirements of 

8 paragraph (1), but in no case may the exemption apply 

9 to that debtor after the date that is 30 days after the debt10 or files a petition, except that the court, for cause, may 

11 order an additional 15 days. 

12 ‘‘(4) The requirements of paragraph (1) shall not 

13 apply with respect to a debtor whom the court determines, 

14 after notice and hearing, is unable to complete those re15 quirements because of incapacity, disability, or active mili16 tary duty in a military combat zone. For the purposes of 

17 this paragraph, incapacity means that the debtor is im18 paired by reason of mental illness or mental deficiency so 

19 that he is incapable of realizing and making rational deci20 sions with respect to his financial responsibilities; and 

21 ‘‘disability’’ means that the debtor is so physically im22 paired as to be unable, after reasonable effort, to partici23 pate in an in person, telephone, or Internet briefing re24 quired under paragraph (1).’’. 
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1 (b) CHAPTER 7 DISCHARGE.—Section 727(a) of title 

2 11, United States Code, is amended— 

3 (1) in paragraph (9), by striking ‘‘or’’ at the 

4 end; 

5 (2) in paragraph (10), by striking the period 

6 and inserting ‘‘; or’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(11) after filing the petition, the debtor failed 

9 to complete an instructional course concerning per10 sonal financial management described in section 

11 111, except that this paragraph shall not apply with 

12 respect to a debtor who is a person described in sec13 tion 109(h)(4) or who resides in a district for which 

14 the United States trustee (or the bankruptcy admin15 istrator, if any) determines that the approved in16 structional courses are not adequate to service the 

17 additional individuals who would otherwise be re18 quired to complete such instructional courses under 

19 this section (The United States trustee (or the bank20 ruptcy administrator, if any) who makes a deter21 mination described in this paragraph shall review 

22 such determination not later than 1 year after the 

23 date of such determination, and not less frequently 

24 than annually thereafter.).’’. 
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1 (c) CHAPTER 13 DISCHARGE.—Section 1328 of title 

2 11, United States Code, is amended by adding at the end 

3 the following: 

4 ‘‘(g)(1) The court shall not grant a discharge under 

5 this section to a debtor unless after filing a petition the 

6 debtor has completed an instructional course concerning 

7 personal financial management described in section 111. 

8 ‘‘(2) Paragraph (1) shall not apply with respect to 

9 a debtor who is a person described in section 109(h)(4) 

10 or who resides in a district for which the United States 

11 trustee (or the bankruptcy administrator, if any) deter12 mines that the approved instructional courses are not ade13 quate to service the additional individuals who would oth14 erwise be required to complete such instructional course 

15 by reason of the requirements of paragraph (1). 

16 ‘‘(3) The United States trustee (or the bankruptcy 

17 administrator, if any) who makes a determination de18 scribed in paragraph (2) shall review such determination 

19 not later than 1 year after the date of such determination, 

20 and not less frequently than annually thereafter.’’. 

21 (d) DEBTOR’S DUTIES.—Section 521 of title 11, 

22 United States Code, is amended— 

23 (1) by inserting ‘‘(a)’’ before ‘‘The debtor 

24 shall—’’; and 

25 (2) by adding at the end the following: 
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1 ‘‘(b) In addition to the requirements under subsection 

2 (a), a debtor who is an individual shall file with the 

3 court— 

4 ‘‘(1) a certificate from the approved nonprofit 

5 budget and credit counseling agency that provided 

6 the debtor services under section 109(h) describing 

7 the services provided to the debtor; and 

8 ‘‘(2) a copy of the debt repayment plan, if any, 

9 developed under section 109(h) through the ap10 proved nonprofit budget and credit counseling agen11 cy referred to in paragraph (1).’’. 

12 (e) GENERAL PROVISIONS.— 

13 (1) IN GENERAL.—Chapter 1 of title 11, United 

14 States Code, is amended by adding at the end the 

15 following: 

16 ‘‘§ 111. Nonprofit budget and credit counseling agen17 cies; financial management instructional 

18 courses 

19 ‘‘(a) The clerk shall maintain a publicly available list 

20 of— 

21 ‘‘(1) nonprofit budget and credit counseling 

22 agencies that provide 1 or more services described in 

23 section 109(h) currently approved by the United 

24 States trustee (or the bankruptcy administrator, if 

25 any); and 
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1 ‘‘(2) instructional courses concerning personal 

2 financial management currently approved by the 

3 United States trustee (or the bankruptcy adminis4 trator, if any), as applicable. 

5 ‘‘(b) The United States trustee (or bankruptcy ad6 ministrator, if any) shall only approve a nonprofit budget 

7 and credit counseling agency or an instructional course 

8 concerning personal financial management as follows: 

9 ‘‘(1) The United States trustee (or bankruptcy 

10 administrator, if any) shall have thoroughly reviewed 

11 the qualifications of the nonprofit budget and credit 

12 counseling agency or of the provider of the instruc13 tional course under the standards set forth in this 

14 section, and the services or instructional courses 

15 that will be offered by such agency or such provider, 

16 and may require such agency or such provider that 

17 has sought approval to provide information with re18 spect to such review. 

19 ‘‘(2) The United States trustee (or bankruptcy 

20 administrator, if any) shall have determined that 

21 such agency or such instructional course fully satis22 fies the applicable standards set forth in this section. 

23 ‘‘(3) If a nonprofit budget and credit counseling 

24 agency or instructional course did not appear on the 

25 approved list for the district under subsection (a) 
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1 immediately before approval under this section, ap2 proval under this subsection of such agency or such 

3 instructional course shall be for a probationary pe4 riod not to exceed 6 months. 

5 ‘‘(4) At the conclusion of the applicable proba6 tionary period under paragraph (3), the United 

7 States trustee (or bankruptcy administrator, if any) 

8 may only approve for an additional 1-year period, 

9 and for successive 1-year periods thereafter, an 

10 agency or instructional course that has dem11 onstrated during the probationary or applicable sub12 sequent period of approval that such agency or in13 structional course— 

14 ‘‘(A) has met the standards set forth under 

15 this section during such period; and 

16 ‘‘(B) can satisfy such standards in the fu17 ture. 

18 ‘‘(5) Not later than 30 days after any final de19 cision under paragraph (4), an interested person 

20 may seek judicial review of such decision in the ap21 propriate district court of the United States. 

22 ‘‘(c)(1) The United States trustee (or the bankruptcy 

23 administrator, if any) shall only approve a nonprofit budg24 et and credit counseling agency that demonstrates that it 

25 will provide qualified counselors, maintain adequate provi-
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1 sion for safekeeping and payment of client funds, provide 

2 adequate counseling with respect to client credit problems, 

3 and deal responsibly and effectively with other matters re4 lating to the quality, effectiveness, and financial security 

5 of the services it provides. 

6 ‘‘(2) To be approved by the United States trustee (or 

7 the bankruptcy administrator, if any), a nonprofit budget 

8 and credit counseling agency shall, at a minimum— 

9 ‘‘(A) have a board of directors the majority of 

10 which— 

11 ‘‘(i) are not employed by such agency; and 

12 ‘‘(ii) will not directly or indirectly benefit 

13 financially from the outcome of the counseling 

14 services provided by such agency; 

15 ‘‘(B) if a fee is charged for counseling services, 

16 charge a reasonable fee, and provide services without 

17 regard to ability to pay the fee; 

18 ‘‘(C) provide for safekeeping and payment of 

19 client funds, including an annual audit of the trust 

20 accounts and appropriate employee bonding; 

21 ‘‘(D) provide full disclosures to a client, includ22 ing funding sources, counselor qualifications, pos23 sible impact on credit reports, and any costs of such 

24 program that will be paid by such client and how 

25 such costs will be paid; 
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1 ‘‘(E) provide adequate counseling with respect 

2 to a client’s credit problems that includes an anal3 ysis of such client’s current financial condition, fac4 tors that caused such financial condition, and how 

5 such client can develop a plan to respond to the 

6 problems without incurring negative amortization of 

7 debt; 

8 ‘‘(F) provide trained counselors who receive no 

9 commissions or bonuses based on the outcome of the 

10 counseling services provided by such agency, and 

11 who have adequate experience, and have been ade12 quately trained to provide counseling services to in13 dividuals in financial difficulty, including the mat14 ters described in subparagraph (E); 

15 ‘‘(G) demonstrate adequate experience and 

16 background in providing credit counseling; and 

17 ‘‘(H) have adequate financial resources to pro18 vide continuing support services for budgeting plans 

19 over the life of any repayment plan. 

20 ‘‘(d) The United States trustee (or the bankruptcy 

21 administrator, if any) shall only approve an instructional 

22 course concerning personal financial management— 

23 ‘‘(1) for an initial probationary period under 

24 subsection (b)(3) if the course will provide at a min25 imum— 
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1 ‘‘(A) trained personnel with adequate expe2 rience and training in providing effective in3 struction and services; 

4 ‘‘(B) learning materials and teaching 

5 methodologies designed to assist debtors in un6 derstanding personal financial management and 

7 that are consistent with stated objectives di8 rectly related to the goals of such instructional 

9 course; 

10 ‘‘(C) adequate facilities situated in reason11 ably convenient locations at which such instruc12 tional course is offered, except that such facili13 ties may include the provision of such instruc14 tional course by telephone or through the Inter15 net, if such instructional course is effective; 

16 ‘‘(D) the preparation and retention of rea17 sonable records (which shall include the debt18 or’s bankruptcy case number) to permit evalua19 tion of the effectiveness of such instructional 

20 course, including any evaluation of satisfaction 

21 of instructional course requirements for each 

22 debtor attending such instructional course, 

23 which shall be available for inspection and eval24 uation by the Executive Office for United 

25 States Trustees, the United States trustee (or 
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1 the bankruptcy administrator, if any), or the 

2 chief bankruptcy judge for the district in which 

3 such instructional course is offered; and 

4 ‘‘(E) if a fee is charged for the instructional 

5 course, charge a reasonable fee, and provide services 

6 without regard to ability to pay the fee. 

7 ‘‘(2) for any 1-year period if the provider there8 of has demonstrated that the course meets the 

9 standards of paragraph (1) and, in addition— 

10 ‘‘(A) has been effective in assisting a sub11 stantial number of debtors to understand per12 sonal financial management; and 

13 ‘‘(B) is otherwise likely to increase sub14 stantially the debtor’s understanding of per15 sonal financial management. 

16 ‘‘(e) The district court may, at any time, investigate 

17 the qualifications of a nonprofit budget and credit coun18 seling agency referred to in subsection (a), and request 

19 production of documents to ensure the integrity and effec20 tiveness of such agency. The district court may, at any 

21 time, remove from the approved list under subsection (a) 

22 a nonprofit budget and credit counseling agency upon 

23 finding such agency does not meet the qualifications of 

24 subsection (b). 
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1 ‘‘(f) The United States trustee (or the bankruptcy ad2 ministrator, if any) shall notify the clerk that a nonprofit 

3 budget and credit counseling agency or an instructional 

4 course is no longer approved, in which case the clerk shall 

5 remove it from the list maintained under subsection (a). 

6 ‘‘(g)(1) No nonprofit budget and credit counseling 

7 agency may provide to a credit reporting agency informa8 tion concerning whether a debtor has received or sought 

9 instruction concerning personal financial management 

10 from such agency. 

11 ‘‘(2) A nonprofit budget and credit counseling agency 

12 that willfully or negligently fails to comply with any re13 quirement under this title with respect to a debtor shall 

14 be liable for damages in an amount equal to the sum of— 

15 ‘‘(A) any actual damages sustained by the debt16 or as a result of the violation; and 

17 ‘‘(B) any court costs or reasonable attorneys’ 

18 fees (as determined by the court) incurred in an ac19 tion to recover those damages.’’. 

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions for chapter 1 of title 11, United States Code, 

22 is amended by adding at the end the following: 

‘‘111. Nonprofit budget and credit counseling agencies; financial management 

instructional courses.’’. 
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1 (f) LIMITATION.—Section 362 of title 11, United 

2 States Code, is amended by adding at the end the fol3 lowing: 

4 ‘‘(i) If a case commenced under chapter 7, 11, or 13 

5 is dismissed due to the creation of a debt repayment plan, 

6 for purposes of subsection (c)(3), any subsequent case 

7 commenced by the debtor under any such chapter shall 

8 not be presumed to be filed not in good faith. 

9 ‘‘(j) On request of a party in interest, the court shall 

10 issue an order under subsection (c) confirming that the 

11 automatic stay has been terminated.’’. 

12 SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY 

13 EXPENSES. 

14 For purposes of section 707(b) of title 11, United 

15 States Code, as amended by this Act, the Director of the 

16 Executive Office for United States Trustees shall, not 

17 later than 180 days after the date of enactment of this 

18 Act, issue schedules of reasonable and necessary adminis19 trative expenses of administering a chapter 13 plan for 

20 each judicial district of the United States. 
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1 TITLE II—ENHANCED 

2 CONSUMER PROTECTION 

3 Subtitle A—Penalties for Abusive 

4 Creditor Practices 

5 SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLU6 TION. 

7 (a) REDUCTION OF CLAIM.—Section 502 of title 11, 

8 United States Code, is amended by adding at the end the 

9 following: 

10 ‘‘(k)(1) The court, on the motion of the debtor and 

11 after a hearing, may reduce a claim filed under this sec12 tion based in whole on an unsecured consumer debt by 

13 not more than 20 percent of the claim, if— 

14 ‘‘(A) the claim was filed by a creditor who un15 reasonably refused to negotiate a reasonable alter16 native repayment schedule proposed on behalf of the 

17 debtor by an approved nonprofit budget and credit 

18 counseling agency described in section 111; 

19 ‘‘(B) the offer of the debtor under subpara20 graph (A)— 

21 ‘‘(i) was made at least 60 days before the 

22 date of the filing of the petition; and 

23 ‘‘(ii) provided for payment of at least 60 

24 percent of the amount of the debt over a period 
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1 not to exceed the repayment period of the loan, 

2 or a reasonable extension thereof; and 

3 ‘‘(C) no part of the debt under the alternative 

4 repayment schedule is nondischargeable. 

5 ‘‘(2) The debtor shall have the burden of proving, by 

6 clear and convincing evidence, that— 

7 ‘‘(A) the creditor unreasonably refused to con8 sider the debtor’s proposal; and 

9 ‘‘(B) the proposed alternative repayment sched10 ule was made prior to expiration of the 60-day pe11 riod specified in paragraph (1)(B)(i).’’. 

12 (b) LIMITATION ON AVOIDABILITY.—Section 547 of 

13 title 11, United States Code, is amended by adding at the 

14 end the following: 

15 ‘‘(h) The trustee may not avoid a transfer if such 

16 transfer was made as a part of an alternative repayment 

17 schedule between the debtor and any creditor of the debtor 

18 created by an approved nonprofit budget and credit coun19 seling agency.’’. 

20 SEC. 202. EFFECT OF DISCHARGE. 

21 Section 524 of title 11, United States Code, is 

22 amended by adding at the end the following: 

23 ‘‘(i) The willful failure of a creditor to credit pay24 ments received under a plan confirmed under this title, 

25 unless the order confirming the plan is revoked, the plan 
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1 is in default, or the creditor has not received payments 

2 required to be made under the plan in the manner re3 quired by the plan (including crediting the amounts re4 quired under the plan), shall constitute a violation of an 

5 injunction under subsection (a)(2) if the act of the creditor 

6 to collect and failure to credit payments in the manner 

7 required by the plan caused material injury to the debtor. 

8 ‘‘(j) Subsection (a)(2) does not operate as an injunc9 tion against an act by a creditor that is the holder of a 

10 secured claim, if— 

11 ‘‘(1) such creditor retains a security interest in 

12 real property that is the principal residence of the 

13 debtor; 

14 ‘‘(2) such act is in the ordinary course of busi15 ness between the creditor and the debtor; and 

16 ‘‘(3) such act is limited to seeking or obtaining 

17 periodic payments associated with a valid security 

18 interest in lieu of pursuit of in rem relief to enforce 

19 the lien.’’. 

20 SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION 

21 AGREEMENT PRACTICES. 

22 (a) IN GENERAL.—Section 524 of title 11, United 

23 States Code, as amended section 202, is amended— 

24 (1) in subsection (c), by striking paragraph (2) 

25 and inserting the following: 
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1 ‘‘(2) the debtor received the disclosures de2 scribed in subsection (k) at or before the time at 

3 which the debtor signed the agreement;’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(k)(1) The disclosures required under subsection 

6 (c)(2) shall consist of the disclosure statement described 

7 in paragraph (3), completed as required in that para8 graph, together with the agreement specified in subsection 

9 (c), statement, declaration, motion and order described, 

10 respectively, in paragraphs (4) through (8), and shall be 

11 the only disclosures required in connection with entering 

12 into such agreement. 

13 ‘‘(2) Disclosures made under paragraph (1) shall be 

14 made clearly and conspicuously and in writing. The terms 

15 ‘Amount Reaffirmed’ and ‘Annual Percentage Rate’ shall 

16 be disclosed more conspicuously than other terms, data or 

17 information provided in connection with this disclosure, 

18 except that the phrases ‘Before agreeing to reaffirm a 

19 debt, review these important disclosures’ and ‘Summary 

20 of Reaffirmation Agreement’ may be equally conspicuous. 

21 Disclosures may be made in a different order and may 

22 use terminology different from that set forth in para23 graphs (2) through (8), except that the terms ‘Amount 

24 Reaffirmed’ and ‘Annual Percentage Rate’ must be used 

25 where indicated. 
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1 ‘‘(3) The disclosure statement required under this 

2 paragraph shall consist of the following: 

3 ‘‘(A) The statement: ‘Part A: Before agreeing 

4 to reaffirm a debt, review these important disclo5 sures:’; 

6 ‘‘(B) Under the heading ‘Summary of Reaffir7 mation Agreement’, the statement: ‘This Summary 

8 is made pursuant to the requirements of the Bank9 ruptcy Code’; 

10 ‘‘(C) The ‘Amount Reaffirmed’, using that 

11 term, which shall be— 

12 ‘‘(i) the total amount of debt that the debt13 or agrees to reaffirm by entering into an agree14 ment of the kind specified in subsection (c), and 

15 ‘‘(ii) the total of any fees and costs ac16 crued as of the date of the disclosure statement, 

17 related to such total amount. 

18 ‘‘(D) In conjunction with the disclosure of the 

19 ‘Amount Reaffirmed’, the statements— 

20 ‘‘(i) ‘The amount of debt you have agreed 

21 to reaffirm’; and 

22 ‘‘(ii) ‘Your credit agreement may obligate 

23 you to pay additional amounts which may come 

24 due after the date of this disclosure. Consult 

25 your credit agreement.’. 
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1 ‘‘(E) The ‘Annual Percentage Rate’, using that 

2 term, which shall be disclosed as— 

3 ‘‘(i) if, at the time the petition is filed, the 

4 debt is an extension of credit under an open 

5 end credit plan, as the terms ‘credit’ and ‘open 

6 end credit plan’ are defined in section 103 of 

7 the Truth in Lending Act, then— 

8 ‘‘(I) the annual percentage rate deter9 mined under paragraphs (5) and (6) of 

10 section 127(b) of the Truth in Lending 

11 Act, as applicable, as disclosed to the debt12 or in the most recent periodic statement 

13 prior to entering into an agreement of the 

14 kind specified in subsection (c) or, if no 

15 such periodic statement has been given to 

16 the debtor during the prior 6 months, the 

17 annual percentage rate as it would have 

18 been so disclosed at the time the disclosure 

19 statement is given to the debtor, or to the 

20 extent this annual percentage rate is not 

21 readily available or not applicable, then 

22 ‘‘(II) the simple interest rate applica23 ble to the amount reaffirmed as of the date 

24 the disclosure statement is given to the 

25 debtor, or if different simple interest rates 
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1 apply to different balances, the simple in2 terest rate applicable to each such balance, 

3 identifying the amount of each such bal4 ance included in the amount reaffirmed, or 

5 ‘‘(III) if the entity making the disclo6 sure elects, to disclose the annual percent7 age rate under subclause (I) and the sim8 ple interest rate under subclause (II); or 

9 ‘‘(ii) if, at the time the petition is filed, the 

10 debt is an extension of credit other than under 

11 an open end credit plan, as the terms ‘credit’ 

12 and ‘open end credit plan’ are defined in section 

13 103 of the Truth in Lending Act, then— 

14 ‘‘(I) the annual percentage rate under 

15 section 128(a)(4) of the Truth in Lending 

16 Act, as disclosed to the debtor in the most 

17 recent disclosure statement given to the 

18 debtor prior to the entering into an agree19 ment of the kind specified in subsection (c) 

20 with respect to the debt, or, if no such dis21 closure statement was given to the debtor, 

22 the annual percentage rate as it would 

23 have been so disclosed at the time the dis24 closure statement is given to the debtor, or 
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1 to the extent this annual percentage rate is 

2 not readily available or not applicable, then 

3 ‘‘(II) the simple interest rate applica4 ble to the amount reaffirmed as of the date 

5 the disclosure statement is given to the 

6 debtor, or if different simple interest rates 

7 apply to different balances, the simple in8 terest rate applicable to each such balance, 

9 identifying the amount of such balance in10 cluded in the amount reaffirmed, or 

11 ‘‘(III) if the entity making the disclo12 sure elects, to disclose the annual percent13 age rate under (I) and the simple interest 

14 rate under (II). 

15 ‘‘(F) If the underlying debt transaction was dis16 closed as a variable rate transaction on the most re17 cent disclosure given under the Truth in Lending 

18 Act, by stating ‘The interest rate on your loan may 

19 be a variable interest rate which changes from time 

20 to time, so that the annual percentage rate disclosed 

21 here may be higher or lower.’. 

22 ‘‘(G) If the debt is secured by a security inter23 est which has not been waived in whole or in part 

24 or determined to be void by a final order of the 

25 court at the time of the disclosure, by disclosing that 
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1 a security interest or lien in goods or property is as2 serted over some or all of the debts the debtor is re3 affirming and listing the items and their original 

4 purchase price that are subject to the asserted secu5 rity interest, or if not a purchase-money security in6 terest then listing by items or types and the original 

7 amount of the loan. 

8 ‘‘(H) At the election of the creditor, a state9 ment of the repayment schedule using 1 or a com10 bination of the following— 

11 ‘‘(i) by making the statement: ‘Your first 

12 payment in the amount of $lll is due on 

13 lll but the future payment amount may be 

14 different. Consult your reaffirmation agreement 

15 or credit agreement, as applicable.’, and stating 

16 the amount of the first payment and the due 

17 date of that payment in the places provided; 

18 ‘‘(ii) by making the statement: ‘Your pay19 ment schedule will be:’, and describing the re20 payment schedule with the number, amount, 

21 and due dates or period of payments scheduled 

22 to repay the debts reaffirmed to the extent then 

23 known by the disclosing party; or 
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1 ‘‘(iii) by describing the debtor’s repayment 

2 obligations with reasonable specificity to the ex3 tent then known by the disclosing party. 

4 ‘‘(I) The following statement: ‘Note: When this 

5 disclosure refers to what a creditor ‘‘may’’ do, it 

6 does not use the word ‘‘may’’ to give the creditor 

7 specific permission. The word ‘‘may’’ is used to tell 

8 you what might occur if the law permits the creditor 

9 to take the action. If you have questions about your 

10 reaffirming a debt or what the law requires, consult 

11 with the attorney who helped you negotiate this 

12 agreement reaffirming a debt. If you don’t have an 

13 attorney helping you, the judge will explain the ef14 fect of your reaffirming a debt when the hearing on 

15 the reaffirmation agreement is held.’. 

16 ‘‘(J)(i) The following additional statements: 

17 ‘‘ ‘Reaffirming a debt is a serious financial decision. 

18 The law requires you to take certain steps to make sure 

19 the decision is in your best interest. If these steps are not 

20 completed, the reaffirmation agreement is not effective, 

21 even though you have signed it. 

22 ‘‘ ‘1. Read the disclosures in this Part A care23 fully. Consider the decision to reaffirm carefully. 

24 Then, if you want to reaffirm, sign the reaffirmation 
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1 agreement in Part B (or you may use a separate 

2 agreement you and your creditor agree on). 

3 ‘‘ ‘2. Complete and sign Part D and be sure you 

4 can afford to make the payments you are agreeing 

5 to make and have received a copy of the disclosure 

6 statement and a completed and signed reaffirmation 

7 agreement. 

8 ‘‘ ‘3. If you were represented by an attorney 

9 during the negotiation of your reaffirmation agree10 ment, the attorney must have signed the certification 

11 in Part C. 

12 ‘‘ ‘4. If you were not represented by an attorney 

13 during the negotiation of your reaffirmation agree14 ment, you must have completed and signed Part E. 

15 ‘‘ ‘5. The original of this disclosure must be 

16 filed with the court by you or your creditor. If a sep17 arate reaffirmation agreement (other than the one in 

18 Part B) has been signed, it must be attached. 

19 ‘‘ ‘6. If you were represented by an attorney 

20 during the negotiation of your reaffirmation agree21 ment, your reaffirmation agreement becomes effec22 tive upon filing with the court unless the reaffirma23 tion is presumed to be an undue hardship as ex24 plained in Part D. 
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1 ‘‘ ‘7. If you were not represented by an attorney 

2 during the negotiation of your reaffirmation agree3 ment, it will not be effective unless the court ap4 proves it. The court will notify you of the hearing on 

5 your reaffirmation agreement. You must attend this 

6 hearing in bankruptcy court where the judge will re7 view your reaffirmation agreement. The bankruptcy 

8 court must approve your reaffirmation agreement as 

9 consistent with your best interests, except that no 

10 court approval is required if your reaffirmation 

11 agreement is for a consumer debt secured by a mort12 gage, deed of trust, security deed, or other lien on 

13 your real property, like your home. 

14 ‘‘ ‘Your right to rescind (cancel) your reaffirmation 

15 agreement. You may rescind (cancel) your reaffirmation 

16 agreement at any time before the bankruptcy court enters 

17 a discharge order, or before the expiration of the 60-day 

18 period that begins on the date your reaffirmation agree19 ment is filed with the court, whichever occurs later. To 

20 rescind (cancel) your reaffirmation agreement, you must 

21 notify the creditor that your reaffirmation agreement is 

22 rescinded (or canceled). 

23 ‘‘ ‘What are your obligations if you reaffirm the debt? 

24 A reaffirmed debt remains your personal legal obligation. 

25 It is not discharged in your bankruptcy case. That means 
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1 that if you default on your reaffirmed debt after your 

2 bankruptcy case is over, your creditor may be able to take 

3 your property or your wages. Otherwise, your obligations 

4 will be determined by the reaffirmation agreement which 

5 may have changed the terms of the original agreement. 

6 For example, if you are reaffirming an open end credit 

7 agreement, the creditor may be permitted by that agree8 ment or applicable law to change the terms of that agree9 ment in the future under certain conditions. 

10 ‘‘ ‘Are you required to enter into a reaffirmation 

11 agreement by any law? No, you are not required to reaf12 firm a debt by any law. Only agree to reaffirm a debt if 

13 it is in your best interest. Be sure you can afford the pay14 ments you agree to make. 

15 ‘‘ ‘What if your creditor has a security interest or 

16 lien? Your bankruptcy discharge does not eliminate any 

17 lien on your property. A ‘‘lien’’ is often referred to as a 

18 security interest, deed of trust, mortgage or security deed. 

19 Even if you do not reaffirm and your personal liability 

20 on the debt is discharged, because of the lien your creditor 

21 may still have the right to take the security property if 

22 you do not pay the debt or default on it. If the lien is 

23 on an item of personal property that is exempt under your 

24 State’s law or that the trustee has abandoned, you may 

25 be able to redeem the item rather than reaffirm the debt. 
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1 To redeem, you make a single payment to the creditor 

2 equal to the current value of the security property, as 

3 agreed by the parties or determined by the court.’. 

4 ‘‘(ii) In the case of a reaffirmation under sub5 section (m)(2), numbered paragraph 6 in the disclo6 sures required by clause (i) of this subparagraph 

7 shall read as follows: 

8 ‘‘ ‘6. If you were represented by an attorney 

9 during the negotiation of your reaffirmation agree10 ment, your reaffirmation agreement becomes effec11 tive upon filing with the court.’. 

12 ‘‘(4) The form of such agreement required under this 

13 paragraph shall consist of the following: 

14 ‘‘ ‘Part B: Reaffirmation Agreement. I (we) agree to 

15 reaffirm the debts arising under the credit agreement de16 scribed below. 

17 ‘‘ ‘Brief description of credit agreement: 

18 ‘‘ ‘Description of any changes to the credit agreement 

19 made as part of this reaffirmation agreement: 

20 ‘‘ ‘Signature: Date: 

21 ‘‘ ‘Borrower: 

22 ‘‘ ‘Co-borrower, if also reaffirming these debts: 

23 ‘‘ ‘Accepted by creditor: 

24 ‘‘ ‘Date of creditor acceptance:’. 

25 ‘‘(5) The declaration shall consist of the following: 
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1 ‘‘(A) The following certification: 

2 ‘‘ ‘Part C: Certification by Debtor’s Attorney (If 

3 Any). 

4 ‘‘ ‘I hereby certify that (1) this agreement represents 

5 a fully informed and voluntary agreement by the debtor; 

6 (2) this agreement does not impose an undue hardship on 

7 the debtor or any dependent of the debtor; and (3) I have 

8 fully advised the debtor of the legal effect and con9 sequences of this agreement and any default under this 

10 agreement. 

11 ‘‘ ‘Signature of Debtor’s Attorney: Date:’. 

12 ‘‘(B) If a presumption of undue hardship has 

13 been established with respect to such agreement, 

14 such certification shall state that in the opinion of 

15 the attorney, the debtor is able to make the pay16 ment. 

17 ‘‘(C) In the case of a reaffirmation agreement under 

18 subsection (m)(2), subparagraph (B) is not applicable. 

19 ‘‘(6)(A) The statement in support of such agreement, 

20 which the debtor shall sign and date prior to filing with 

21 the court, shall consist of the following: 

22 ‘‘ ‘Part D: Debtor’s Statement in Support of Reaffir23 mation Agreement. 

24 ‘‘ ‘1. I believe this reaffirmation agreement will not 

25 impose an undue hardship on my dependents or me. I can 
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1 afford to make the payments on the reaffirmed debt be2 cause my monthly income (take home pay plus any other 

3 income received) is $lll, and my actual current 

4 monthly expenses including monthly payments on post5 bankruptcy debt and other reaffirmation agreements total 

6 $lll, leaving $lll to make the required payments 

7 on this reaffirmed debt. I understand that if my income 

8 less my monthly expenses does not leave enough to make 

9 the payments, this reaffirmation agreement is presumed 

10 to be an undue hardship on me and must be reviewed by 

11 the court. However, this presumption may be overcome if 

12 I explain to the satisfaction of the court how I can afford 

13 to make the payments here: lll. 

14 ‘‘ ‘2. I received a copy of the Reaffirmation Disclosure 

15 Statement in Part A and a completed and signed reaffir16 mation agreement.’. 

17 ‘‘(B) Where the debtor is represented by an attorney 

18 and is reaffirming a debt owed to a creditor defined in 

19 section 19(b)(1)(A)(iv) of the Federal Reserve Act, the 

20 statement of support of the reaffirmation agreement, 

21 which the debtor shall sign and date prior to filing with 

22 the court, shall consist of the following: 

23 ‘‘ ‘I believe this reaffirmation agreement is in my fi24 nancial interest. I can afford to make the payments on 

25 the reaffirmed debt. I received a copy of the Reaffirmation 
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1 Disclosure Statement in Part A and a completed and 

2 signed reaffirmation agreement.’. 

3 ‘‘(7) The motion that may be used if approval of such 

4 agreement by the court is required in order for it to be 

5 effective, shall be signed and dated by the movant and 

6 shall consist of the following: 

7 ‘‘ ‘Part E: Motion for Court Approval (To be com8 pleted only if the debtor is not represented by an attor9 ney.). I (we), the debtor(s), affirm the following to be true 

10 and correct: 

11 ‘‘ ‘I am not represented by an attorney in connection 

12 with this reaffirmation agreement. 

13 ‘‘ ‘I believe this reaffirmation agreement is in my best 

14 interest based on the income and expenses I have disclosed 

15 in my Statement in Support of this reaffirmation agree16 ment, and because (provide any additional relevant rea17 sons the court should consider): 

18 ‘‘ ‘Therefore, I ask the court for an order approving 

19 this reaffirmation agreement.’. 

20 ‘‘(8) The court order, which may be used to approve 

21 such agreement, shall consist of the following: 

22 ‘‘ ‘Court Order: The court grants the debtor’s motion 

23 and approves the reaffirmation agreement described 

24 above.’. 
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1 ‘‘(l) Notwithstanding any other provision of this title 

2 the following shall apply: 

3 ‘‘(1) A creditor may accept payments from a 

4 debtor before and after the filing of an agreement of 

5 the kind specified in subsection (c) with the court. 

6 ‘‘(2) A creditor may accept payments from a 

7 debtor under such agreement that the creditor be8 lieves in good faith to be effective. 

9 ‘‘(3) The requirements of subsections (c)(2) and 

10 (k) shall be satisfied if disclosures required under 

11 those subsections are given in good faith. 

12 ‘‘(m)(1) Until 60 days after an agreement of the kind 

13 specified in subsection (c) is filed with the court (or such 

14 additional period as the court, after notice and a hearing 

15 and for cause, orders before the expiration of such period), 

16 it shall be presumed that such agreement is an undue 

17 hardship on the debtor if the debtor’s monthly income less 

18 the debtor’s monthly expenses as shown on the debtor’s 

19 completed and signed statement in support of such agree20 ment required under subsection (k)(6)(A) is less than the 

21 scheduled payments on the reaffirmed debt. This pre22 sumption shall be reviewed by the court. The presumption 

23 may be rebutted in writing by the debtor if the statement 

24 includes an explanation that identifies additional sources 

25 of funds to make the payments as agreed upon under the 
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1 terms of such agreement. If the presumption is not rebut2 ted to the satisfaction of the court, the court may dis3 approve such agreement. No agreement shall be dis4 approved without notice and a hearing to the debtor and 

5 creditor, and such hearing shall be concluded before the 

6 entry of the debtor’s discharge. 

7 ‘‘(2) This subsection does not apply to reaffirmation 

8 agreements where the creditor is a credit union, as defined 

9 in section 19(b)(1)(A)(iv) of the Federal Reserve Act.’’. 

10 (b) LAW ENFORCEMENT.— 

11 (1) IN GENERAL.—Chapter 9 of title 18, United 

12 States Code, is amended by adding at the end the 

13 following: 

14 ‘‘§ 158. Designation of United States attorneys and 

15 agents of the Federal Bureau of Inves16 tigation to address abusive reaffirma17 tions of debt and materially fraudulent 

18 statements in bankruptcy schedules 

19 ‘‘(a) IN GENERAL.—The Attorney General of the 

20 United States shall designate the individuals described in 

21 subsection (b) to have primary responsibility in carrying 

22 out enforcement activities in addressing violations of sec23 tion 152 or 157 relating to abusive reaffirmations of debt. 

24 In addition to addressing the violations referred to in the 

25 preceding sentence, the individuals described under sub-
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1 section (b) shall address violations of section 152 or 157 

2 relating to materially fraudulent statements in bankruptcy 

3 schedules that are intentionally false or intentionally mis4 leading. 

5 ‘‘(b) UNITED STATES ATTORNEYS AND AGENTS OF

6 THE FEDERAL BUREAU OF INVESTIGATION.—The indi7 viduals referred to in subsection (a) are— 

8 ‘‘(1) the United States attorney for each judi9 cial district of the United States; and 

10 ‘‘(2) an agent of the Federal Bureau of Inves11 tigation for each field office of the Federal Bureau 

12 of Investigation. 

13 ‘‘(c) BANKRUPTCY INVESTIGATIONS.—Each United 

14 States attorney designated under this section shall, in ad15 dition to any other responsibilities, have primary responsi16 bility for carrying out the duties of a United States attor17 ney under section 3057. 

18 ‘‘(d) BANKRUPTCY PROCEDURES.—The bankruptcy 

19 courts shall establish procedures for referring any case 

20 that may contain a materially fraudulent statement in a 

21 bankruptcy schedule to the individuals designated under 

22 this section.’’. 

23 (2) CLERICAL AMENDMENT.—The table of sec24 tions for chapter 9 of title 18, United States Code, 

25 is amended by adding at the end the following: 
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‘‘158. Designation of United States attorneys and agents of the Federal Bureau 

of Investigation to address abusive reaffirmations of debt and 

materially fraudulent statements in bankruptcy schedules.’’. 

1 SEC. 204. PRESERVATION OF CLAIMS AND DEFENSES UPON 

2 SALE OF PREDATORY LOANS. 

3 Section 363 of title 11, United States Code, is 

4 amended— 

5 (1) by redesignating subsection (o) as sub6 section (p), and 

7 (2) by inserting after subsection (n) the fol8 lowing: 

9 ‘‘(o) Notwithstanding subsection (f), if a person pur10 chases any interest in a consumer credit transaction that 

11 is subject to the Truth in Lending Act or any interest in 

12 a consumer credit contract (as defined in section 433.1 

13 of title 16 of the Code of Federal Regulations (January 

14 1, 2004), as amended from time to time), and if such in15 terest is purchased through a sale under this section, then 

16 such person shall remain subject to all claims and defenses 

17 that are related to such consumer credit transaction or 

18 such consumer credit contract, to the same extent as such 

19 person would be subject to such claims and defenses of 

20 the consumer had such interest been purchased at a sale 

21 not under this section.’’. 
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1 SEC. 205. GAO STUDY AND REPORT ON REAFFIRMATION 

2 AGREEMENT PROCESS. 

3 (a) STUDY.—The Comptroller General of the United 

4 States shall conduct a study of the reaffirmation agree5 ment process that occurs under title 11 of the United 

6 States Code, to determine the overall treatment of con7 sumers within the context of such process, and shall in8 clude in such study consideration of— 

9 (1) the policies and activities of creditors with 

10 respect to reaffirmation agreements; and 

11 (2) whether consumers are fully, fairly, and 

12 consistently informed of their rights pursuant to 

13 such title. 

14 (b) REPORT TO THE CONGRESS.—Not later than 18 

15 months after the date of the enactment of this Act, the 

16 Comptroller General shall submit to the President pro 

17 tempore of the Senate and the Speaker of the House of 

18 Representatives a report on the results of the study con19 ducted under subsection (a), together with recommenda20 tions for legislation (if any) to address any abusive or co21 ercive tactics found in connection with the reaffirmation 

22 agreement process that occurs under title 11 of the United 

23 States Code. 
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1 Subtitle B—Priority Child Support 

2 SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGA3 TION. 

4 Section 101 of title 11, United States Code, is 

5 amended— 

6 (1) by striking paragraph (12A); and 

7 (2) by inserting after paragraph (14) the fol8 lowing: 

9 ‘‘(14A) ‘domestic support obligation’ means a 

10 debt that accrues before, on, or after the date of the 

11 order for relief in a case under this title, including 

12 interest that accrues on that debt as provided under 

13 applicable nonbankruptcy law notwithstanding any 

14 other provision of this title, that is— 

15 ‘‘(A) owed to or recoverable by— 

16 ‘‘(i) a spouse, former spouse, or child 

17 of the debtor or such child’s parent, legal 

18 guardian, or responsible relative; or 

19 ‘‘(ii) a governmental unit; 

20 ‘‘(B) in the nature of alimony, mainte21 nance, or support (including assistance provided 

22 by a governmental unit) of such spouse, former 

23 spouse, or child of the debtor or such child’s 

24 parent, without regard to whether such debt is 

25 expressly so designated; 
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1 ‘‘(C) established or subject to establish2 ment before, on, or after the date of the order 

3 for relief in a case under this title, by reason 

4 of applicable provisions of— 

5 ‘‘(i) a separation agreement, divorce 

6 decree, or property settlement agreement; 

7 ‘‘(ii) an order of a court of record; or 

8 ‘‘(iii) a determination made in accord9 ance with applicable nonbankruptcy law by 

10 a governmental unit; and 

11 ‘‘(D) not assigned to a nongovernmental 

12 entity, unless that obligation is assigned volun13 tarily by the spouse, former spouse, child of the 

14 debtor, or such child’s parent, legal guardian, 

15 or responsible relative for the purpose of col16 lecting the debt;’’. 

17 SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP18 PORT OBLIGATIONS. 

19 Section 507(a) of title 11, United States Code, is 

20 amended— 

21 (1) by striking paragraph (7); 

22 (2) by redesignating paragraphs (1) through 

23 (6) as paragraphs (2) through (7), respectively; 

24 (3) in paragraph (2), as so redesignated, by 

25 striking ‘‘First’’ and inserting ‘‘Second’’; 
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1 (4) in paragraph (3), as so redesignated, by 

2 striking ‘‘Second’’ and inserting ‘‘Third’’; 

3 (5) in paragraph (4), as so redesignated— 

4 (A) by striking ‘‘Third’’ and inserting 

5 ‘‘Fourth’’; and 

6 (B) by striking the semicolon at the end 

7 and inserting a period; 

8 (6) in paragraph (5), as so redesignated, by 

9 striking ‘‘Fourth’’ and inserting ‘‘Fifth’’; 

10 (7) in paragraph (6), as so redesignated, by 

11 striking ‘‘Fifth’’ and inserting ‘‘Sixth’’; 

12 (8) in paragraph (7), as so redesignated, by 

13 striking ‘‘Sixth’’ and inserting ‘‘Seventh’’; and 

14 (9) by inserting before paragraph (2), as so re15 designated, the following: 

16 ‘‘(1) First: 

17 ‘‘(A) Allowed unsecured claims for domes18 tic support obligations that, as of the date of 

19 the filing of the petition in a case under this 

20 title, are owed to or recoverable by a spouse, 

21 former spouse, or child of the debtor, or such 

22 child’s parent, legal guardian, or responsible 

23 relative, without regard to whether the claim is 

24 filed by such person or is filed by a govern25 mental unit on behalf of such person, on the 
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1 condition that funds received under this para2 graph by a governmental unit under this title 

3 after the date of the filing of the petition shall 

4 be applied and distributed in accordance with 

5 applicable nonbankruptcy law. 

6 ‘‘(B) Subject to claims under subpara7 graph (A), allowed unsecured claims for domes8 tic support obligations that, as of the date of 

9 the filing of the petition, are assigned by a 

10 spouse, former spouse, child of the debtor, or 

11 such child’s parent, legal guardian, or respon12 sible relative to a governmental unit (unless 

13 such obligation is assigned voluntarily by the 

14 spouse, former spouse, child, parent, legal 

15 guardian, or responsible relative of the child for 

16 the purpose of collecting the debt) or are owed 

17 directly to or recoverable by a governmental 

18 unit under applicable nonbankruptcy law, on 

19 the condition that funds received under this 

20 paragraph by a governmental unit under this 

21 title after the date of the filing of the petition 

22 be applied and distributed in accordance with 

23 applicable nonbankruptcy law. 

24 ‘‘(C) If a trustee is appointed or elected 

25 under section 701, 702, 703, 1104, 1202, or 
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1 1302, the administrative expenses of the trustee 

2 allowed under paragraphs (1)(A), (2), and (6) 

3 of section 503(b) shall be paid before payment 

4 of claims under subparagraphs (A) and (B), to 

5 the extent that the trustee administers assets 

6 that are otherwise available for the payment of 

7 such claims.’’. 

8 SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND 

9 DISCHARGE IN CASES INVOLVING DOMESTIC 

10 SUPPORT OBLIGATIONS. 

11 Title 11, United States Code, is amended— 

12 (1) in section 1129(a), by adding at the end the 

13 following: 

14 ‘‘(14) If the debtor is required by a judicial or 

15 administrative order, or by statute, to pay a domes16 tic support obligation, the debtor has paid all 

17 amounts payable under such order or such statute 

18 for such obligation that first become payable after 

19 the date of the filing of the petition.’’; 

20 (2) in section 1208(c)— 

21 (A) in paragraph (8), by striking ‘‘or’’ at 

22 the end; 

23 (B) in paragraph (9), by striking the pe24 riod at the end and inserting ‘‘; and’’; and 

25 (C) by adding at the end the following: 
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1 ‘‘(10) failure of the debtor to pay any domestic 

2 support obligation that first becomes payable after 

3 the date of the filing of the petition.’’; 

4 (3) in section 1222(a)— 

5 (A) in paragraph (2), by striking ‘‘and’’ at 

6 the end; 

7 (B) in paragraph (3), by striking the pe8 riod at the end and inserting ‘‘; and’’; and 

9 (C) by adding at the end the following: 

10 ‘‘(4) notwithstanding any other provision of this 

11 section, a plan may provide for less than full pay12 ment of all amounts owed for a claim entitled to pri13 ority under section 507(a)(1)(B) only if the plan 

14 provides that all of the debtor’s projected disposable 

15 income for a 5-year period beginning on the date 

16 that the first payment is due under the plan will be 

17 applied to make payments under the plan.’’; 

18 (4) in section 1222(b)— 

19 (A) in paragraph (10), by striking ‘‘and’’ 

20 at the end; 

21 (B) by redesignating paragraph (11) as 

22 paragraph (12); and 

23 (C) by inserting after paragraph (10) the 

24 following: 
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1 ‘‘(11) provide for the payment of interest accru2 ing after the date of the filing of the petition on un3 secured claims that are nondischargeable under sec4 tion 1228(a), except that such interest may be paid 

5 only to the extent that the debtor has disposable in6 come available to pay such interest after making 

7 provision for full payment of all allowed claims; 

8 and’’; 

9 (5) in section 1225(a)— 

10 (A) in paragraph (5), by striking ‘‘and’’ at 

11 the end; 

12 (B) in paragraph (6), by striking the pe13 riod at the end and inserting ‘‘; and’’; and 

14 (C) by adding at the end the following: 

15 ‘‘(7) the debtor has paid all amounts that are 

16 required to be paid under a domestic support obliga17 tion and that first become payable after the date of 

18 the filing of the petition if the debtor is required by 

19 a judicial or administrative order, or by statute, to 

20 pay such domestic support obligation.’’; 

21 (6) in section 1228(a), in the matter preceding 

22 paragraph (1), by inserting ‘‘, and in the case of a 

23 debtor who is required by a judicial or administra24 tive order, or by statute, to pay a domestic support 

25 obligation, after such debtor certifies that all 
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1 amounts payable under such order or such statute 

2 that are due on or before the date of the certifi3 cation (including amounts due before the petition 

4 was filed, but only to the extent provided for by the 

5 plan) have been paid’’ after ‘‘completion by the debt6 or of all payments under the plan’’; 

7 (7) in section 1307(c)— 

8 (A) in paragraph (9), by striking ‘‘or’’ at 

9 the end; 

10 (B) in paragraph (10), by striking the pe11 riod at the end and inserting ‘‘; or’’; and 

12 (C) by adding at the end the following: 

13 ‘‘(11) failure of the debtor to pay any domestic 

14 support obligation that first becomes payable after 

15 the date of the filing of the petition.’’; 

16 (8) in section 1322(a)— 

17 (A) in paragraph (2), by striking ‘‘and’’ at 

18 the end; 

19 (B) in paragraph (3), by striking the pe20 riod at the end and inserting ‘‘; and’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(4) notwithstanding any other provision of this 

23 section, a plan may provide for less than full pay24 ment of all amounts owed for a claim entitled to pri25 ority under section 507(a)(1)(B) only if the plan 
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1 provides that all of the debtor’s projected disposable 

2 income for a 5-year period beginning on the date 

3 that the first payment is due under the plan will be 

4 applied to make payments under the plan.’’; 

5 (9) in section 1322(b)— 

6 (A) in paragraph (9), by striking ‘‘; and’’ 

7 and inserting a semicolon; 

8 (B) by redesignating paragraph (10) as 

9 paragraph (11); and 

10 (C) inserting after paragraph (9) the fol11 lowing: 

12 ‘‘(10) provide for the payment of interest accru13 ing after the date of the filing of the petition on un14 secured claims that are nondischargeable under sec15 tion 1328(a), except that such interest may be paid 

16 only to the extent that the debtor has disposable in17 come available to pay such interest after making 

18 provision for full payment of all allowed claims; 

19 and’’; 

20 (10) in section 1325(a), as amended by section 

21 102, by inserting after paragraph (7) the following: 

22 ‘‘(8) the debtor has paid all amounts that are 

23 required to be paid under a domestic support obliga24 tion and that first become payable after the date of 

25 the filing of the petition if the debtor is required by 
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1 a judicial or administrative order, or by statute, to 

2 pay such domestic support obligation; and’’; 

3 (11) in section 1328(a), in the matter preceding 

4 paragraph (1), by inserting ‘‘, and in the case of a 

5 debtor who is required by a judicial or administra6 tive order, or by statute, to pay a domestic support 

7 obligation, after such debtor certifies that all 

8 amounts payable under such order or such statute 

9 that are due on or before the date of the certifi10 cation (including amounts due before the petition 

11 was filed, but only to the extent provided for by the 

12 plan) have been paid’’ after ‘‘completion by the debt13 or of all payments under the plan’’. 

14 SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC 

15 SUPPORT OBLIGATION PROCEEDINGS. 

16 Section 362(b) of title 11, United States Code, is 

17 amended by striking paragraph (2) and inserting the fol18 lowing: 

19 ‘‘(2) under subsection (a)— 

20 ‘‘(A) of the commencement or continuation 

21 of a civil action or proceeding— 

22 ‘‘(i) for the establishment of paternity; 

23 ‘‘(ii) for the establishment or modi24 fication of an order for domestic support 

25 obligations; 
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1 ‘‘(iii) concerning child custody or visi2 tation; 

3 ‘‘(iv) for the dissolution of a marriage, 

4 except to the extent that such proceeding 

5 seeks to determine the division of property 

6 that is property of the estate; or 

7 ‘‘(v) regarding domestic violence; 

8 ‘‘(B) of the collection of a domestic sup9 port obligation from property that is not prop10 erty of the estate; 

11 ‘‘(C) with respect to the withholding of in12 come that is property of the estate or property 

13 of the debtor for payment of a domestic support 

14 obligation under a judicial or administrative 

15 order or a statute; 

16 ‘‘(D) of the withholding, suspension, or re17 striction of a driver’s license, a professional or 

18 occupational license, or a recreational license, 

19 under State law, as specified in section 

20 466(a)(16) of the Social Security Act; 

21 ‘‘(E) of the reporting of overdue support 

22 owed by a parent to any consumer reporting 

23 agency as specified in section 466(a)(7) of the 

24 Social Security Act; 
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1 ‘‘(F) of the interception of a tax refund, as 

2 specified in sections 464 and 466(a)(3) of the 

3 Social Security Act or under an analogous State 

4 law; or 

5 ‘‘(G) of the enforcement of a medical obli6 gation, as specified under title IV of the Social 

7 Security Act;’’. 

8 SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR 

9 ALIMONY, MAINTENANCE, AND SUPPORT. 

10 Section 523 of title 11, United States Code, is 

11 amended— 

12 (1) in subsection (a)— 

13 (A) by striking paragraph (5) and insert14 ing the following: 

15 ‘‘(5) for a domestic support obligation;’’; and 

16 (B) by striking paragraph (18); 

17 (2) in subsection (c), by striking ‘‘(6), or (15)’’ 

18 each place it appears and inserting ‘‘or (6)’’; and 

19 (3) in paragraph (15), as added by Public Law 

20 103–394 (108 Stat. 4133)— 

21 (A) by inserting ‘‘to a spouse, former 

22 spouse, or child of the debtor and’’ before ‘‘not 

23 of the kind’’; 

24 (B) by inserting ‘‘or’’ after ‘‘court of 

25 record,’’; and 
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1 (C) by striking ‘‘unless—’’ and all that fol2 lows through the end of the paragraph and in3 serting a semicolon. 

4 SEC. 216. CONTINUED LIABILITY OF PROPERTY. 

5 Section 522 of title 11, United States Code, is 

6 amended— 

7 (1) in subsection (c), by striking paragraph (1) 

8 and inserting the following: 

9 ‘‘(1) a debt of a kind specified in paragraph (1) 

10 or (5) of section 523(a) (in which case, notwith11 standing any provision of applicable nonbankruptcy 

12 law to the contrary, such property shall be liable for 

13 a debt of a kind specified in section 523(a)(5));’’; 

14 (2) in subsection (f)(1)(A), by striking the dash 

15 and all that follows through the end of the subpara16 graph and inserting ‘‘of a kind that is specified in 

17 section 523(a)(5); or’’; and 

18 (3) in subsection (g)(2), by striking ‘‘subsection 

19 (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’. 

20 SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS 

21 AGAINST PREFERENTIAL TRANSFER MO22 TIONS. 

23 Section 547(c)(7) of title 11, United States Code, is 

24 amended to read as follows: 
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1 ‘‘(7) to the extent such transfer was a bona fide 

2 payment of a debt for a domestic support obliga3 tion;’’. 

4 SEC. 218. DISPOSABLE INCOME DEFINED. 

5 Section 1225(b)(2)(A) of title 11, United States 

6 Code, is amended by inserting ‘‘or for a domestic support 

7 obligation that first becomes payable after the date of the 

8 filing of the petition’’ after ‘‘dependent of the debtor’’. 

9 SEC. 219. COLLECTION OF CHILD SUPPORT. 

10 (a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec11 tion 704 of title 11, United States Code, as amended by 

12 section 102, is amended— 

13 (1) in subsection (a)— 

14 (A) in paragraph (8), by striking ‘‘and’’ at 

15 the end; 

16 (B) in paragraph (9), by striking the pe17 riod and inserting a semicolon; and 

18 (C) by adding at the end the following: 

19 ‘‘(10) if with respect to the debtor there is a 

20 claim for a domestic support obligation, provide the 

21 applicable notice specified in subsection (c); and’’; 

22 and 

23 (2) by adding at the end the following: 

24 ‘‘(c)(1) In a case described in subsection (a)(10) to 

25 which subsection (a)(10) applies, the trustee shall— 
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1 ‘‘(A)(i) provide written notice to the holder of 

2 the claim described in subsection (a)(10) of such 

3 claim and of the right of such holder to use the serv4 ices of the State child support enforcement agency 

5 established under sections 464 and 466 of the Social 

6 Security Act for the State in which such holder re7 sides, for assistance in collecting child support dur8 ing and after the case under this title; 

9 ‘‘(ii) include in the notice provided under clause 

10 (i) the address and telephone number of such State 

11 child support enforcement agency; and 

12 ‘‘(iii) include in the notice provided under 

13 clause (i) an explanation of the rights of such holder 

14 to payment of such claim under this chapter; 

15 ‘‘(B)(i) provide written notice to such State 

16 child support enforcement agency of such claim; and 

17 ‘‘(ii) include in the notice provided under clause 

18 (i) the name, address, and telephone number of such 

19 holder; and 

20 ‘‘(C) at such time as the debtor is granted a 

21 discharge under section 727, provide written notice 

22 to such holder and to such State child support en23 forcement agency of— 

24 ‘‘(i) the granting of the discharge; 
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1 ‘‘(ii) the last recent known address of the 

2 debtor; 

3 ‘‘(iii) the last recent known name and ad4 dress of the debtor’s employer; and 

5 ‘‘(iv) the name of each creditor that holds 

6 a claim that— 

7 ‘‘(I) is not discharged under para8 graph (2), (4), or (14A) of section 523(a); 

9 or 

10 ‘‘(II) was reaffirmed by the debtor 

11 under section 524(c). 

12 ‘‘(2)(A) The holder of a claim described in subsection 

13 (a)(10) or the State child support enforcement agency of 

14 the State in which such holder resides may request from 

15 a creditor described in paragraph (1)(C)(iv) the last 

16 known address of the debtor. 

17 ‘‘(B) Notwithstanding any other provision of law, a 

18 creditor that makes a disclosure of a last known address 

19 of a debtor in connection with a request made under sub20 paragraph (A) shall not be liable by reason of making such 

21 disclosure.’’. 

22 (b) DUTIES OF TRUSTEE UNDER CHAPTER 11.— 

23 Section 1106 of title 11, United States Code, is amend24 ed— 

25 (1) in subsection (a)— 
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1 (A) in paragraph (6), by striking ‘‘and’’ at 

2 the end; 

3 (B) in paragraph (7), by striking the pe4 riod and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(8) if with respect to the debtor there is a 

7 claim for a domestic support obligation, provide the 

8 applicable notice specified in subsection (c).’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(c)(1) In a case described in subsection (a)(8) to 

11 which subsection (a)(8) applies, the trustee shall— 

12 ‘‘(A)(i) provide written notice to the holder of 

13 the claim described in subsection (a)(8) of such 

14 claim and of the right of such holder to use the serv15 ices of the State child support enforcement agency 

16 established under sections 464 and 466 of the Social 

17 Security Act for the State in which such holder re18 sides, for assistance in collecting child support dur19 ing and after the case under this title; and 

20 ‘‘(ii) include in the notice required by clause (i) 

21 the address and telephone number of such State 

22 child support enforcement agency; 

23 ‘‘(B)(i) provide written notice to such State 

24 child support enforcement agency of such claim; and 
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1 ‘‘(ii) include in the notice required by clause (i) 

2 the name, address, and telephone number of such 

3 holder; and 

4 ‘‘(C) at such time as the debtor is granted a 

5 discharge under section 1141, provide written notice 

6 to such holder and to such State child support en7 forcement agency of— 

8 ‘‘(i) the granting of the discharge; 

9 ‘‘(ii) the last recent known address of the 

10 debtor; 

11 ‘‘(iii) the last recent known name and ad12 dress of the debtor’s employer; and 

13 ‘‘(iv) the name of each creditor that holds 

14 a claim that— 

15 ‘‘(I) is not discharged under para16 graph (2), (4), or (14A) of section 523(a); 

17 or 

18 ‘‘(II) was reaffirmed by the debtor 

19 under section 524(c). 

20 ‘‘(2)(A) The holder of a claim described in subsection 

21 (a)(8) or the State child enforcement support agency of 

22 the State in which such holder resides may request from 

23 a creditor described in paragraph (1)(C)(iv) the last 

24 known address of the debtor. 
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1 ‘‘(B) Notwithstanding any other provision of law, a 

2 creditor that makes a disclosure of a last known address 

3 of a debtor in connection with a request made under sub4 paragraph (A) shall not be liable by reason of making such 

5 disclosure.’’. 

6 (c) DUTIES OF TRUSTEE UNDER CHAPTER 12.— 

7 Section 1202 of title 11, United States Code, is amend8 ed— 

9 (1) in subsection (b)— 

10 (A) in paragraph (4), by striking ‘‘and’’ at 

11 the end; 

12 (B) in paragraph (5), by striking the pe13 riod and inserting ‘‘; and’’; and 

14 (C) by adding at the end the following: 

15 ‘‘(6) if with respect to the debtor there is a 

16 claim for a domestic support obligation, provide the 

17 applicable notice specified in subsection (c).’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(c)(1) In a case described in subsection (b)(6) to 

20 which subsection (b)(6) applies, the trustee shall— 

21 ‘‘(A)(i) provide written notice to the holder of 

22 the claim described in subsection (b)(6) of such 

23 claim and of the right of such holder to use the serv24 ices of the State child support enforcement agency 

25 established under sections 464 and 466 of the Social 
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1 Security Act for the State in which such holder re2 sides, for assistance in collecting child support dur3 ing and after the case under this title; and 

4 ‘‘(ii) include in the notice provided under clause 

5 (i) the address and telephone number of such State 

6 child support enforcement agency; 

7 ‘‘(B)(i) provide written notice to such State 

8 child support enforcement agency of such claim; and 

9 ‘‘(ii) include in the notice provided under clause 

10 (i) the name, address, and telephone number of such 

11 holder; and 

12 ‘‘(C) at such time as the debtor is granted a 

13 discharge under section 1228, provide written notice 

14 to such holder and to such State child support en15 forcement agency of— 

16 ‘‘(i) the granting of the discharge; 

17 ‘‘(ii) the last recent known address of the 

18 debtor; 

19 ‘‘(iii) the last recent known name and ad20 dress of the debtor’s employer; and 

21 ‘‘(iv) the name of each creditor that holds 

22 a claim that— 

23 ‘‘(I) is not discharged under para24 graph (2), (4), or (14A) of section 523(a); 

25 or 
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1 ‘‘(II) was reaffirmed by the debtor 

2 under section 524(c). 

3 ‘‘(2)(A) The holder of a claim described in subsection 

4 (b)(6) or the State child support enforcement agency of 

5 the State in which such holder resides may request from 

6 a creditor described in paragraph (1)(C)(iv) the last 

7 known address of the debtor. 

8 ‘‘(B) Notwithstanding any other provision of law, a 

9 creditor that makes a disclosure of a last known address 

10 of a debtor in connection with a request made under sub11 paragraph (A) shall not be liable by reason of making that 

12 disclosure.’’. 

13 (d) DUTIES OF TRUSTEE UNDER CHAPTER 13.— 

14 Section 1302 of title 11, United States Code, is amend15 ed— 

16 (1) in subsection (b)— 

17 (A) in paragraph (4), by striking ‘‘and’’ at 

18 the end; 

19 (B) in paragraph (5), by striking the pe20 riod and inserting ‘‘; and’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(6) if with respect to the debtor there is a 

23 claim for a domestic support obligation, provide the 

24 applicable notice specified in subsection (d).’’; and 

25 (2) by adding at the end the following: 
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1 ‘‘(d)(1) In a case described in subsection (b)(6) to 

2 which subsection (b)(6) applies, the trustee shall— 

3 ‘‘(A)(i) provide written notice to the holder of 

4 the claim described in subsection (b)(6) of such 

5 claim and of the right of such holder to use the serv6 ices of the State child support enforcement agency 

7 established under sections 464 and 466 of the Social 

8 Security Act for the State in which such holder re9 sides, for assistance in collecting child support dur10 ing and after the case under this title; and 

11 ‘‘(ii) include in the notice provided under clause 

12 (i) the address and telephone number of such State 

13 child support enforcement agency; 

14 ‘‘(B)(i) provide written notice to such State 

15 child support enforcement agency of such claim; and 

16 ‘‘(ii) include in the notice provided under clause 

17 (i) the name, address, and telephone number of such 

18 holder; and 

19 ‘‘(C) at such time as the debtor is granted a 

20 discharge under section 1328, provide written notice 

21 to such holder and to such State child support en22 forcement agency of— 

23 ‘‘(i) the granting of the discharge; 

24 ‘‘(ii) the last recent known address of the 

25 debtor; 
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1 ‘‘(iii) the last recent known name and ad2 dress of the debtor’s employer; and 

3 ‘‘(iv) the name of each creditor that holds 

4 a claim that— 

5 ‘‘(I) is not discharged under para6 graph (2) or (4) of section 523(a); or 

7 ‘‘(II) was reaffirmed by the debtor 

8 under section 524(c). 

9 ‘‘(2)(A) The holder of a claim described in subsection 

10 (b)(6) or the State child support enforcement agency of 

11 the State in which such holder resides may request from 

12 a creditor described in paragraph (1)(C)(iv) the last 

13 known address of the debtor. 

14 ‘‘(B) Notwithstanding any other provision of law, a 

15 creditor that makes a disclosure of a last known address 

16 of a debtor in connection with a request made under sub17 paragraph (A) shall not be liable by reason of making that 

18 disclosure.’’. 

19 SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDU20 CATIONAL BENEFITS AND LOANS. 

21 Section 523(a) of title 11, United States Code, is 

22 amended by striking paragraph (8) and inserting the fol23 lowing: 

24 ‘‘(8) unless excepting such debt from discharge 

25 under this paragraph would impose an undue hard-
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1 ship on the debtor and the debtor’s dependents, 

2 for— 

3 ‘‘(A)(i) an educational benefit overpayment 

4 or loan made, insured, or guaranteed by a gov5 ernmental unit, or made under any program 

6 funded in whole or in part by a governmental 

7 unit or nonprofit institution; or 

8 ‘‘(ii) an obligation to repay funds received 

9 as an educational benefit, scholarship, or sti10 pend; or 

11 ‘‘(B) any other educational loan that is a 

12 qualified education loan, as defined in section 

13 221(d)(1) of the Internal Revenue Code of 

14 1986, incurred by a debtor who is an indi15 vidual;’’. 

16 Subtitle C—Other Consumer 

17 Protections 

18 SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANK19 RUPTCY FILINGS. 

20 Section 110 of title 11, United States Code, is 

21 amended— 

22 (1) in subsection (a)(1), by striking ‘‘or an em23 ployee of an attorney’’ and inserting ‘‘for the debtor 

24 or an employee of such attorney under the direct su25 pervision of such attorney’’; 
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1 (2) in subsection (b)— 

2 (A) in paragraph (1), by adding at the end 

3 the following: ‘‘If a bankruptcy petition pre4 parer is not an individual, then an officer, prin5 cipal, responsible person, or partner of the 

6 bankruptcy petition preparer shall be required 

7 to— 

8 ‘‘(A) sign the document for filing; and 

9 ‘‘(B) print on the document the name and ad10 dress of that officer, principal, responsible person, or 

11 partner.’’; and 

12 (B) by striking paragraph (2) and insert13 ing the following: 

14 ‘‘(2)(A) Before preparing any document for filing or 

15 accepting any fees from a debtor, the bankruptcy petition 

16 preparer shall provide to the debtor a written notice which 

17 shall be on an official form prescribed by the Judicial Con18 ference of the United States in accordance with rule 9009 

19 of the Federal Rules of Bankruptcy Procedure. 

20 ‘‘(B) The notice under subparagraph (A)— 

21 ‘‘(i) shall inform the debtor in simple language 

22 that a bankruptcy petition preparer is not an attor23 ney and may not practice law or give legal advice; 

24 ‘‘(ii) may contain a description of examples of 

25 legal advice that a bankruptcy petition preparer is 
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1 not authorized to give, in addition to any advice that 

2 the preparer may not give by reason of subsection 

3 (e)(2); and 

4 ‘‘(iii) shall— 

5 ‘‘(I) be signed by the debtor and, under 

6 penalty of perjury, by the bankruptcy petition 

7 preparer; and 

8 ‘‘(II) be filed with any document for fil9 ing.’’; 

10 (3) in subsection (c)— 

11 (A) in paragraph (2)— 

12 (i) by striking ‘‘(2) For purposes’’ and 

13 inserting ‘‘(2)(A) Subject to subparagraph 

14 (B), for purposes’’; and 

15 (ii) by adding at the end the fol16 lowing: 

17 ‘‘(B) If a bankruptcy petition preparer is not an indi18 vidual, the identifying number of the bankruptcy petition 

19 preparer shall be the Social Security account number of 

20 the officer, principal, responsible person, or partner of the 

21 bankruptcy petition preparer.’’; and 

22 (B) by striking paragraph (3); 

23 (4) in subsection (d)— 

24 (A) by striking ‘‘(d)(1)’’ and inserting 

25 ‘‘(d)’’; and 
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1 (B) by striking paragraph (2); 

2 (5) in subsection (e)— 

3 (A) by striking paragraph (2); and 

4 (B) by adding at the end the following: 

5 ‘‘(2)(A) A bankruptcy petition preparer may not offer 

6 a potential bankruptcy debtor any legal advice, including 

7 any legal advice described in subparagraph (B). 

8 ‘‘(B) The legal advice referred to in subparagraph 

9 (A) includes advising the debtor— 

10 ‘‘(i) whether— 

11 ‘‘(I) to file a petition under this title; or 

12 ‘‘(II) commencing a case under chapter 7, 

13 11, 12, or 13 is appropriate; 

14 ‘‘(ii) whether the debtor’s debts will be dis15 charged in a case under this title; 

16 ‘‘(iii) whether the debtor will be able to retain 

17 the debtor’s home, car, or other property after com18 mencing a case under this title; 

19 ‘‘(iv) concerning— 

20 ‘‘(I) the tax consequences of a case 

21 brought under this title; or 

22 ‘‘(II) the dischargeability of tax claims; 

23 ‘‘(v) whether the debtor may or should promise 

24 to repay debts to a creditor or enter into a reaffir25 mation agreement with a creditor to reaffirm a debt; 
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1 ‘‘(vi) concerning how to characterize the nature 

2 of the debtor’s interests in property or the debtor’s 

3 debts; or 

4 ‘‘(vii) concerning bankruptcy procedures and 

5 rights.’’; 

6 (6) in subsection (f)— 

7 (A) by striking ‘‘(f)(1)’’ and inserting 

8 ‘‘(f)’’; and 

9 (B) by striking paragraph (2); 

10 (7) in subsection (g)— 

11 (A) by striking ‘‘(g)(1)’’ and inserting 

12 ‘‘(g)’’; and 

13 (B) by striking paragraph (2); 

14 (8) in subsection (h)— 

15 (A) by redesignating paragraphs (1) 

16 through (4) as paragraphs (2) through (5), re17 spectively; 

18 (B) by inserting before paragraph (2), as 

19 so redesignated, the following: 

20 ‘‘(1) The Supreme Court may promulgate rules under 

21 section 2075 of title 28, or the Judicial Conference of the 

22 United States may prescribe guidelines, for setting a max23 imum allowable fee chargeable by a bankruptcy petition 

24 preparer. A bankruptcy petition preparer shall notify the 

25 debtor of any such maximum amount before preparing any 
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1 document for filing for a debtor or accepting any fee from 

2 the debtor.’’; 

3 (C) in paragraph (2), as so redesignated— 

4 (i) by striking ‘‘Within 10 days after 

5 the date of the filing of a petition, a bank6 ruptcy petition preparer shall file a’’ and 

7 inserting ‘‘A’’; 

8 (ii) by inserting ‘‘by the bankruptcy 

9 petition preparer shall be filed together 

10 with the petition,’’ after ‘‘perjury’’; and 

11 (iii) by adding at the end the fol12 lowing: ‘‘If rules or guidelines setting a 

13 maximum fee for services have been pro14 mulgated or prescribed under paragraph 

15 (1), the declaration under this paragraph 

16 shall include a certification that the bank17 ruptcy petition preparer complied with the 

18 notification requirement under paragraph 

19 (1).’’; 

20 (D) by striking paragraph (3), as so redes21 ignated, and inserting the following: 

22 ‘‘(3)(A) The court shall disallow and order the imme23 diate turnover to the bankruptcy trustee any fee referred 

24 to in paragraph (2) found to be in excess of the value 

25 of any services— 
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1 ‘‘(i) rendered by the bankruptcy petition pre2 parer during the 12-month period immediately pre3 ceding the date of the filing of the petition; or 

4 ‘‘(ii) found to be in violation of any rule or 

5 guideline promulgated or prescribed under para6 graph (1). 

7 ‘‘(B) All fees charged by a bankruptcy petition pre8 parer may be forfeited in any case in which the bankruptcy 

9 petition preparer fails to comply with this subsection or 

10 subsection (b), (c), (d), (e), (f), or (g). 

11 ‘‘(C) An individual may exempt any funds recovered 

12 under this paragraph under section 522(b).’’; and 

13 (E) in paragraph (4), as so redesignated, 

14 by striking ‘‘or the United States trustee’’ and 

15 inserting ‘‘the United States trustee (or the 

16 bankruptcy administrator, if any) or the court, 

17 on the initiative of the court,’’; 

18 (9) in subsection (i)(1), by striking the matter 

19 preceding subparagraph (A) and inserting the fol20 lowing: 

21 ‘‘(i)(1) If a bankruptcy petition preparer violates this 

22 section or commits any act that the court finds to be 

23 fraudulent, unfair, or deceptive, on the motion of the debt24 or, trustee, United States trustee (or the bankruptcy ad25 ministrator, if any), and after notice and a hearing, the 
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1 court shall order the bankruptcy petition preparer to pay 

2 to the debtor—’’; 

3 (10) in subsection (j)— 

4 (A) in paragraph (2)— 

5 (i) in subparagraph (A)(i)(I), by strik6 ing ‘‘a violation of which subjects a person 

7 to criminal penalty’’; 

8 (ii) in subparagraph (B)— 

9 (I) by striking ‘‘or has not paid 

10 a penalty’’ and inserting ‘‘has not 

11 paid a penalty’’; and 

12 (II) by inserting ‘‘or failed to dis13 gorge all fees ordered by the court’’ 

14 after ‘‘a penalty imposed under this 

15 section,’’; 

16 (B) by redesignating paragraph (3) as 

17 paragraph (4); and 

18 (C) by inserting after paragraph (2) the 

19 following: 

20 ‘‘(3) The court, as part of its contempt power, may 

21 enjoin a bankruptcy petition preparer that has failed to 

22 comply with a previous order issued under this section. 

23 The injunction under this paragraph may be issued on the 

24 motion of the court, the trustee, or the United States 

25 trustee (or the bankruptcy administrator, if any).’’; and 
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1 (11) by adding at the end the following: 

2 ‘‘(l)(1) A bankruptcy petition preparer who fails to 

3 comply with any provision of subsection (b), (c), (d), (e), 

4 (f), (g), or (h) may be fined not more than $500 for each 

5 such failure. 

6 ‘‘(2) The court shall triple the amount of a fine as7 sessed under paragraph (1) in any case in which the court 

8 finds that a bankruptcy petition preparer— 

9 ‘‘(A) advised the debtor to exclude assets or in10 come that should have been included on applicable 

11 schedules; 

12 ‘‘(B) advised the debtor to use a false Social 

13 Security account number; 

14 ‘‘(C) failed to inform the debtor that the debtor 

15 was filing for relief under this title; or 

16 ‘‘(D) prepared a document for filing in a man17 ner that failed to disclose the identity of the bank18 ruptcy petition preparer. 

19 ‘‘(3) A debtor, trustee, creditor, or United States 

20 trustee (or the bankruptcy administrator, if any) may file 

21 a motion for an order imposing a fine on the bankruptcy 

22 petition preparer for any violation of this section. 

23 ‘‘(4)(A) Fines imposed under this subsection in judi24 cial districts served by United States trustees shall be paid 

25 to the United States trustee, who shall deposit an amount 
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1 equal to such fines in a special account of the United 

2 States Trustee System Fund referred to in section 

3 586(e)(2) of title 28. Amounts deposited under this sub4 paragraph shall be available to fund the enforcement of 

5 this section on a national basis. 

6 ‘‘(B) Fines imposed under this subsection in judicial 

7 districts served by bankruptcy administrators shall be de8 posited as offsetting receipts to the fund established under 

9 section 1931 of title 28, and shall remain available until 

10 expended to reimburse any appropriation for the amount 

11 paid out of such appropriation for expenses of the oper12 ation and maintenance of the courts of the United 

13 States.’’. 

14 SEC. 222. SENSE OF CONGRESS. 

15 It is the sense of Congress that States should develop 

16 curricula relating to the subject of personal finance, de17 signed for use in elementary and secondary schools. 

18 SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED 

19 STATES CODE. 

20 Section 507(a) of title 11, United States Code, as 

21 amended by section 212, is amended by inserting after 

22 paragraph (9) the following: 

23 ‘‘(10) Tenth, allowed claims for death or per24 sonal injury resulting from the operation of a motor 

25 vehicle or vessel if such operation was unlawful be-
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1 cause the debtor was intoxicated from using alcohol, 

2 a drug, or another substance.’’. 

3 SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANK4 RUPTCY. 

5 (a) IN GENERAL.—Section 522 of title 11, United 

6 States Code, is amended— 

7 (1) in subsection (b)— 

8 (A) in paragraph (2)— 

9 (i) in subparagraph (A), by striking 

10 ‘‘and’’ at the end; 

11 (ii) in subparagraph (B), by striking 

12 the period at the end and inserting ‘‘; 

13 and’’; 

14 (iii) by adding at the end the fol15 lowing: 

16 ‘‘(C) retirement funds to the extent that those 

17 funds are in a fund or account that is exempt from 

18 taxation under section 401, 403, 408, 408A, 414, 

19 457, or 501(a) of the Internal Revenue Code of 

20 1986.’’; and 

21 (iv) by striking ‘‘(2)(A) any property’’ 

22 and inserting: 

23 ‘‘(3) Property listed in this paragraph is— 

24 ‘‘(A) any property’’; 
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1 (B) by striking paragraph (1) and insert2 ing: 

3 ‘‘(2) Property listed in this paragraph is property 

4 that is specified under subsection (d), unless the State law 

5 that is applicable to the debtor under paragraph (3)(A) 

6 specifically does not so authorize.’’; 

7 (C) by striking ‘‘(b) Notwithstanding’’ and 

8 inserting ‘‘(b)(1) Notwithstanding’’; 

9 (D) by striking ‘‘paragraph (2)’’ each place 

10 it appears and inserting ‘‘paragraph (3)’’; 

11 (E) by striking ‘‘paragraph (1)’’ each place 

12 it appears and inserting ‘‘paragraph (2)’’; 

13 (F) by striking ‘‘Such property is—’’; and 

14 (G) by adding at the end the following: 

15 ‘‘(4) For purposes of paragraph (3)(C) and sub16 section (d)(12), the following shall apply: 

17 ‘‘(A) If the retirement funds are in a retirement 

18 fund that has received a favorable determination 

19 under section 7805 of the Internal Revenue Code of 

20 1986, and that determination is in effect as of the 

21 date of the filing of the petition in a case under this 

22 title, those funds shall be presumed to be exempt 

23 from the estate. 

24 ‘‘(B) If the retirement funds are in a retirement 

25 fund that has not received a favorable determination 
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1 under such section 7805, those funds are exempt 

2 from the estate if the debtor demonstrates that— 

3 ‘‘(i) no prior determination to the contrary 

4 has been made by a court or the Internal Rev5 enue Service; and 

6 ‘‘(ii)(I) the retirement fund is in substan7 tial compliance with the applicable requirements 

8 of the Internal Revenue Code of 1986; or 

9 ‘‘(II) the retirement fund fails to be in 

10 substantial compliance with the applicable re11 quirements of the Internal Revenue Code of 

12 1986 and the debtor is not materially respon13 sible for that failure. 

14 ‘‘(C) A direct transfer of retirement funds from 

15 1 fund or account that is exempt from taxation 

16 under section 401, 403, 408, 408A, 414, 457, or 

17 501(a) of the Internal Revenue Code of 1986, under 

18 section 401(a)(31) of the Internal Revenue Code of 

19 1986, or otherwise, shall not cease to qualify for ex20 emption under paragraph (3)(C) or subsection 

21 (d)(12) by reason of such direct transfer. 

22 ‘‘(D)(i) Any distribution that qualifies as an eli23 gible rollover distribution within the meaning of sec24 tion 402(c) of the Internal Revenue Code of 1986 or 

25 that is described in clause (ii) shall not cease to 
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1 qualify for exemption under paragraph (3)(C) or 

2 subsection (d)(12) by reason of such distribution. 

3 ‘‘(ii) A distribution described in this clause is 

4 an amount that— 

5 ‘‘(I) has been distributed from a fund or 

6 account that is exempt from taxation under sec7 tion 401, 403, 408, 408A, 414, 457, or 501(a) 

8 of the Internal Revenue Code of 1986; and 

9 ‘‘(II) to the extent allowed by law, is de10 posited in such a fund or account not later than 

11 60 days after the distribution of such amount.’’; 

12 and 

13 (2) in subsection (d)— 

14 (A) in the matter preceding paragraph (1), 

15 by striking ‘‘subsection (b)(1)’’ and inserting 

16 ‘‘subsection (b)(2)’’; and 

17 (B) by adding at the end the following: 

18 ‘‘(12) Retirement funds to the extent that those 

19 funds are in a fund or account that is exempt from 

20 taxation under section 401, 403, 408, 408A, 414, 

21 457, or 501(a) of the Internal Revenue Code of 

22 1986.’’. 

23 (b) AUTOMATIC STAY.—Section 362(b) of title 11, 

24 United States Code, is amended— 
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1 (1) in paragraph (17), by striking ‘‘or’’ at the 

2 end; 

3 (2) in paragraph (18), by striking the period 

4 and inserting a semicolon; and 

5 (3) by inserting after paragraph (18) the fol6 lowing: 

7 ‘‘(19) under subsection (a), of withholding of 

8 income from a debtor’s wages and collection of 

9 amounts withheld, under the debtor’s agreement au10 thorizing that withholding and collection for the ben11 efit of a pension, profit-sharing, stock bonus, or 

12 other plan established under section 401, 403, 408, 

13 408A, 414, 457, or 501(c) of the Internal Revenue 

14 Code of 1986, that is sponsored by the employer of 

15 the debtor, or an affiliate, successor, or predecessor 

16 of such employer— 

17 ‘‘(A) to the extent that the amounts with18 held and collected are used solely for payments 

19 relating to a loan from a plan under section 

20 408(b)(1) of the Employee Retirement Income 

21 Security Act of 1974 or is subject to section 

22 72(p) of the Internal Revenue Code of 1986; or 

23 ‘‘(B) a loan from a thrift savings plan per24 mitted under subchapter III of chapter 84 of 
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1 title 5, that satisfies the requirements of section 

2 8433(g) of such title; 

3 but nothing in this paragraph may be construed to 

4 provide that any loan made under a governmental 

5 plan under section 414(d), or a contract or account 

6 under section 403(b), of the Internal Revenue Code 

7 of 1986 constitutes a claim or a debt under this 

8 title;’’. 

9 (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of 

10 title 11, United States Code, as amended by section 215, 

11 is amended by inserting after paragraph (17) the fol12 lowing: 

13 ‘‘(18) owed to a pension, profit-sharing, stock 

14 bonus, or other plan established under section 401, 

15 403, 408, 408A, 414, 457, or 501(c) of the Internal 

16 Revenue Code of 1986, under— 

17 ‘‘(A) a loan permitted under section 

18 408(b)(1) of the Employee Retirement Income 

19 Security Act of 1974, or subject to section 

20 72(p) of the Internal Revenue Code of 1986; or 

21 ‘‘(B) a loan from a thrift savings plan per22 mitted under subchapter III of chapter 84 of 

23 title 5, that satisfies the requirements of section 

24 8433(g) of such title; 
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1 but nothing in this paragraph may be construed to 

2 provide that any loan made under a governmental 

3 plan under section 414(d), or a contract or account 

4 under section 403(b), of the Internal Revenue Code 

5 of 1986 constitutes a claim or a debt under this 

6 title; or’’. 

7 (d) PLAN CONTENTS.—Section 1322 of title 11, 

8 United States Code, is amended by adding at the end the 

9 following: 

10 ‘‘(f) A plan may not materially alter the terms of a 

11 loan described in section 362(b)(19) and any amounts re12 quired to repay such loan shall not constitute ‘disposable 

13 income’ under section 1325.’’. 

14 (e) ASSET LIMITATION.— 

15 (1) LIMITATION.—Section 522 of title 11, 

16 United States Code, is amended by adding at the 

17 end the following: 

18 ‘‘(n) For assets in individual retirement accounts de19 scribed in section 408 or 408A of the Internal Revenue 

20 Code of 1986, other than a simplified employee pension 

21 under section 408(k) of such Code or a simple retirement 

22 account under section 408(p) of such Code, the aggregate 

23 value of such assets exempted under this section, without 

24 regard to amounts attributable to rollover contributions 

25 under section 402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 
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1 403(b)(8) of the Internal Revenue Code of 1986, and 

2 earnings thereon, shall not exceed $1,000,000 in a case 

3 filed by a debtor who is an individual, except that such 

4 amount may be increased if the interests of justice so re5 quire.’’. 

6 (2) ADJUSTMENT OF DOLLAR AMOUNTS.— 

7 Paragraphs (1) and (2) of section 104(b) of title 11, 

8 United States Code, are amended by inserting 

9 ‘‘522(n),’’ after ‘‘522(d),’’. 

10 SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANK11 RUPTCY. 

12 (a) EXCLUSIONS.—Section 541 of title 11, United 

13 States Code, is amended— 

14 (1) in subsection (b)— 

15 (A) in paragraph (4), by striking ‘‘or’’ at 

16 the end; 

17 (B) by redesignating paragraph (5) as 

18 paragraph (9); and 

19 (C) by inserting after paragraph (4) the 

20 following: 

21 ‘‘(5) funds placed in an education individual re22 tirement account (as defined in section 530(b)(1) of 

23 the Internal Revenue Code of 1986) not later than 

24 365 days before the date of the filing of the petition 

25 in a case under this title, but— 
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1 ‘‘(A) only if the designated beneficiary of 

2 such account was a child, stepchild, grandchild, 

3 or stepgrandchild of the debtor for the taxable 

4 year for which funds were placed in such ac5 count; 

6 ‘‘(B) only to the extent that such funds— 

7 ‘‘(i) are not pledged or promised to 

8 any entity in connection with any extension 

9 of credit; and 

10 ‘‘(ii) are not excess contributions (as 

11 described in section 4973(e) of the Internal 

12 Revenue Code of 1986); and 

13 ‘‘(C) in the case of funds placed in all such 

14 accounts having the same designated bene15 ficiary not earlier than 720 days nor later than 

16 365 days before such date, only so much of 

17 such funds as does not exceed $5,000; 

18 ‘‘(6) funds used to purchase a tuition credit or 

19 certificate or contributed to an account in accord20 ance with section 529(b)(1)(A) of the Internal Rev21 enue Code of 1986 under a qualified State tuition 

22 program (as defined in section 529(b)(1) of such 

23 Code) not later than 365 days before the date of the 

24 filing of the petition in a case under this title, but— 
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1 ‘‘(A) only if the designated beneficiary of 

2 the amounts paid or contributed to such tuition 

3 program was a child, stepchild, grandchild, or 

4 stepgrandchild of the debtor for the taxable 

5 year for which funds were paid or contributed; 

6 ‘‘(B) with respect to the aggregate amount 

7 paid or contributed to such program having the 

8 same designated beneficiary, only so much of 

9 such amount as does not exceed the total con10 tributions permitted under section 529(b)(7) of 

11 such Code with respect to such beneficiary, as 

12 adjusted beginning on the date of the filing of 

13 the petition in a case under this title by the an14 nual increase or decrease (rounded to the near15 est tenth of 1 percent) in the education expend16 iture category of the Consumer Price Index pre17 pared by the Department of Labor; and 

18 ‘‘(C) in the case of funds paid or contrib19 uted to such program having the same des20 ignated beneficiary not earlier than 720 days 

21 nor later than 365 days before such date, only 

22 so much of such funds as does not exceed 

23 $5,000;’’; and 

24 (2) by adding at the end the following: 
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1 ‘‘(e) In determining whether any of the relationships 

2 specified in paragraph (5)(A) or (6)(A) of subsection (b) 

3 exists, a legally adopted child of an individual (and a child 

4 who is a member of an individual’s household, if placed 

5 with such individual by an authorized placement agency 

6 for legal adoption by such individual), or a foster child 

7 of an individual (if such child has as the child’s principal 

8 place of abode the home of the debtor and is a member 

9 of the debtor’s household) shall be treated as a child of 

10 such individual by blood.’’. 

11 (b) DEBTOR’S DUTIES.—Section 521 of title 11, 

12 United States Code, as amended by section 106, is amend13 ed by adding at the end the following: 

14 ‘‘(c) In addition to meeting the requirements under 

15 subsection (a), a debtor shall file with the court a record 

16 of any interest that a debtor has in an education individual 

17 retirement account (as defined in section 530(b)(1) of the 

18 Internal Revenue Code of 1986) or under a qualified State 

19 tuition program (as defined in section 529(b)(1) of such 

20 Code).’’. 

21 SEC. 226. DEFINITIONS. 

22 (a) DEFINITIONS.—Section 101 of title 11, United 

23 States Code, is amended— 

24 (1) by inserting after paragraph (2) the fol25 lowing: 
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1 ‘‘(3) ‘assisted person’ means any person whose 

2 debts consist primarily of consumer debts and the 

3 value of whose nonexempt property is less than 

4 $150,000;’’; 

5 (2) by inserting after paragraph (4) the fol6 lowing: 

7 ‘‘(4A) ‘bankruptcy assistance’ means any goods 

8 or services sold or otherwise provided to an assisted 

9 person with the express or implied purpose of pro10 viding information, advice, counsel, document prepa11 ration, or filing, or attendance at a creditors’ meet12 ing or appearing in a case or proceeding on behalf 

13 of another or providing legal representation with re14 spect to a case or proceeding under this title;’’; and 

15 (3) by inserting after paragraph (12) the fol16 lowing: 

17 ‘‘(12A) ‘debt relief agency’ means any person 

18 who provides any bankruptcy assistance to an as19 sisted person in return for the payment of money or 

20 other valuable consideration, or who is a bankruptcy 

21 petition preparer under section 110, but does not in22 clude— 

23 ‘‘(A) any person who is an officer, director, 

24 employee, or agent of a person who provides 
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1 such assistance or of the bankruptcy petition 

2 preparer; 

3 ‘‘(B) a nonprofit organization that is ex4 empt from taxation under section 501(c)(3) of 

5 the Internal Revenue Code of 1986; 

6 ‘‘(C) a creditor of such assisted person, to 

7 the extent that the creditor is assisting such as8 sisted person to restructure any debt owed by 

9 such assisted person to the creditor; 

10 ‘‘(D) a depository institution (as defined in 

11 section 3 of the Federal Deposit Insurance Act) 

12 or any Federal credit union or State credit 

13 union (as those terms are defined in section 

14 101 of the Federal Credit Union Act), or any 

15 affiliate or subsidiary of such depository institu16 tion or credit union; or 

17 ‘‘(E) an author, publisher, distributor, or 

18 seller of works subject to copyright protection 

19 under title 17, when acting in such capacity.’’. 

20 (b) CONFORMING AMENDMENT.—Section 104(b) of 

21 title 11, United States Code, is amended by inserting 

22 ‘‘101(3),’’ after ‘‘sections’’ each place it appears. 
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1 SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES. 

2 (a) ENFORCEMENT.—Subchapter II of chapter 5 of 

3 title 11, United States Code, is amended by adding at the 

4 end the following: 

5 ‘‘§ 526. Restrictions on debt relief agencies 

6 ‘‘(a) A debt relief agency shall not— 

7 ‘‘(1) fail to perform any service that such agen8 cy informed an assisted person or prospective as9 sisted person it would provide in connection with a 

10 case or proceeding under this title; 

11 ‘‘(2) make any statement, or counsel or advise 

12 any assisted person or prospective assisted person to 

13 make a statement in a document filed in a case or 

14 proceeding under this title, that is untrue and mis15 leading, or that upon the exercise of reasonable care, 

16 should have been known by such agency to be untrue 

17 or misleading; 

18 ‘‘(3) misrepresent to any assisted person or pro19 spective assisted person, directly or indirectly, af20 firmatively or by material omission, with respect 

21 to— 

22 ‘‘(A) the services that such agency will pro23 vide to such person; or 

24 ‘‘(B) the benefits and risks that may result 

25 if such person becomes a debtor in a case under 

26 this title; or 
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1 ‘‘(4) advise an assisted person or prospective 

2 assisted person to incur more debt in contemplation 

3 of such person filing a case under this title or to pay 

4 an attorney or bankruptcy petition preparer fee or 

5 charge for services performed as part of preparing 

6 for or representing a debtor in a case under this 

7 title. 

8 ‘‘(b) Any waiver by any assisted person of any protec9 tion or right provided under this section shall not be en10 forceable against the debtor by any Federal or State court 

11 or any other person, but may be enforced against a debt 

12 relief agency. 

13 ‘‘(c)(1) Any contract for bankruptcy assistance be14 tween a debt relief agency and an assisted person that 

15 does not comply with the material requirements of this 

16 section, section 527, or section 528 shall be void and may 

17 not be enforced by any Federal or State court or by any 

18 other person, other than such assisted person. 

19 ‘‘(2) Any debt relief agency shall be liable to an as20 sisted person in the amount of any fees or charges in con21 nection with providing bankruptcy assistance to such per22 son that such debt relief agency has received, for actual 

23 damages, and for reasonable attorneys’ fees and costs if 

24 such agency is found, after notice and a hearing, to have— 
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1 ‘‘(A) intentionally or negligently failed to com2 ply with any provision of this section, section 527, 

3 or section 528 with respect to a case or proceeding 

4 under this title for such assisted person; 

5 ‘‘(B) provided bankruptcy assistance to an as6 sisted person in a case or proceeding under this title 

7 that is dismissed or converted to a case under an8 other chapter of this title because of such agency’s 

9 intentional or negligent failure to file any required 

10 document including those specified in section 521; or 

11 ‘‘(C) intentionally or negligently disregarded the 

12 material requirements of this title or the Federal 

13 Rules of Bankruptcy Procedure applicable to such 

14 agency. 

15 ‘‘(3) In addition to such other remedies as are pro16 vided under State law, whenever the chief law enforcement 

17 officer of a State, or an official or agency designated by 

18 a State, has reason to believe that any person has violated 

19 or is violating this section, the State— 

20 ‘‘(A) may bring an action to enjoin such viola21 tion; 

22 ‘‘(B) may bring an action on behalf of its resi23 dents to recover the actual damages of assisted per24 sons arising from such violation, including any liabil25 ity under paragraph (2); and 
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1 ‘‘(C) in the case of any successful action under 

2 subparagraph (A) or (B), shall be awarded the costs 

3 of the action and reasonable attorneys’ fees as deter4 mined by the court. 

5 ‘‘(4) The district courts of the United States for dis6 tricts located in the State shall have concurrent jurisdic7 tion of any action under subparagraph (A) or (B) of para8 graph (3). 

9 ‘‘(5) Notwithstanding any other provision of Federal 

10 law and in addition to any other remedy provided under 

11 Federal or State law, if the court, on its own motion or 

12 on the motion of the United States trustee or the debtor, 

13 finds that a person intentionally violated this section, or 

14 engaged in a clear and consistent pattern or practice of 

15 violating this section, the court may— 

16 ‘‘(A) enjoin the violation of such section; or 

17 ‘‘(B) impose an appropriate civil penalty 

18 against such person. 

19 ‘‘(d) No provision of this section, section 527, or sec20 tion 528 shall— 

21 ‘‘(1) annul, alter, affect, or exempt any person 

22 subject to such sections from complying with any 

23 law of any State except to the extent that such law 

24 is inconsistent with those sections, and then only to 

25 the extent of the inconsistency; or 
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1 ‘‘(2) be deemed to limit or curtail the authority 

2 or ability— 

3 ‘‘(A) of a State or subdivision or instru4 mentality thereof, to determine and enforce 

5 qualifications for the practice of law under the 

6 laws of that State; or 

7 ‘‘(B) of a Federal court to determine and 

8 enforce the qualifications for the practice of law 

9 before that court.’’. 

10 (b) CONFORMING AMENDMENT.—The table of sec11 tions for chapter 5 of title 11, United States Code, is 

12 amended by inserting after the item relating to section 

13 525, the following: 

‘‘526. Restrictions on debt relief agencies.’’. 

14 SEC. 228. DISCLOSURES. 

15 (a) DISCLOSURES.—Subchapter II of chapter 5 of 

16 title 11, United States Code, as amended by section 227, 

17 is amended by adding at the end the following: 

18 ‘‘§ 527. Disclosures 

19 ‘‘(a) A debt relief agency providing bankruptcy assist20 ance to an assisted person shall provide— 

21 ‘‘(1) the written notice required under section 

22 342(b)(1); and 

23 ‘‘(2) to the extent not covered in the written no24 tice described in paragraph (1), and not later than 

25 3 business days after the first date on which a debt 
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1 relief agency first offers to provide any bankruptcy 

2 assistance services to an assisted person, a clear and 

3 conspicuous written notice advising assisted persons 

4 that— 

5 ‘‘(A) all information that the assisted per6 son is required to provide with a petition and 

7 thereafter during a case under this title is re8 quired to be complete, accurate, and truthful; 

9 ‘‘(B) all assets and all liabilities are re10 quired to be completely and accurately disclosed 

11 in the documents filed to commence the case, 

12 and the replacement value of each asset as de13 fined in section 506 must be stated in those 

14 documents where requested after reasonable in15 quiry to establish such value; 

16 ‘‘(C) current monthly income, the amounts 

17 specified in section 707(b)(2), and, in a case 

18 under chapter 13 of this title, disposable income 

19 (determined in accordance with section 

20 707(b)(2)), are required to be stated after rea21 sonable inquiry; and 

22 ‘‘(D) information that an assisted person 

23 provides during their case may be audited pur24 suant to this title, and that failure to provide 

25 such information may result in dismissal of the 
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1 case under this title or other sanction, including 

2 a criminal sanction. 

3 ‘‘(b) A debt relief agency providing bankruptcy assist4 ance to an assisted person shall provide each assisted per5 son at the same time as the notices required under sub6 section (a)(1) the following statement, to the extent appli7 cable, or one substantially similar. The statement shall be 

8 clear and conspicuous and shall be in a single document 

9 separate from other documents or notices provided to the 

10 assisted person: 

11 ‘‘ ‘IMPORTANT INFORMATION ABOUT BANK12 RUPTCY ASSISTANCE SERVICES FROM AN AT13 TORNEY OR BANKRUPTCY PETITION PRE14 PARER. 

15 ‘‘ ‘If you decide to seek bankruptcy relief, you can 

16 represent yourself, you can hire an attorney to represent 

17 you, or you can get help in some localities from a bank18 ruptcy petition preparer who is not an attorney. THE 

19 LAW REQUIRES AN ATTORNEY OR BANKRUPTCY 

20 PETITION PREPARER TO GIVE YOU A WRITTEN 

21 CONTRACT SPECIFYING WHAT THE ATTORNEY 

22 OR BANKRUPTCY PETITION PREPARER WILL DO 

23 FOR YOU AND HOW MUCH IT WILL COST. Ask to 

24 see the contract before you hire anyone. 
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1 ‘‘ ‘The following information helps you understand 

2 what must be done in a routine bankruptcy case to help 

3 you evaluate how much service you need. Although bank4 ruptcy can be complex, many cases are routine. 

5 ‘‘ ‘Before filing a bankruptcy case, either you or your 

6 attorney should analyze your eligibility for different forms 

7 of debt relief available under the Bankruptcy Code and 

8 which form of relief is most likely to be beneficial for you. 

9 Be sure you understand the relief you can obtain and its 

10 limitations. To file a bankruptcy case, documents called 

11 a Petition, Schedules and Statement of Financial Affairs, 

12 as well as in some cases a Statement of Intention need 

13 to be prepared correctly and filed with the bankruptcy 

14 court. You will have to pay a filing fee to the bankruptcy 

15 court. Once your case starts, you will have to attend the 

16 required first meeting of creditors where you may be ques17 tioned by a court official called a ‘trustee’ and by credi18 tors. 

19 ‘‘ ‘If you choose to file a chapter 7 case, you may 

20 be asked by a creditor to reaffirm a debt. You may want 

21 help deciding whether to do so. A creditor is not permitted 

22 to coerce you into reaffirming your debts. 

23 ‘‘ ‘If you choose to file a chapter 13 case in which 

24 you repay your creditors what you can afford over 3 to 

25 5 years, you may also want help with preparing your chap-
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1 ter 13 plan and with the confirmation hearing on your 

2 plan which will be before a bankruptcy judge. 

3 ‘‘ ‘If you select another type of relief under the Bank4 ruptcy Code other than chapter 7 or chapter 13, you will 

5 want to find out what should be done from someone famil6 iar with that type of relief. 

7 ‘‘ ‘Your bankruptcy case may also involve litigation. 

8 You are generally permitted to represent yourself in litiga9 tion in bankruptcy court, but only attorneys, not bank10 ruptcy petition preparers, can give you legal advice.’. 

11 ‘‘(c) Except to the extent the debt relief agency pro12 vides the required information itself after reasonably dili13 gent inquiry of the assisted person or others so as to ob14 tain such information reasonably accurately for inclusion 

15 on the petition, schedules or statement of financial affairs, 

16 a debt relief agency providing bankruptcy assistance to an 

17 assisted person, to the extent permitted by nonbankruptcy 

18 law, shall provide each assisted person at the time re19 quired for the notice required under subsection (a)(1) rea20 sonably sufficient information (which shall be provided in 

21 a clear and conspicuous writing) to the assisted person 

22 on how to provide all the information the assisted person 

23 is required to provide under this title pursuant to section 

24 521, including— 
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1 ‘‘(1) how to value assets at replacement value, 

2 determine current monthly income, the amounts 

3 specified in section 707(b)(2) and, in a chapter 13 

4 case, how to determine disposable income in accord5 ance with section 707(b)(2) and related calculations; 

6 ‘‘(2) how to complete the list of creditors, in7 cluding how to determine what amount is owed and 

8 what address for the creditor should be shown; and 

9 ‘‘(3) how to determine what property is exempt 

10 and how to value exempt property at replacement 

11 value as defined in section 506. 

12 ‘‘(d) A debt relief agency shall maintain a copy of 

13 the notices required under subsection (a) of this section 

14 for 2 years after the date on which the notice is given 

15 the assisted person.’’. 

16 (b) CONFORMING AMENDMENT.—The table of sec17 tions for chapter 5 of title 11, United States Code, as 

18 amended by section 227, is amended by inserting after the 

19 item relating to section 526 the following: 

‘‘527. Disclosures.’’. 

20 SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES. 

21 (a) ENFORCEMENT.—Subchapter II of chapter 5 of 

22 title 11, United States Code, as amended by sections 227 

23 and 228, is amended by adding at the end the following: 

24 ‘‘§ 528. Requirements for debt relief agencies 

25 ‘‘(a) A debt relief agency shall— 
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1 ‘‘(1) not later than 5 business days after the 

2 first date on which such agency provides any bank3 ruptcy assistance services to an assisted person, but 

4 prior to such assisted person’s petition under this 

5 title being filed, execute a written contract with such 

6 assisted person that explains clearly and conspicu7 ously— 

8 ‘‘(A) the services such agency will provide 

9 to such assisted person; and 

10 ‘‘(B) the fees or charges for such services, 

11 and the terms of payment; 

12 ‘‘(2) provide the assisted person with a copy of 

13 the fully executed and completed contract; 

14 ‘‘(3) clearly and conspicuously disclose in any 

15 advertisement of bankruptcy assistance services or of 

16 the benefits of bankruptcy directed to the general 

17 public (whether in general media, seminars or spe18 cific mailings, telephonic or electronic messages, or 

19 otherwise) that the services or benefits are with re20 spect to bankruptcy relief under this title; and 

21 ‘‘(4) clearly and conspicuously use the following 

22 statement in such advertisement: ‘We are a debt re23 lief agency. We help people file for bankruptcy relief 

24 under the Bankruptcy Code.’ or a substantially simi25 lar statement. 
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1 ‘‘(b)(1) An advertisement of bankruptcy assistance 

2 services or of the benefits of bankruptcy directed to the 

3 general public includes— 

4 ‘‘(A) descriptions of bankruptcy assistance in 

5 connection with a chapter 13 plan whether or not 

6 chapter 13 is specifically mentioned in such adver7 tisement; and 

8 ‘‘(B) statements such as ‘federally supervised 

9 repayment plan’ or ‘Federal debt restructuring help’ 

10 or other similar statements that could lead a reason11 able consumer to believe that debt counseling was 

12 being offered when in fact the services were directed 

13 to providing bankruptcy assistance with a chapter 

14 13 plan or other form of bankruptcy relief under 

15 this title. 

16 ‘‘(2) An advertisement, directed to the general public, 

17 indicating that the debt relief agency provides assistance 

18 with respect to credit defaults, mortgage foreclosures, evic19 tion proceedings, excessive debt, debt collection pressure, 

20 or inability to pay any consumer debt shall— 

21 ‘‘(A) disclose clearly and conspicuously in such 

22 advertisement that the assistance may involve bank23 ruptcy relief under this title; and 

24 ‘‘(B) include the following statement: ‘We are a 

25 debt relief agency. We help people file for bank-
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1 ruptcy relief under the Bankruptcy Code.’ or a sub2 stantially similar statement.’’. 

3 (b) CONFORMING AMENDMENT.—The table of sec4 tions for chapter 5 of title 11, United States Code, as 

5 amended by section 227 and 228, is amended by inserting 

6 after the item relating to section 527, the following: 

‘‘528. Requirements for debt relief agencies.’’. 

7 SEC. 230. GAO STUDY. 

8 (a) STUDY.—Not later than 270 days after the date 

9 of enactment of this Act, the Comptroller General of the 

10 United States shall conduct a study of the feasibility, ef11 fectiveness, and cost of requiring trustees appointed under 

12 title 11, United States Code, or the bankruptcy courts, 

13 to provide to the Office of Child Support Enforcement 

14 promptly after the commencement of cases by debtors who 

15 are individuals under such title, the names and social secu16 rity account numbers of such debtors for the purposes of 

17 allowing such Office to determine whether such debtors 

18 have outstanding obligations for child support (as deter19 mined on the basis of information in the Federal Case 

20 Registry or other national database). 

21 (b) REPORT.—Not later than 300 days after the date 

22 of enactment of this Act, the Comptroller General shall 

23 submit to the President pro tempore of the Senate and 

24 the Speaker of the House of Representatives a report con25 taining the results of the study required by subsection (a). 
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1 SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE IN2 FORMATION. 

3 (a) LIMITATION.—Section 363(b)(1) of title 11, 

4 United States Code, is amended by striking the period at 

5 the end and inserting the following: 

6 ‘‘, except that if the debtor in connection with offering 

7 a product or a service discloses to an individual a policy 

8 prohibiting the transfer of personally identifiable informa9 tion about individuals to persons that are not affiliated 

10 with the debtor and if such policy is in effect on the date 

11 of the commencement of the case, then the trustee may 

12 not sell or lease personally identifiable information to any 

13 person unless— 

14 ‘‘(A) such sale or such lease is consistent with 

15 such policy; or 

16 ‘‘(B) after appointment of a consumer privacy 

17 ombudsman in accordance with section 332, and 

18 after notice and a hearing, the court approves such 

19 sale or such lease— 

20 ‘‘(i) giving due consideration to the facts, 

21 circumstances, and conditions of such sale or 

22 such lease; and 

23 ‘‘(ii) finding that no showing was made 

24 that such sale or such lease would violate appli25 cable nonbankruptcy law.’’. 
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1 (b) DEFINITION.—Section 101 of title 11, United 

2 States Code, is amended by inserting after paragraph (41) 

3 the following: 

4 ‘‘(41A) ‘personally identifiable information’ 

5 means— 

6 ‘‘(A) if provided by an individual to the 

7 debtor in connection with obtaining a product 

8 or a service from the debtor primarily for per9 sonal, family, or household purposes— 

10 ‘‘(i) the first name (or initial) and last 

11 name of such individual, whether given at 

12 birth or time of adoption, or resulting from 

13 a lawful change of name; 

14 ‘‘(ii) the geographical address of a 

15 physical place of residence of such indi16 vidual; 

17 ‘‘(iii) an electronic address (including 

18 an e-mail address) of such individual; 

19 ‘‘(iv) a telephone number dedicated to 

20 contacting such individual at such physical 

21 place of residence; 

22 ‘‘(v) a social security account number 

23 issued to such individual; or 

24 ‘‘(vi) the account number of a credit 

25 card issued to such individual; or 
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1 ‘‘(B) if identified in connection with 1 or 

2 more of the items of information specified in 

3 subparagraph (A)— 

4 ‘‘(i) a birth date, the number of a cer5 tificate of birth or adoption, or a place of 

6 birth; or 

7 ‘‘(ii) any other information concerning 

8 an identified individual that, if disclosed, 

9 will result in contacting or identifying such 

10 individual physically or electronically;’’. 

11 SEC. 232. CONSUMER PRIVACY OMBUDSMAN. 

12 (a) CONSUMER PRIVACY OMBUDSMAN.—Title 11 of 

13 the United States Code is amended by inserting after sec14 tion 331 the following: 

15 ‘‘§ 332. Consumer privacy ombudsman 

16 ‘‘(a) If a hearing is required under section 

17 363(b)(1)(B), the court shall order the United States 

18 trustee to appoint, not later than 5 days before the com19 mencement of the hearing, 1 disinterested person (other 

20 than the United States trustee) to serve as the consumer 

21 privacy ombudsman in the case and shall require that no22 tice of such hearing be timely given to such ombudsman. 

23 ‘‘(b) The consumer privacy ombudsman may appear 

24 and be heard at such hearing and shall provide to the 

25 court information to assist the court in its consideration 
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1 of the facts, circumstances, and conditions of the proposed 

2 sale or lease of personally identifiable information under 

3 section 363(b)(1)(B). Such information may include pres4 entation of— 

5 ‘‘(1) the debtor’s privacy policy; 

6 ‘‘(2) the potential losses or gains of privacy to 

7 consumers if such sale or such lease is approved by 

8 the court; 

9 ‘‘(3) the potential costs or benefits to con10 sumers if such sale or such lease is approved by the 

11 court; and 

12 ‘‘(4) the potential alternatives that would miti13 gate potential privacy losses or potential costs to 

14 consumers. 

15 ‘‘(c) A consumer privacy ombudsman shall not dis16 close any personally identifiable information obtained by 

17 the ombudsman under this title.’’. 

18 (b) COMPENSATION OF CONSUMER PRIVACY OM19 BUDSMAN.—Section 330(a)(1) of title 11, United States 

20 Code, is amended in the matter preceding subparagraph 

21 (A), by inserting ‘‘a consumer privacy ombudsman ap22 pointed under section 332,’’ before ‘‘an examiner’’. 

23 (c) CONFORMING AMENDMENT.—The table of sec24 tions for subchapter II of chapter 3 of title 11, United 
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1 States Code, is amended by adding at the end the fol2 lowing: 

‘‘332. Consumer privacy ombudsman.’’. 

3 SEC. 233. PROHIBITION ON DISCLOSURE OF NAME OF 

4 MINOR CHILDREN. 

5 (a) PROHIBITION.—Title 11 of the United States 

6 Code, as amended by section 106, is amended by inserting 

7 after section 111 the following: 

8 ‘‘§ 112. Prohibition on disclosure of name of minor 

9 children 

10 ‘‘The debtor may be required to provide information 

11 regarding a minor child involved in matters under this title 

12 but may not be required to disclose in the public records 

13 in the case the name of such minor child. The debtor may 

14 be required to disclose the name of such minor child in 

15 a nonpublic record that is maintained by the court and 

16 made available by the court for examination by the United 

17 States trustee, the trustee, and the auditor (if any) serving 

18 under section 586(f) of title 28, in the case. The court, 

19 the United States trustee, the trustee, and such auditor 

20 shall not disclose the name of such minor child maintained 

21 in such nonpublic record.’’. 

22 (b) CLERICAL AMENDMENT.—The table of sections 

23 for chapter 1 of title 11, United States Code, as amended 
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1 by section 106, is amended by inserting after the item re2 lating to section 111 the following: 

‘‘112. Prohibition on disclosure of name of minor children.’’. 

3 (c) CONFORMING AMENDMENT.—Section 107(a) of 

4 title 11, United States Code, is amended by inserting ‘‘and 

5 subject to section 112’’ after ‘‘section’’. 

6 SEC. 234. PROTECTION OF PERSONAL INFORMATION. 

7 (a) RESTRICTION OF PUBLIC ACCESS TO CERTAIN

8 INFORMATION CONTAINED IN BANKRUPTCY CASE

9 FILES.—Section 107 of title 11, United States Code, is 

10 amended by adding at the end the following: 

11 ‘‘(c)(1) The bankruptcy court, for cause, may protect 

12 an individual, with respect to the following types of infor13 mation to the extent the court finds that disclosure of such 

14 information would create undue risk of identity theft or 

15 other unlawful injury to the individual or the individual’s 

16 property: 

17 ‘‘(A) Any means of identification (as defined in 

18 section 1028(d) of title 18) contained in a paper 

19 filed, or to be filed, in a case under this title. 

20 ‘‘(B) Other information contained in a paper 

21 described in subparagraph (A). 

22 ‘‘(2) Upon ex parte application demonstrating cause, 

23 the court shall provide access to information protected 

24 pursuant to paragraph (1) to an entity acting pursuant 
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1 to the police or regulatory power of a domestic govern2 mental unit. 

3 ‘‘(3) The United States trustee, bankruptcy adminis4 trator, trustee, and any auditor serving under section 

5 586(f) of title 28— 

6 ‘‘(A) shall have full access to all information 

7 contained in any paper filed or submitted in a case 

8 under this title; and 

9 ‘‘(B) shall not disclose information specifically 

10 protected by the court under this title.’’. 

11 (b) SECURITY OF SOCIAL SECURITY ACCOUNT NUM12 BER OF DEBTOR IN NOTICE TO CREDITOR.—Section 

13 342(c) of title 11, United States Code, is amended— 

14 (1) by inserting ‘‘last 4 digits of the’’ before 

15 ‘‘taxpayer identification number’’; and 

16 (2) by adding at the end the following: ‘‘If the 

17 notice concerns an amendment that adds a creditor 

18 to the schedules of assets and liabilities, the debtor 

19 shall include the full taxpayer identification number 

20 in the notice sent to that creditor, but the debtor 

21 shall include only the last 4 digits of the taxpayer 

22 identification number in the copy of the notice filed 

23 with the court.’’. 
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1 (c) CONFORMING AMENDMENT.—Section 107(a) of 

2 title 11, United States Code, is amended by striking ‘‘sub3 section (b),’’ and inserting ‘‘subsections (b) and (c),’’. 

4 TITLE III—DISCOURAGING 

5 BANKRUPTCY ABUSE 

6 SEC. 301. TECHNICAL AMENDMENTS. 

7 Section 523(a)(17) of title 11, United States Code, 

8 is amended— 

9 (1) by striking ‘‘by a court’’ and inserting ‘‘on 

10 a prisoner by any court’’; 

11 (2) by striking ‘‘section 1915(b) or (f)’’ and in12 serting ‘‘subsection (b) or (f)(2) of section 1915’’; 

13 and 

14 (3) by inserting ‘‘(or a similar non-Federal 

15 law)’’ after ‘‘title 28’’ each place it appears. 

16 SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS. 

17 Section 362(c) of title 11, United States Code, is 

18 amended— 

19 (1) in paragraph (1), by striking ‘‘and’’ at the 

20 end; 

21 (2) in paragraph (2), by striking the period at 

22 the end and inserting a semicolon; and 

23 (3) by adding at the end the following: 

24 ‘‘(3) if a single or joint case is filed by or 

25 against debtor who is an individual in a case under 
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1 chapter 7, 11, or 13, and if a single or joint case 

2 of the debtor was pending within the preceding 1- 

3 year period but was dismissed, other than a case 

4 refiled under a chapter other than chapter 7 after 

5 dismissal under section 707(b)— 

6 ‘‘(A) the stay under subsection (a) with re7 spect to any action taken with respect to a debt 

8 or property securing such debt or with respect 

9 to any lease shall terminate with respect to the 

10 debtor on the 30th day after the filing of the 

11 later case; 

12 ‘‘(B) on the motion of a party in interest 

13 for continuation of the automatic stay and upon 

14 notice and a hearing, the court may extend the 

15 stay in particular cases as to any or all credi16 tors (subject to such conditions or limitations 

17 as the court may then impose) after notice and 

18 a hearing completed before the expiration of the 

19 30-day period only if the party in interest dem20 onstrates that the filing of the later case is in 

21 good faith as to the creditors to be stayed; and 

22 ‘‘(C) for purposes of subparagraph (B), a 

23 case is presumptively filed not in good faith 

24 (but such presumption may be rebutted by clear 

25 and convincing evidence to the contrary)— 
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1 ‘‘(i) as to all creditors, if— 

2 ‘‘(I) more than 1 previous case 

3 under any of chapters 7, 11, and 13 

4 in which the individual was a debtor 

5 was pending within the preceding 1- 

6 year period; 

7 ‘‘(II) a previous case under any 

8 of chapters 7, 11, and 13 in which the 

9 individual was a debtor was dismissed 

10 within such 1-year period, after the 

11 debtor failed to— 

12 ‘‘(aa) file or amend the peti13 tion or other documents as re14 quired by this title or the court 

15 without substantial excuse (but 

16 mere inadvertence or negligence 

17 shall not be a substantial excuse 

18 unless the dismissal was caused 

19 by the negligence of the debtor’s 

20 attorney); 

21 ‘‘(bb) provide adequate pro22 tection as ordered by the court; 

23 or 

24 ‘‘(cc) perform the terms of a 

25 plan confirmed by the court; or 
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1 ‘‘(III) there has not been a sub2 stantial change in the financial or per3 sonal affairs of the debtor since the 

4 dismissal of the next most previous 

5 case under chapter 7, 11, or 13 or 

6 any other reason to conclude that the 

7 later case will be concluded— 

8 ‘‘(aa) if a case under chap9 ter 7, with a discharge; or 

10 ‘‘(bb) if a case under chap11 ter 11 or 13, with a confirmed 

12 plan that will be fully performed; 

13 and 

14 ‘‘(ii) as to any creditor that com15 menced an action under subsection (d) in 

16 a previous case in which the individual was 

17 a debtor if, as of the date of dismissal of 

18 such case, that action was still pending or 

19 had been resolved by terminating, condi20 tioning, or limiting the stay as to actions 

21 of such creditor; and 

22 ‘‘(4)(A)(i) if a single or joint case is filed by or 

23 against a debtor who is an individual under this 

24 title, and if 2 or more single or joint cases of the 

25 debtor were pending within the previous year but 
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1 were dismissed, other than a case refiled under sec2 tion 707(b), the stay under subsection (a) shall not 

3 go into effect upon the filing of the later case; and 

4 ‘‘(ii) on request of a party in interest, the court 

5 shall promptly enter an order confirming that no 

6 stay is in effect; 

7 ‘‘(B) if, within 30 days after the filing of the 

8 later case, a party in interest requests the court may 

9 order the stay to take effect in the case as to any 

10 or all creditors (subject to such conditions or limita11 tions as the court may impose), after notice and a 

12 hearing, only if the party in interest demonstrates 

13 that the filing of the later case is in good faith as 

14 to the creditors to be stayed; 

15 ‘‘(C) a stay imposed under subparagraph (B) 

16 shall be effective on the date of the entry of the 

17 order allowing the stay to go into effect; and 

18 ‘‘(D) for purposes of subparagraph (B), a case 

19 is presumptively filed not in good faith (but such 

20 presumption may be rebutted by clear and con21 vincing evidence to the contrary)— 

22 ‘‘(i) as to all creditors if— 

23 ‘‘(I) 2 or more previous cases under 

24 this title in which the individual was a 
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1 debtor were pending within the 1-year pe2 riod; 

3 ‘‘(II) a previous case under this title 

4 in which the individual was a debtor was 

5 dismissed within the time period stated in 

6 this paragraph after the debtor failed to 

7 file or amend the petition or other docu8 ments as required by this title or the court 

9 without substantial excuse (but mere inad10 vertence or negligence shall not be sub11 stantial excuse unless the dismissal was 

12 caused by the negligence of the debtor’s at13 torney), failed to provide adequate protec14 tion as ordered by the court, or failed to 

15 perform the terms of a plan confirmed by 

16 the court; or 

17 ‘‘(III) there has not been a substan18 tial change in the financial or personal af19 fairs of the debtor since the dismissal of 

20 the next most previous case under this 

21 title, or any other reason to conclude that 

22 the later case will not be concluded, if a 

23 case under chapter 7, with a discharge, 

24 and if a case under chapter 11 or 13, with 
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1 a confirmed plan that will be fully per2 formed; or 

3 ‘‘(ii) as to any creditor that commenced an 

4 action under subsection (d) in a previous case 

5 in which the individual was a debtor if, as of 

6 the date of dismissal of such case, such action 

7 was still pending or had been resolved by termi8 nating, conditioning, or limiting the stay as to 

9 such action of such creditor.’’. 

10 SEC. 303. CURBING ABUSIVE FILINGS. 

11 (a) IN GENERAL.—Section 362(d) of title 11, United 

12 States Code, is amended— 

13 (1) in paragraph (2), by striking ‘‘or’’ at the 

14 end; 

15 (2) in paragraph (3), by striking the period at 

16 the end and inserting ‘‘; or’’; and 

17 (3) by adding at the end the following: 

18 ‘‘(4) with respect to a stay of an act against 

19 real property under subsection (a), by a creditor 

20 whose claim is secured by an interest in such real 

21 property, if the court finds that the filing of the pe22 tition was part of a scheme to delay, hinder, and de23 fraud creditors that involved either— 

24 ‘‘(A) transfer of all or part ownership of, 

25 or other interest in, such real property without 
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1 the consent of the secured creditor or court ap2 proval; or 

3 ‘‘(B) multiple bankruptcy filings affecting 

4 such real property. 

5 If recorded in compliance with applicable State laws gov6 erning notices of interests or liens in real property, an 

7 order entered under paragraph (4) shall be binding in any 

8 other case under this title purporting to affect such real 

9 property filed not later than 2 years after the date of the 

10 entry of such order by the court, except that a debtor in 

11 a subsequent case under this title may move for relief from 

12 such order based upon changed circumstances or for good 

13 cause shown, after notice and a hearing. Any Federal, 

14 State, or local governmental unit that accepts notices of 

15 interests or liens in real property shall accept any certified 

16 copy of an order described in this subsection for indexing 

17 and recording.’’. 

18 (b) AUTOMATIC STAY.—Section 362(b) of title 11, 

19 United States Code, as amended by section 224, is amend20 ed by inserting after paragraph (19), the following: 

21 ‘‘(20) under subsection (a), of any act to en22 force any lien against or security interest in real 

23 property following entry of the order under sub24 section (d)(4) as to such real property in any prior 

25 case under this title, for a period of 2 years after 
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1 the date of the entry of such an order, except that 

2 the debtor, in a subsequent case under this title, 

3 may move for relief from such order based upon 

4 changed circumstances or for other good cause 

5 shown, after notice and a hearing; 

6 ‘‘(21) under subsection (a), of any act to en7 force any lien against or security interest in real 

8 property— 

9 ‘‘(A) if the debtor is ineligible under sec10 tion 109(g) to be a debtor in a case under this 

11 title; or 

12 ‘‘(B) if the case under this title was filed 

13 in violation of a bankruptcy court order in a 

14 prior case under this title prohibiting the debtor 

15 from being a debtor in another case under this 

16 title;’’. 

17 SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY 

18 SECURITY. 

19 Title 11, United States Code, is amended— 

20 (1) in section 521(a), as so designated by sec21 tion 106— 

22 (A) in paragraph (4), by striking ‘‘, and’’ 

23 at the end and inserting a semicolon; 

24 (B) in paragraph (5), by striking the pe25 riod at the end and inserting ‘‘; and’’; and 
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1 (C) by adding at the end the following: 

2 ‘‘(6) in a case under chapter 7 of this title in 

3 which the debtor is an individual, not retain posses4 sion of personal property as to which a creditor has 

5 an allowed claim for the purchase price secured in 

6 whole or in part by an interest in such personal 

7 property unless the debtor, not later than 45 days 

8 after the first meeting of creditors under section 

9 341(a), either— 

10 ‘‘(A) enters into an agreement with the 

11 creditor pursuant to section 524(c) with respect 

12 to the claim secured by such property; or 

13 ‘‘(B) redeems such property from the secu14 rity interest pursuant to section 722. 

15 If the debtor fails to so act within the 45-day period re16 ferred to in paragraph (6), the stay under section 362(a) 

17 is terminated with respect to the personal property of the 

18 estate or of the debtor which is affected, such property 

19 shall no longer be property of the estate, and the creditor 

20 may take whatever action as to such property as is per21 mitted by applicable nonbankruptcy law, unless the court 

22 determines on the motion of the trustee filed before the 

23 expiration of such 45-day period, and after notice and a 

24 hearing, that such property is of consequential value or 

25 benefit to the estate, orders appropriate adequate protec-
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1 tion of the creditor’s interest, and orders the debtor to 

2 deliver any collateral in the debtor’s possession to the 

3 trustee.’’; and 

4 (2) in section 722, by inserting ‘‘in full at the 

5 time of redemption’’ before the period at the end. 

6 SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE 

7 DEBTOR DOES NOT COMPLETE INTENDED 

8 SURRENDER OF CONSUMER DEBT COLLAT9 ERAL. 

10 Title 11, United States Code, is amended— 

11 (1) in section 362, as amended by section 

12 106— 

13 (A) in subsection (c), by striking ‘‘(e), and 

14 (f)’’ and inserting ‘‘(e), (f), and (h)’’; 

15 (B) by redesignating subsection (h) as sub16 section (k) and transferring such subsection so 

17 as to insert it after subsection (j) as added by 

18 section 106; and 

19 (C) by inserting after subsection (g) the 

20 following: 

21 ‘‘(h)(1) In a case in which the debtor is an individual, 

22 the stay provided by subsection (a) is terminated with re23 spect to personal property of the estate or of the debtor 

24 securing in whole or in part a claim, or subject to an unex25 pired lease, and such personal property shall no longer be 
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1 property of the estate if the debtor fails within the applica2 ble time set by section 521(a)(2)— 

3 ‘‘(A) to file timely any statement of intention 

4 required under section 521(a)(2) with respect to 

5 such personal property or to indicate in such state6 ment that the debtor will either surrender such per7 sonal property or retain it and, if retaining such per8 sonal property, either redeem such personal property 

9 pursuant to section 722, enter into an agreement of 

10 the kind specified in section 524(c) applicable to the 

11 debt secured by such personal property, or assume 

12 such unexpired lease pursuant to section 365(p) if 

13 the trustee does not do so, as applicable; and 

14 ‘‘(B) to take timely the action specified in such 

15 statement, as it may be amended before expiration 

16 of the period for taking action, unless such state17 ment specifies the debtor’s intention to reaffirm such 

18 debt on the original contract terms and the creditor 

19 refuses to agree to the reaffirmation on such terms. 

20 ‘‘(2) Paragraph (1) does not apply if the court deter21 mines, on the motion of the trustee filed before the expira22 tion of the applicable time set by section 521(a)(2), after 

23 notice and a hearing, that such personal property is of 

24 consequential value or benefit to the estate, and orders 

25 appropriate adequate protection of the creditor’s interest, 
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1 and orders the debtor to deliver any collateral in the debt2 or’s possession to the trustee. If the court does not so de3 termine, the stay provided by subsection (a) shall termi4 nate upon the conclusion of the hearing on the motion.’’; 

5 and 

6 (2) in section 521, as amended by sections 106 

7 and 225— 

8 (A) in subsection (a)(2) by striking ‘‘con9 sumer’’; 

10 (B) in subsection (a)(2)(B)— 

11 (i) by striking ‘‘forty-five days after 

12 the filing of a notice of intent under this 

13 section’’ and inserting ‘‘30 days after the 

14 first date set for the meeting of creditors 

15 under section 341(a)’’; and 

16 (ii) by striking ‘‘forty-five day’’ and 

17 inserting ‘‘30-day’’; 

18 (C) in subsection (a)(2)(C) by inserting ‘‘, 

19 except as provided in section 362(h)’’ before the 

20 semicolon; and 

21 (D) by adding at the end the following: 

22 ‘‘(d) If the debtor fails timely to take the action speci23 fied in subsection (a)(6) of this section, or in paragraphs 

24 (1) and (2) of section 362(h), with respect to property 

25 which a lessor or bailor owns and has leased, rented, or 
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1 bailed to the debtor or as to which a creditor holds a secu2 rity interest not otherwise voidable under section 522(f), 

3 544, 545, 547, 548, or 549, nothing in this title shall pre4 vent or limit the operation of a provision in the underlying 

5 lease or agreement that has the effect of placing the debt6 or in default under such lease or agreement by reason of 

7 the occurrence, pendency, or existence of a proceeding 

8 under this title or the insolvency of the debtor. Nothing 

9 in this subsection shall be deemed to justify limiting such 

10 a provision in any other circumstance.’’. 

11 SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT 

12 IN CHAPTER 13. 

13 (a) IN GENERAL.—Section 1325(a)(5)(B)(i) of title 

14 11, United States Code, is amended to read as follows: 

15 ‘‘(i) the plan provides that— 

16 ‘‘(I) the holder of such claim retain 

17 the lien securing such claim until the ear18 lier of— 

19 ‘‘(aa) the payment of the under20 lying debt determined under nonbank21 ruptcy law; or 

22 ‘‘(bb) discharge under section 

23 1328; and 

24 ‘‘(II) if the case under this chapter is 

25 dismissed or converted without completion 
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1 of the plan, such lien shall also be retained 

2 by such holder to the extent recognized by 

3 applicable nonbankruptcy law; and’’. 

4 (b) RESTORING THE FOUNDATION FOR SECURED

5 CREDIT.—Section 1325(a) of title 11, United States Code, 

6 is amended by adding at the end the following: 

7 ‘‘For purposes of paragraph (5), section 506 shall not 

8 apply to a claim described in that paragraph if the creditor 

9 has a purchase money security interest securing the debt 

10 that is the subject of the claim, the debt was incurred 

11 within the 910-day preceding the date of the filing of the 

12 petition, and the collateral for that debt consists of a 

13 motor vehicle (as defined in section 30102 of title 49) ac14 quired for the personal use of the debtor, or if collateral 

15 for that debt consists of any other thing of value, if the 

16 debt was incurred during the 1-year period preceding that 

17 filing.’’. 

18 (c) DEFINITIONS.—Section 101 of title 11, United 

19 States Code, is amended— 

20 (1) by inserting after paragraph (13) the fol21 lowing: 

22 ‘‘(13A) ‘debtor’s principal residence’— 

23 ‘‘(A) means a residential structure, includ24 ing incidental property, without regard to 
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1 whether that structure is attached to real prop2 erty; and 

3 ‘‘(B) includes an individual condominium 

4 or cooperative unit, a mobile or manufactured 

5 home, or trailer;’’; and 

6 (2) by inserting after paragraph (27), the fol7 lowing: 

8 ‘‘(27A) ‘incidental property’ means, with re9 spect to a debtor’s principal residence— 

10 ‘‘(A) property commonly conveyed with a 

11 principal residence in the area where the real 

12 property is located; 

13 ‘‘(B) all easements, rights, appurtenances, 

14 fixtures, rents, royalties, mineral rights, oil or 

15 gas rights or profits, water rights, escrow 

16 funds, or insurance proceeds; and 

17 ‘‘(C) all replacements or additions;’’. 

18 SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS. 

19 Section 522(b)(3) of title 11, United States Code, as 

20 so designated by section 106, is amended— 

21 (1) in subparagraph (A)— 

22 (A) by striking ‘‘180 days’’ and inserting 

23 ‘‘730 days’’; and 

24 (B) by striking ‘‘, or for a longer portion 

25 of such 180-day period than in any other place’’ 
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1 and inserting ‘‘or if the debtor’s domicile has 

2 not been located at a single State for such 730- 

3 day period, the place in which the debtor’s 

4 domicile was located for 180 days immediately 

5 preceding the 730-day period or for a longer 

6 portion of such 180-day period than in any 

7 other place’’; and 

8 (2) by adding at the end the following: 

9 ‘‘If the effect of the domiciliary requirement under sub10 paragraph (A) is to render the debtor ineligible for any 

11 exemption, the debtor may elect to exempt property that 

12 is specified under subsection (d).’’. 

13 SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR 

14 FRAUD. 

15 Section 522 of title 11, United States Code, as 

16 amended by section 224, is amended— 

17 (1) in subsection (b)(3)(A), as so designated by 

18 this Act, by inserting ‘‘subject to subsections (o) and 

19 (p),’’ before ‘‘any property’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(o) For purposes of subsection (b)(3)(A), and not22 withstanding subsection (a), the value of an interest in— 

23 ‘‘(1) real or personal property that the debtor 

24 or a dependent of the debtor uses as a residence; 
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1 ‘‘(2) a cooperative that owns property that the 

2 debtor or a dependent of the debtor uses as a resi3 dence; 

4 ‘‘(3) a burial plot for the debtor or a dependent 

5 of the debtor; or 

6 ‘‘(4) real or personal property that the debtor 

7 or a dependent of the debtor claims as a homestead; 

8 shall be reduced to the extent that such value is attrib9 utable to any portion of any property that the debtor dis10 posed of in the 10-year period ending on the date of the 

11 filing of the petition with the intent to hinder, delay, or 

12 defraud a creditor and that the debtor could not exempt, 

13 or that portion that the debtor could not exempt, under 

14 subsection (b), if on such date the debtor had held the 

15 property so disposed of.’’. 

16 SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 

17 13 CASES. 

18 (a) STOPPING ABUSIVE CONVERSIONS FROM CHAP19 TER 13.—Section 348(f)(1) of title 11, United States 

20 Code, is amended— 

21 (1) in subparagraph (A), by striking ‘‘and’’ at 

22 the end; 

23 (2) in subparagraph (B)— 

24 (A) by striking ‘‘in the converted case, 

25 with allowed secured claims’’ and inserting 
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1 ‘‘only in a case converted to a case under chap2 ter 11 or 12, but not in a case converted to a 

3 case under chapter 7, with allowed secured 

4 claims in cases under chapters 11 and 12’’; and 

5 (B) by striking the period and inserting ‘‘; 

6 and’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(C) with respect to cases converted from chap9 ter 13— 

10 ‘‘(i) the claim of any creditor holding secu11 rity as of the date of the petition shall continue 

12 to be secured by that security unless the full 

13 amount of such claim determined under appli14 cable nonbankruptcy law has been paid in full 

15 as of the date of conversion, notwithstanding 

16 any valuation or determination of the amount 

17 of an allowed secured claim made for the pur18 poses of the case under chapter 13; and 

19 ‘‘(ii) unless a prebankruptcy default has 

20 been fully cured under the plan at the time of 

21 conversion, in any proceeding under this title or 

22 otherwise, the default shall have the effect given 

23 under applicable nonbankruptcy law.’’. 

24 (b) GIVING DEBTORS THE ABILITY TO KEEP

25 LEASED PERSONAL PROPERTY BY ASSUMPTION.—Section 
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1 365 of title 11, United States Code, is amended by adding 

2 at the end the following: 

3 ‘‘(p)(1) If a lease of personal property is rejected or 

4 not timely assumed by the trustee under subsection (d), 

5 the leased property is no longer property of the estate and 

6 the stay under section 362(a) is automatically terminated. 

7 ‘‘(2)(A) If the debtor in a case under chapter 7 is 

8 an individual, the debtor may notify the creditor in writing 

9 that the debtor desires to assume the lease. Upon being 

10 so notified, the creditor may, at its option, notify the debt11 or that it is willing to have the lease assumed by the debt12 or and may condition such assumption on cure of any out13 standing default on terms set by the contract. 

14 ‘‘(B) If, not later than 30 days after notice is pro15 vided under subparagraph (A), the debtor notifies the les16 sor in writing that the lease is assumed, the liability under 

17 the lease will be assumed by the debtor and not by the 

18 estate. 

19 ‘‘(C) The stay under section 362 and the injunction 

20 under section 524(a)(2) shall not be violated by notifica21 tion of the debtor and negotiation of cure under this sub22 section. 

23 ‘‘(3) In a case under chapter 11 in which the debtor 

24 is an individual and in a case under chapter 13, if the 

25 debtor is the lessee with respect to personal property and 
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1 the lease is not assumed in the plan confirmed by the 

2 court, the lease is deemed rejected as of the conclusion 

3 of the hearing on confirmation. If the lease is rejected, 

4 the stay under section 362 and any stay under section 

5 1301 is automatically terminated with respect to the prop6 erty subject to the lease.’’. 

7 (c) ADEQUATE PROTECTION OF LESSORS AND PUR8 CHASE MONEY SECURED CREDITORS.— 

9 (1) CONFIRMATION OF PLAN.—Section 

10 1325(a)(5)(B) of title 11, United States Code, as 

11 amended by section 306, is amended— 

12 (A) in clause (i), by striking ‘‘and’’ at the 

13 end; 

14 (B) in clause (ii), by striking ‘‘or’’ at the 

15 end and inserting ‘‘and’’; and 

16 (C) by adding at the end the following: 

17 ‘‘(iii) if— 

18 ‘‘(I) property to be distributed pursu19 ant to this subsection is in the form of 

20 periodic payments, such payments shall be 

21 in equal monthly amounts; and 

22 ‘‘(II) the holder of the claim is se23 cured by personal property, the amount of 

24 such payments shall not be less than an 

25 amount sufficient to provide to the holder 
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1 of such claim adequate protection during 

2 the period of the plan; or’’. 

3 (2) PAYMENTS.—Section 1326(a) of title 11, 

4 United States Code, is amended to read as follows: 

5 ‘‘(a)(1) Unless the court orders otherwise, the debtor 

6 shall commence making payments not later than 30 days 

7 after the date of the filing of the plan or the order for 

8 relief, whichever is earlier, in the amount— 

9 ‘‘(A) proposed by the plan to the trustee; 

10 ‘‘(B) scheduled in a lease of personal property 

11 directly to the lessor for that portion of the obliga12 tion that becomes due after the order for relief, re13 ducing the payments under subparagraph (A) by the 

14 amount so paid and providing the trustee with evi15 dence of such payment, including the amount and 

16 date of payment; and 

17 ‘‘(C) that provides adequate protection directly 

18 to a creditor holding an allowed claim secured by 

19 personal property to the extent the claim is attrib20 utable to the purchase of such property by the debt21 or for that portion of the obligation that becomes 

22 due after the order for relief, reducing the payments 

23 under subparagraph (A) by the amount so paid and 

24 providing the trustee with evidence of such payment, 

25 including the amount and date of payment. 
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1 ‘‘(2) A payment made under paragraph (1)(A) shall 

2 be retained by the trustee until confirmation or denial of 

3 confirmation. If a plan is confirmed, the trustee shall dis4 tribute any such payment in accordance with the plan as 

5 soon as is practicable. If a plan is not confirmed, the trust6 ee shall return any such payments not previously paid and 

7 not yet due and owing to creditors pursuant to paragraph 

8 (3) to the debtor, after deducting any unpaid claim al9 lowed under section 503(b). 

10 ‘‘(3) Subject to section 363, the court may, upon no11 tice and a hearing, modify, increase, or reduce the pay12 ments required under this subsection pending confirma13 tion of a plan. 

14 ‘‘(4) Not later than 60 days after the date of filing 

15 of a case under this chapter, a debtor retaining possession 

16 of personal property subject to a lease or securing a claim 

17 attributable in whole or in part to the purchase price of 

18 such property shall provide the lessor or secured creditor 

19 reasonable evidence of the maintenance of any required 

20 insurance coverage with respect to the use or ownership 

21 of such property and continue to do so for so long as the 

22 debtor retains possession of such property.’’. 

23 SEC. 310. LIMITATION ON LUXURY GOODS. 

24 Section 523(a)(2)(C) of title 11, United States Code, 

25 is amended to read as follows: 
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1 ‘‘(C)(i) for purposes of subparagraph 

2 (A)— 

3 ‘‘(I) consumer debts owed to a single 

4 creditor and aggregating more than $500 

5 for luxury goods or services incurred by an 

6 individual debtor on or within 90 days be7 fore the order for relief under this title are 

8 presumed to be nondischargeable; and 

9 ‘‘(II) cash advances aggregating more 

10 than $750 that are extensions of consumer 

11 credit under an open end credit plan ob12 tained by an individual debtor on or within 

13 70 days before the order for relief under 

14 this title, are presumed to be non15 dischargeable; and 

16 ‘‘(ii) for purposes of this subparagraph— 

17 ‘‘(I) the terms ‘consumer’, ‘credit’, 

18 and ‘open end credit plan’ have the same 

19 meanings as in section 103 of the Truth in 

20 Lending Act; and 

21 ‘‘(II) the term ‘luxury goods or serv22 ices’ does not include goods or services rea23 sonably necessary for the support or main24 tenance of the debtor or a dependent of the 

25 debtor.’’. 
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1 SEC. 311. AUTOMATIC STAY. 

2 (a) IN GENERAL.—Section 362(b) of title 11, United 

3 States Code, as amended by sections 224 and 303, is 

4 amended by inserting after paragraph (21), the following: 

5 ‘‘(22) subject to subsection (l), under subsection 

6 (a)(3), of the continuation of any eviction, unlawful 

7 detainer action, or similar proceeding by a lessor 

8 against a debtor involving residential property in 

9 which the debtor resides as a tenant under a lease 

10 or rental agreement and with respect to which the 

11 lessor has obtained before the date of the filing of 

12 the bankruptcy petition, a judgment for possession 

13 of such property against the debtor; 

14 ‘‘(23) subject to subsection (m), under sub15 section (a)(3), of an eviction action that seeks pos16 session of the residential property in which the debt17 or resides as a tenant under a lease or rental agree18 ment based on endangerment of such property or 

19 the illegal use of controlled substances on such prop20 erty, but only if the lessor files with the court, and 

21 serves upon the debtor, a certification under penalty 

22 of perjury that such an eviction action has been 

23 filed, or that the debtor, during the 30-day period 

24 preceding the date of the filing of the certification, 

25 has endangered property or illegally used or allowed 

26 to be used a controlled substance on the property; 
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1 ‘‘(24) under subsection (a), of any transfer that 

2 is not avoidable under section 544 and that is not 

3 avoidable under section 549;’’. 

4 (b) LIMITATIONS.—Section 362 of title 11, United 

5 States Code, as amended by sections 106 and 305, is 

6 amended by adding at the end the following: 

7 ‘‘(l)(1) Except as otherwise provided in this sub8 section, subsection (b)(22) shall apply on the date that 

9 is 30 days after the date on which the bankruptcy petition 

10 is filed, if the debtor files with the petition and serves upon 

11 the lessor a certification under penalty of perjury that— 

12 ‘‘(A) under nonbankruptcy law applicable in the 

13 jurisdiction, there are circumstances under which the 

14 debtor would be permitted to cure the entire mone15 tary default that gave rise to the judgment for pos16 session, after that judgment for possession was en17 tered; and 

18 ‘‘(B) the debtor (or an adult dependent of the 

19 debtor) has deposited with the clerk of the court, 

20 any rent that would become due during the 30-day 

21 period after the filing of the bankruptcy petition. 

22 ‘‘(2) If, within the 30-day period after the filing of 

23 the bankruptcy petition, the debtor (or an adult dependent 

24 of the debtor) complies with paragraph (1) and files with 

25 the court and serves upon the lessor a further certification 
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1 under penalty of perjury that the debtor (or an adult de2 pendent of the debtor) has cured, under nonbankrupcty 

3 law applicable in the jurisdiction, the entire monetary de4 fault that gave rise to the judgment under which posses5 sion is sought by the lessor, subsection (b)(22) shall not 

6 apply, unless ordered to apply by the court under para7 graph (3). 

8 ‘‘(3)(A) If the lessor files an objection to any certifi9 cation filed by the debtor under paragraph (1) or (2), and 

10 serves such objection upon the debtor, the court shall hold 

11 a hearing within 10 days after the filing and service of 

12 such objection to determine if the certification filed by the 

13 debtor under paragraph (1) or (2) is true. 

14 ‘‘(B) If the court upholds the objection of the lessor 

15 filed under subparagraph (A)— 

16 ‘‘(i) subsection (b)(22) shall apply immediately 

17 and relief from the stay provided under subsection 

18 (a)(3) shall not be required to enable the lessor to 

19 complete the process to recover full possession of the 

20 property; and 

21 ‘‘(ii) the clerk of the court shall immediately 

22 serve upon the lessor and the debtor a certified copy 

23 of the court’s order upholding the lessor’s objection. 

24 ‘‘(4) If a debtor, in accordance with paragraph (5), 

25 indicates on the petition that there was a judgment for 
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1 possession of the residential rental property in which the 

2 debtor resides and does not file a certification under para3 graph (1) or (2)— 

4 ‘‘(A) subsection (b)(22) shall apply immediately 

5 upon failure to file such certification, and relief from 

6 the stay provided under subsection (a)(3) shall not 

7 be required to enable the lessor to complete the 

8 process to recover full possession of the property; 

9 and 

10 ‘‘(B) the clerk of the court shall immediately 

11 serve upon the lessor and the debtor a certified copy 

12 of the docket indicating the absence of a filed certifi13 cation and the applicability of the exception to the 

14 stay under subsection (b)(22). 

15 ‘‘(5)(A) Where a judgment for possession of residen16 tial property in which the debtor resides as a tenant under 

17 a lease or rental agreement has been obtained by the les18 sor, the debtor shall so indicate on the bankruptcy petition 

19 and shall provide the name and address of the lessor that 

20 obtained that pre-petition judgment on the petition and 

21 on any certification filed under this subsection. 

22 ‘‘(B) The form of certification filed with the petition, 

23 as specified in this subsection, shall provide for the debtor 

24 to certify, and the debtor shall certify— 
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1 ‘‘(i) whether a judgment for possession of resi2 dential rental housing in which the debtor resides 

3 has been obtained against the debtor before the date 

4 of the filing of the petition; and 

5 ‘‘(ii) whether the debtor is claiming under para6 graph (1) that under nonbankruptcy law applicable 

7 in the jurisdiction, there are circumstances under 

8 which the debtor would be permitted to cure the en9 tire monetary default that gave rise to the judgment 

10 for possession, after that judgment of possession was 

11 entered, and has made the appropriate deposit with 

12 the court. 

13 ‘‘(C) The standard forms (electronic and otherwise) 

14 used in a bankruptcy proceeding shall be amended to re15 flect the requirements of this subsection. 

16 ‘‘(D) The clerk of the court shall arrange for the 

17 prompt transmittal of the rent deposited in accordance 

18 with paragraph (1)(B) to the lessor. 

19 ‘‘(m)(1) Except as otherwise provided in this sub20 section, subsection (b)(23) shall apply on the date that 

21 is 15 days after the date on which the lessor files and 

22 serves a certification described in subsection (b)(23). 

23 ‘‘(2)(A) If the debtor files with the court an objection 

24 to the truth or legal sufficiency of the certification de25 scribed in subsection (b)(23) and serves such objection 
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1 upon the lessor, subsection (b)(23) shall not apply, unless 

2 ordered to apply by the court under this subsection. 

3 ‘‘(B) If the debtor files and serves the objection under 

4 subparagraph (A), the court shall hold a hearing within 

5 10 days after the filing and service of such objection to 

6 determine if the situation giving rise to the lessor’s certifi7 cation under paragraph (1) existed or has been remedied. 

8 ‘‘(C) If the debtor can demonstrate to the satisfaction 

9 of the court that the situation giving rise to the lessor’s 

10 certification under paragraph (1) did not exist or has been 

11 remedied, the stay provided under subsection (a)(3) shall 

12 remain in effect until the termination of the stay under 

13 this section. 

14 ‘‘(D) If the debtor cannot demonstrate to the satis15 faction of the court that the situation giving rise to the 

16 lessor’s certification under paragraph (1) did not exist or 

17 has been remedied— 

18 ‘‘(i) relief from the stay provided under sub19 section (a)(3) shall not be required to enable the les20 sor to proceed with the eviction; and 

21 ‘‘(ii) the clerk of the court shall immediately 

22 serve upon the lessor and the debtor a certified copy 

23 of the court’s order upholding the lessor’s certifi24 cation. 
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1 ‘‘(3) If the debtor fails to file, within 15 days, an 

2 objection under paragraph (2)(A)— 

3 ‘‘(A) subsection (b)(23) shall apply immediately 

4 upon such failure and relief from the stay provided 

5 under subsection (a)(3) shall not be required to en6 able the lessor to complete the process to recover full 

7 possession of the property; and 

8 ‘‘(B) the clerk of the court shall immediately 

9 serve upon the lessor and the debtor a certified copy 

10 of the docket indicating such failure.’’. 

11 SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY 

12 DISCHARGES. 

13 Title 11, United States Code, is amended— 

14 (1) in section 727(a)(8), by striking ‘‘six’’ and 

15 inserting ‘‘8’’; and 

16 (2) in section 1328, by inserting after sub17 section (e) the following: 

18 ‘‘(f) Notwithstanding subsections (a) and (b), the 

19 court shall not grant a discharge of all debts provided for 

20 in the plan or disallowed under section 502, if the debtor 

21 has received a discharge— 

22 ‘‘(1) in a case filed under chapter 7, 11, or 12 

23 of this title during the 4-year period preceding the 

24 date of the order for relief under this chapter, or 
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1 ‘‘(2) in a case filed under chapter 13 of this 

2 title during the 2-year period preceding the date of 

3 such order.’’. 

4 SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND AN5 TIQUES. 

6 (a) DEFINITION.—Section 522(f) of title 11, United 

7 States Code, is amended by adding at the end the fol8 lowing: 

9 ‘‘(4)(A) Subject to subparagraph (B), for purposes 

10 of paragraph (1)(B), the term ‘household goods’ means— 

11 ‘‘(i) clothing; 

12 ‘‘(ii) furniture; 

13 ‘‘(iii) appliances; 

14 ‘‘(iv) 1 radio; 

15 ‘‘(v) 1 television; 

16 ‘‘(vi) 1 VCR; 

17 ‘‘(vii) linens; 

18 ‘‘(viii) china; 

19 ‘‘(ix) crockery; 

20 ‘‘(x) kitchenware; 

21 ‘‘(xi) educational materials and educational 

22 equipment primarily for the use of minor dependent 

23 children of the debtor; 

24 (xii) medical equipment and supplies; 
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1 ‘‘(xiii) furniture exclusively for the use of minor 

2 children, or elderly or disabled dependents of the 

3 debtor; 

4 ‘‘(xiv) personal effects (including the toys and 

5 hobby equipment of minor dependent children and 

6 wedding rings) of the debtor and the dependents of 

7 the debtor; and 

8 ‘‘(xv) 1 personal computer and related equip9 ment. 

10 ‘‘(B) The term ‘household goods’ does not include— 

11 ‘‘(i) works of art (unless by or of the debtor, or 

12 any relative of the debtor); 

13 ‘‘(ii) electronic entertainment equipment with a 

14 fair market value of more than $500 in the aggre15 gate (except 1 television, 1 radio, and 1 VCR); 

16 ‘‘(iii) items acquired as antiques with a fair 

17 market value of more than $500 in the aggregate; 

18 ‘‘(iv) jewelry with a fair market value of more 

19 than $500 in the aggregate (except wedding rings); 

20 and 

21 ‘‘(v) a computer (except as otherwise provided 

22 for in this section), motor vehicle (including a trac23 tor or lawn tractor), boat, or a motorized rec24 reational device, conveyance, vehicle, watercraft, or 

25 aircraft.’’. 
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1 (b) STUDY.—Not later than 2 years after the date 

2 of enactment of this Act, the Director of the Executive 

3 Office for United States Trustees shall submit a report 

4 to the Committee on the Judiciary of the Senate and the 

5 Committee on the Judiciary of the House of Representa6 tives containing its findings regarding utilization of the 

7 definition of household goods, as defined in section 

8 522(f)(4) of title 11, United States Code, as added by sub9 section (a), with respect to the avoidance of nonpossessory, 

10 nonpurchase money security interests in household goods 

11 under section 522(f)(1)(B) of title 11, United States Code, 

12 and the impact such section 522(f)(4) has had on debtors 

13 and on the bankruptcy courts. Such report may include 

14 recommendations for amendments to such section 

15 522(f)(4) consistent with the Director’s findings. 

16 SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE 

17 DEBTS. 

18 (a) IN GENERAL.—Section 523(a) of title 11, United 

19 States Code, is amended by inserting after paragraph (14) 

20 the following: 

21 ‘‘(14A) incurred to pay a tax to a governmental 

22 unit, other than the United States, that would be 

23 nondischargeable under paragraph (1);’’. 

24 (b) DISCHARGE UNDER CHAPTER 13.—Section 

25 1328(a) of title 11, United States Code, is amended by 
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1 striking paragraphs (1) through (3) and inserting the fol2 lowing: 

3 ‘‘(1) provided for under section 1322(b)(5); 

4 ‘‘(2) of the kind specified in paragraph (2), (3), 

5 (4), (5), (8), or (9) of section 523(a); 

6 ‘‘(3) for restitution, or a criminal fine, included 

7 in a sentence on the debtor’s conviction of a crime; 

8 or 

9 ‘‘(4) for restitution, or damages, awarded in a 

10 civil action against the debtor as a result of willful 

11 or malicious injury by the debtor that caused per12 sonal injury to an individual or the death of an indi13 vidual.’’. 

14 SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 

15 AND 13 CASES. 

16 (a) NOTICE.—Section 342 of title 11, United States 

17 Code, as amended by section 102, is amended— 

18 (1) in subsection (c)— 

19 (A) by inserting ‘‘(1)’’ after ‘‘(c)’’; 

20 (B) by striking ‘‘, but the failure of such 

21 notice to contain such information shall not in22 validate the legal effect of such notice’’; and 

23 (C) by adding at the end the following: 

24 ‘‘(2)(A) If, within the 90 days before the commence25 ment of a voluntary case, a creditor supplies the debtor 
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1 in at least 2 communications sent to the debtor with the 

2 current account number of the debtor and the address at 

3 which such creditor requests to receive correspondence, 

4 then any notice required by this title to be sent by the 

5 debtor to such creditor shall be sent to such address and 

6 shall include such account number. 

7 ‘‘(B) If a creditor would be in violation of applicable 

8 nonbankruptcy law by sending any such communication 

9 within such 90-day period and if such creditor supplies 

10 the debtor in the last 2 communications with the current 

11 account number of the debtor and the address at which 

12 such creditor requests to receive correspondence, then any 

13 notice required by this title to be sent by the debtor to 

14 such creditor shall be sent to such address and shall in15 clude such account number.’’; and 

16 (2) by adding at the end the following: 

17 ‘‘(e)(1) In a case under chapter 7 or 13 of this title 

18 of a debtor who is an individual, a creditor at any time 

19 may both file with the court and serve on the debtor a 

20 notice of address to be used to provide notice in such case 

21 to such creditor. 

22 ‘‘(2) Any notice in such case required to be provided 

23 to such creditor by the debtor or the court later than 5 

24 days after the court and the debtor receive such creditor’s 

25 notice of address, shall be provided to such address. 
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1 ‘‘(f)(1) An entity may file with any bankruptcy court 

2 a notice of address to be used by all the bankruptcy courts 

3 or by particular bankruptcy courts, as so specified by such 

4 entity at the time such notice is filed, to provide notice 

5 to such entity in all cases under chapters 7 and 13 pend6 ing in the courts with respect to which such notice is filed, 

7 in which such entity is a creditor. 

8 ‘‘(2) In any case filed under chapter 7 or 13, any 

9 notice required to be provided by a court with respect to 

10 which a notice is filed under paragraph (1), to such entity 

11 later than 30 days after the filing of such notice under 

12 paragraph (1) shall be provided to such address unless 

13 with respect to a particular case a different address is 

14 specified in a notice filed and served in accordance with 

15 subsection (e). 

16 ‘‘(3) A notice filed under paragraph (1) may be with17 drawn by such entity. 

18 ‘‘(g)(1) Notice provided to a creditor by the debtor 

19 or the court other than in accordance with this section 

20 (excluding this subsection) shall not be effective notice 

21 until such notice is brought to the attention of such cred22 itor. If such creditor designates a person or an organiza23 tional subdivision of such creditor to be responsible for 

24 receiving notices under this title and establishes reason25 able procedures so that such notices receivable by such 
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1 creditor are to be delivered to such person or such subdivi2 sion, then a notice provided to such creditor other than 

3 in accordance with this section (excluding this subsection) 

4 shall not be considered to have been brought to the atten5 tion of such creditor until such notice is received by such 

6 person or such subdivision. 

7 ‘‘(2) A monetary penalty may not be imposed on a 

8 creditor for a violation of a stay in effect under section 

9 362(a) (including a monetary penalty imposed under sec10 tion 362(k)) or for failure to comply with section 542 or 

11 543 unless the conduct that is the basis of such violation 

12 or of such failure occurs after such creditor receives notice 

13 effective under this section of the order for relief.’’. 

14 (b) DEBTOR’S DUTIES.—Section 521 of title 11, 

15 United States Code, as amended by sections 106, 225, and 

16 305, is amended— 

17 (1) in subsection (a), as so designated by sec18 tion 106, by amending paragraph (1) to read as fol19 lows: 

20 ‘‘(1) file— 

21 ‘‘(A) a list of creditors; and 

22 ‘‘(B) unless the court orders otherwise— 

23 ‘‘(i) a schedule of assets and liabil24 ities; 
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1 ‘‘(ii) a schedule of current income and 

2 current expenditures; 

3 ‘‘(iii) a statement of the debtor’s fi4 nancial affairs and, if section 342(b) ap5 plies, a certificate— 

6 ‘‘(I) of an attorney whose name 

7 is indicated on the petition as the at8 torney for the debtor, or a bankruptcy 

9 petition preparer signing the petition 

10 under section 110(b)(1), indicating 

11 that such attorney or the bankruptcy 

12 petition preparer delivered to the 

13 debtor the notice required by section 

14 342(b); or 

15 ‘‘(II) if no attorney is so indi16 cated, and no bankruptcy petition pre17 parer signed the petition, of the debt18 or that such notice was received and 

19 read by the debtor; 

20 ‘‘(iv) copies of all payment advices or 

21 other evidence of payment received within 

22 60 days before the date of the filing of the 

23 petition, by the debtor from any employer 

24 of the debtor; 
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1 ‘‘(v) a statement of the amount of 

2 monthly net income, itemized to show how 

3 the amount is calculated; and 

4 ‘‘(vi) a statement disclosing any rea5 sonably anticipated increase in income or 

6 expenditures over the 12-month period fol7 lowing the date of the filing of the peti8 tion;’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(e)(1) If the debtor in a case under chapter 7 or 

11 13 is an individual and if a creditor files with the court 

12 at any time a request to receive a copy of the petition, 

13 schedules, and statement of financial affairs filed by the 

14 debtor, then the court shall make such petition, such 

15 schedules, and such statement available to such creditor. 

16 ‘‘(2)(A) The debtor shall provide— 

17 ‘‘(i) not later than 7 days before the date first 

18 set for the first meeting of creditors, to the trustee 

19 a copy of the Federal income tax return required 

20 under applicable law (or at the election of the debt21 or, a transcript of such return) for the most recent 

22 tax year ending immediately before the commence23 ment of the case and for which a Federal income tax 

24 return was filed; and 
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1 ‘‘(ii) at the same time the debtor complies with 

2 clause (i), a copy of such return (or if elected under 

3 clause (i), such transcript) to any creditor that time4 ly requests such copy. 

5 ‘‘(B) If the debtor fails to comply with clause (i) or 

6 (ii) of subparagraph (A), the court shall dismiss the case 

7 unless the debtor demonstrates that the failure to so com8 ply is due to circumstances beyond the control of the debt9 or. 

10 ‘‘(C) If a creditor requests a copy of such tax return 

11 or such transcript and if the debtor fails to provide a copy 

12 of such tax return or such transcript to such creditor at 

13 the time the debtor provides such tax return or such tran14 script to the trustee, then the court shall dismiss the case 

15 unless the debtor demonstrates that the failure to provide 

16 a copy of such tax return or such transcript is due to cir17 cumstances beyond the control of the debtor. 

18 ‘‘(3) If a creditor in a case under chapter 13 files 

19 with the court at any time a request to receive a copy 

20 of the plan filed by the debtor, then the court shall make 

21 available to such creditor a copy of the plan— 

22 ‘‘(A) at a reasonable cost; and 

23 ‘‘(B) not later than 5 days after such request 

24 is filed. 
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1 ‘‘(f) At the request of the court, the United States 

2 trustee, or any party in interest in a case under chapter 

3 7, 11, or 13, a debtor who is an individual shall file with 

4 the court— 

5 ‘‘(1) at the same time filed with the taxing au6 thority, a copy of each Federal income tax return re7 quired under applicable law (or at the election of the 

8 debtor, a transcript of such tax return) with respect 

9 to each tax year of the debtor ending while the case 

10 is pending under such chapter; 

11 ‘‘(2) at the same time filed with the taxing au12 thority, each Federal income tax return required 

13 under applicable law (or at the election of the debt14 or, a transcript of such tax return) that had not 

15 been filed with such authority as of the date of the 

16 commencement of the case and that was subse17 quently filed for any tax year of the debtor ending 

18 in the 3-year period ending on the date of the com19 mencement of the case; 

20 ‘‘(3) a copy of each amendment to any Federal 

21 income tax return or transcript filed with the court 

22 under paragraph (1) or (2); and 

23 ‘‘(4) in a case under chapter 13— 

24 ‘‘(A) on the date that is either 90 days 

25 after the end of such tax year or 1 year after 
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1 the date of the commencement of the case, 

2 whichever is later, if a plan is not confirmed be3 fore such later date; and 

4 ‘‘(B) annually after the plan is confirmed 

5 and until the case is closed, not later than the 

6 date that is 45 days before the anniversary of 

7 the confirmation of the plan; 

8 a statement, under penalty of perjury, of the income 

9 and expenditures of the debtor during the tax year 

10 of the debtor most recently concluded before such 

11 statement is filed under this paragraph, and of the 

12 monthly income of the debtor, that shows how in13 come, expenditures, and monthly income are cal14 culated. 

15 ‘‘(g)(1) A statement referred to in subsection (f)(4) 

16 shall disclose— 

17 ‘‘(A) the amount and sources of the income of 

18 the debtor; 

19 ‘‘(B) the identity of any person responsible with 

20 the debtor for the support of any dependent of the 

21 debtor; and 

22 ‘‘(C) the identity of any person who contrib23 uted, and the amount contributed, to the household 

24 in which the debtor resides. 
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1 ‘‘(2) The tax returns, amendments, and statement of 

2 income and expenditures described in subsections 

3 (e)(2)(A) and (f) shall be available to the United States 

4 trustee (or the bankruptcy administrator, if any), the 

5 trustee, and any party in interest for inspection and copy6 ing, subject to the requirements of section 315(c) of the 

7 Bankruptcy Abuse Prevention and Consumer Protection 

8 Act of 2005. 

9 ‘‘(h) If requested by the United States trustee or by 

10 the trustee, the debtor shall provide— 

11 ‘‘(1) a document that establishes the identity of 

12 the debtor, including a driver’s license, passport, or 

13 other document that contains a photograph of the 

14 debtor; or 

15 ‘‘(2) such other personal identifying information 

16 relating to the debtor that establishes the identity of 

17 the debtor.’’. 

18 (c)(1) Not later than 180 days after the date of the 

19 enactment of this Act, the Director of the Administrative 

20 Office of the United States Courts shall establish proce21 dures for safeguarding the confidentiality of any tax infor22 mation required to be provided under this section. 

23 (2) The procedures under paragraph (1) shall include 

24 restrictions on creditor access to tax information that is 

25 required to be provided under this section. 
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1 (3) Not later than 540 days after the date of enact2 ment of this Act, the Director of the Administrative Office 

3 of the United States Courts shall prepare and submit to 

4 the President pro tempore of the Senate and the Speaker 

5 of the House of Representatives a report that— 

6 (A) assesses the effectiveness of the procedures 

7 established under paragraph (1); and 

8 (B) if appropriate, includes proposed legislation 

9 to— 

10 (i) further protect the confidentiality of tax 

11 information; and 

12 (ii) provide penalties for the improper use 

13 by any person of the tax information required 

14 to be provided under this section. 

15 SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED16 ULES OR PROVIDE REQUIRED INFORMATION. 

17 Section 521 of title 11, United States Code, as 

18 amended by sections 106, 225, 305, and 315, is amended 

19 by adding at the end the following: 

20 ‘‘(i)(1) Subject to paragraphs (2) and (4) and not21 withstanding section 707(a), if an individual debtor in a 

22 voluntary case under chapter 7 or 13 fails to file all of 

23 the information required under subsection (a)(1) within 

24 45 days after the date of the filing of the petition, the 
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1 case shall be automatically dismissed effective on the 46th 

2 day after the date of the filing of the petition. 

3 ‘‘(2) Subject to paragraph (4) and with respect to 

4 a case described in paragraph (1), any party in interest 

5 may request the court to enter an order dismissing the 

6 case. If requested, the court shall enter an order of dis7 missal not later than 5 days after such request. 

8 ‘‘(3) Subject to paragraph (4) and upon request of 

9 the debtor made within 45 days after the date of the filing 

10 of the petition described in paragraph (1), the court may 

11 allow the debtor an additional period of not to exceed 45 

12 days to file the information required under subsection 

13 (a)(1) if the court finds justification for extending the pe14 riod for the filing. 

15 ‘‘(4) Notwithstanding any other provision of this sub16 section, on the motion of the trustee filed before the expi17 ration of the applicable period of time specified in para18 graph (1), (2), or (3), and after notice and a hearing, the 

19 court may decline to dismiss the case if the court finds 

20 that the debtor attempted in good faith to file all the infor21 mation required by subsection (a)(1)(B)(iv) and that the 

22 best interests of creditors would be served by administra23 tion of the case.’’. 
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1 SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON 

2 CONFIRMATION OF THE PLAN. 

3 Section 1324 of title 11, United States Code, is 

4 amended— 

5 (1) by striking ‘‘After’’ and inserting the fol6 lowing: 

7 ‘‘(a) Except as provided in subsection (b) and after’’; 

8 and 

9 (2) by adding at the end the following: 

10 ‘‘(b) The hearing on confirmation of the plan may 

11 be held not earlier than 20 days and not later than 45 

12 days after the date of the meeting of creditors under sec13 tion 341(a), unless the court determines that it would be 

14 in the best interests of the creditors and the estate to hold 

15 such hearing at an earlier date and there is no objection 

16 to such earlier date.’’. 

17 SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION 

18 IN CERTAIN CASES. 

19 Title 11, United States Code, is amended— 

20 (1) by amending section 1322(d) to read as fol21 lows: 

22 ‘‘(d)(1) If the current monthly income of the debtor 

23 and the debtor’s spouse combined, when multiplied by 12, 

24 is not less than— 
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1 ‘‘(A) in the case of a debtor in a household of 

2 1 person, the median family income of the applicable 

3 State for 1 earner; 

4 ‘‘(B) in the case of a debtor in a household of 

5 2, 3, or 4 individuals, the highest median family in6 come of the applicable State for a family of the same 

7 number or fewer individuals; or 

8 ‘‘(C) in the case of a debtor in a household ex9 ceeding 4 individuals, the highest median family in10 come of the applicable State for a family of 4 or 

11 fewer individuals, plus $525 per month for each in12 dividual in excess of 4, 

13 the plan may not provide for payments over a period that 

14 is longer than 5 years. 

15 ‘‘(2) If the current monthly income of the debtor and 

16 the debtor’s spouse combined, when multiplied by 12, is 

17 less than— 

18 ‘‘(A) in the case of a debtor in a household of 

19 1 person, the median family income of the applicable 

20 State for 1 earner; 

21 ‘‘(B) in the case of a debtor in a household of 

22 2, 3, or 4 individuals, the highest median family in23 come of the applicable State for a family of the same 

24 number or fewer individuals; or 
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1 ‘‘(C) in the case of a debtor in a household ex2 ceeding 4 individuals, the highest median family in3 come of the applicable State for a family of 4 or 

4 fewer individuals, plus $525 per month for each in5 dividual in excess of 4, 

6 the plan may not provide for payments over a period that 

7 is longer than 3 years, unless the court, for cause, ap8 proves a longer period, but the court may not approve a 

9 period that is longer than 5 years.’’; 

10 (2) in section 1325(b)(1)(B), by striking 

11 ‘‘three-year period’’ and inserting ‘‘applicable com12 mitment period’’; and 

13 (3) in section 1325(b), as amended by section 

14 102, by adding at the end the following: 

15 ‘‘(4) For purposes of this subsection, the ‘applicable 

16 commitment period’— 

17 ‘‘(A) subject to subparagraph (B), shall be— 

18 ‘‘(i) 3 years; or 

19 ‘‘(ii) not less than 5 years, if the current 

20 monthly income of the debtor and the debtor’s 

21 spouse combined, when multiplied by 12, is not 

22 less than— 

23 ‘‘(I) in the case of a debtor in a 

24 household of 1 person, the median family 
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1 income of the applicable State for 1 earn2 er; 

3 ‘‘(II) in the case of a debtor in a 

4 household of 2, 3, or 4 individuals, the 

5 highest median family income of the appli6 cable State for a family of the same num7 ber or fewer individuals; or 

8 ‘‘(III) in the case of a debtor in a 

9 household exceeding 4 individuals, the 

10 highest median family income of the appli11 cable State for a family of 4 or fewer indi12 viduals, plus $525 per month for each indi13 vidual in excess of 4; and 

14 ‘‘(B) may be less than 3 or 5 years, whichever 

15 is applicable under subparagraph (A), but only if the 

16 plan provides for payment in full of all allowed unse17 cured claims over a shorter period.’’; and 

18 (4) in section 1329(c), by striking ‘‘three 

19 years’’ and inserting ‘‘the applicable commitment pe20 riod under section 1325(b)(1)(B)’’. 

21 SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF 

22 RULE 9011 OF THE FEDERAL RULES OF BANK23 RUPTCY PROCEDURE. 

24 It is the sense of Congress that rule 9011 of the Fed25 eral Rules of Bankruptcy Procedure (11 U.S.C. App.) 
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1 should be modified to include a requirement that all docu2 ments (including schedules), signed and unsigned, sub3 mitted to the court or to a trustee by debtors who rep4 resent themselves and debtors who are represented by at5 torneys be submitted only after the debtors or the debtors’ 

6 attorneys have made reasonable inquiry to verify that the 

7 information contained in such documents is— 

8 (1) well grounded in fact; and 

9 (2) warranted by existing law or a good faith 

10 argument for the extension, modification, or reversal 

11 of existing law. 

12 SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL 

13 CASES. 

14 Section 362(e) of title 11, United States Code, is 

15 amended— 

16 (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and 

17 (2) by adding at the end the following: 

18 ‘‘(2) Notwithstanding paragraph (1), in a case under 

19 chapter 7, 11, or 13 in which the debtor is an individual, 

20 the stay under subsection (a) shall terminate on the date 

21 that is 60 days after a request is made by a party in inter22 est under subsection (d), unless— 

23 ‘‘(A) a final decision is rendered by the court 

24 during the 60-day period beginning on the date of 

25 the request; or 
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1 ‘‘(B) such 60-day period is extended— 

2 ‘‘(i) by agreement of all parties in interest; 

3 or 

4 ‘‘(ii) by the court for such specific period 

5 of time as the court finds is required for good 

6 cause, as described in findings made by the 

7 court.’’. 

8 SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS. 

9 (a) PROPERTY OF THE ESTATE.— 

10 (1) IN GENERAL.—Subchapter I of chapter 11 

11 of title 11, United States Code, is amended by add12 ing at the end the following: 

13 ‘‘§ 1115. Property of the estate 

14 ‘‘(a) In a case in which the debtor is an individual, 

15 property of the estate includes, in addition to the property 

16 specified in section 541— 

17 ‘‘(1) all property of the kind specified in section 

18 541 that the debtor acquires after the commence19 ment of the case but before the case is closed, dis20 missed, or converted to a case under chapter 7, 12, 

21 or 13, whichever occurs first; and 

22 ‘‘(2) earnings from services performed by the 

23 debtor after the commencement of the case but be24 fore the case is closed, dismissed, or converted to a 
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1 case under chapter 7, 12, or 13, whichever occurs 

2 first. 

3 ‘‘(b) Except as provided in section 1104 or a con4 firmed plan or order confirming a plan, the debtor shall 

5 remain in possession of all property of the estate.’’. 

6 (2) CLERICAL AMENDMENT.—The table of sec7 tions for subchapter I of chapter 11 of title 11, 

8 United States Code, is amended by adding at the 

9 end the following: 

‘‘1115. Property of the estate.’’. 

10 (b) CONTENTS OF PLAN.—Section 1123(a) of title 

11 11, United States Code, is amended— 

12 (1) in paragraph (6), by striking ‘‘and’’ at the 

13 end; 

14 (2) in paragraph (7), by striking the period and 

15 inserting ‘‘; and’’; and 

16 (3) by adding at the end the following: 

17 ‘‘(8) in a case in which the debtor is an indi18 vidual, provide for the payment to creditors under 

19 the plan of all or such portion of earnings from per20 sonal services performed by the debtor after the 

21 commencement of the case or other future income of 

22 the debtor as is necessary for the execution of the 

23 plan.’’. 

24 (c) CONFIRMATION OF PLAN.— 
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1 (1) REQUIREMENTS RELATING TO VALUE OF

2 PROPERTY.—Section 1129(a) of title 11, United 

3 States Code, as amended by section 213, is amended 

4 by adding at the end the following: 

5 ‘‘(15) In a case in which the debtor is an indi6 vidual and in which the holder of an allowed unse7 cured claim objects to the confirmation of the plan— 

8 ‘‘(A) the value, as of the effective date of 

9 the plan, of the property to be distributed 

10 under the plan on account of such claim is not 

11 less than the amount of such claim; or 

12 ‘‘(B) the value of the property to be dis13 tributed under the plan is not less than the pro14 jected disposable income of the debtor (as de15 fined in section 1325(b)(2)) to be received dur16 ing the 5-year period beginning on the date that 

17 the first payment is due under the plan, or dur18 ing the period for which the plan provides pay19 ments, whichever is longer.’’. 

20 (2) REQUIREMENT RELATING TO INTERESTS IN

21 PROPERTY.—Section 1129(b)(2)(B)(ii) of title 11, 

22 United States Code, is amended by inserting before 

23 the period at the end the following: ‘‘, except that 

24 in a case in which the debtor is an individual, the 

25 debtor may retain property included in the estate 
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1 under section 1115, subject to the requirements of 

2 subsection (a)(14) of this section’’. 

3 (d) EFFECT OF CONFIRMATION.—Section 1141(d) of 

4 title 11, United States Code, is amended— 

5 (1) in paragraph (2), by striking ‘‘The con6 firmation of a plan does not discharge an individual 

7 debtor’’ and inserting ‘‘A discharge under this chap8 ter does not discharge a debtor who is an indi9 vidual’’; and 

10 (2) by adding at the end the following: 

11 ‘‘(5) In a case in which the debtor is an individual— 

12 ‘‘(A) unless after notice and a hearing the court 

13 orders otherwise for cause, confirmation of the plan 

14 does not discharge any debt provided for in the plan 

15 until the court grants a discharge on completion of 

16 all payments under the plan; 

17 ‘‘(B) at any time after the confirmation of the 

18 plan, and after notice and a hearing, the court may 

19 grant a discharge to the debtor who has not com20 pleted payments under the plan if— 

21 ‘‘(i) the value, as of the effective date of 

22 the plan, of property actually distributed under 

23 the plan on account of each allowed unsecured 

24 claim is not less than the amount that would 

25 have been paid on such claim if the estate of 
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1 the debtor had been liquidated under chapter 7 

2 on such date; and 

3 ‘‘(ii) modification of the plan under section 

4 1127 is not practicable; and’’. 

5 (e) MODIFICATION OF PLAN.—Section 1127 of title 

6 11, United States Code, is amended by adding at the end 

7 the following: 

8 ‘‘(e) If the debtor is an individual, the plan may be 

9 modified at any time after confirmation of the plan but 

10 before the completion of payments under the plan, whether 

11 or not the plan has been substantially consummated, upon 

12 request of the debtor, the trustee, the United States trust13 ee, or the holder of an allowed unsecured claim, to— 

14 ‘‘(1) increase or reduce the amount of payments 

15 on claims of a particular class provided for by the 

16 plan; 

17 ‘‘(2) extend or reduce the time period for such 

18 payments; or 

19 ‘‘(3) alter the amount of the distribution to a 

20 creditor whose claim is provided for by the plan to 

21 the extent necessary to take account of any payment 

22 of such claim made other than under the plan. 

23 ‘‘(f)(1) Sections 1121 through 1128 and the require24 ments of section 1129 apply to any modification under 

25 subsection (a). 
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1 ‘‘(2) The plan, as modified, shall become the plan 

2 only after there has been disclosure under section 1125 

3 as the court may direct, notice and a hearing, and such 

4 modification is approved.’’. 

5 SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION. 

6 (a) EXEMPTIONS.—Section 522 of title 11, United 

7 States Code, as amended by sections 224 and 308, is 

8 amended by adding at the end the following: 

9 ‘‘(p)(1) Except as provided in paragraph (2) of this 

10 subsection and sections 544 and 548, as a result of elect11 ing under subsection (b)(3)(A) to exempt property under 

12 State or local law, a debtor may not exempt any amount 

13 of interest that was acquired by the debtor during the 

14 1215-day period preceding the date of the filing of the 

15 petition that exceeds in the aggregate $125,000 in value 

16 in— 

17 ‘‘(A) real or personal property that the debtor 

18 or a dependent of the debtor uses as a residence; 

19 ‘‘(B) a cooperative that owns property that the 

20 debtor or a dependent of the debtor uses as a resi21 dence; 

22 ‘‘(C) a burial plot for the debtor or a dependent 

23 of the debtor; or 

24 ‘‘(D) real or personal property that the debtor 

25 or dependent of the debtor claims as a homestead. 
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1 ‘‘(2)(A) The limitation under paragraph (1) shall not 

2 apply to an exemption claimed under subsection (b)(3)(A) 

3 by a family farmer for the principal residence of such 

4 farmer. 

5 ‘‘(B) For purposes of paragraph (1), any amount of 

6 such interest does not include any interest transferred 

7 from a debtor’s previous principal residence (which was 

8 acquired prior to the beginning of such 1215-day period) 

9 into the debtor’s current principal residence, if the debt10 or’s previous and current residences are located in the 

11 same State. 

12 ‘‘(q)(1) As a result of electing under subsection 

13 (b)(3)(A) to exempt property under State or local law, a 

14 debtor may not exempt any amount of an interest in prop15 erty described in subparagraphs (A), (B), (C), and (D) 

16 of subsection (p)(1) which exceeds in the aggregate 

17 $125,000 if— 

18 ‘‘(A) the court determines, after notice and a 

19 hearing, that the debtor has been convicted of a fel20 ony (as defined in section 3156 of title 18), which 

21 under the circumstances, demonstrates that the fil22 ing of the case was an abuse of the provisions of this 

23 title; or 

24 ‘‘(B) the debtor owes a debt arising from— 
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1 ‘‘(i) any violation of the Federal securities 

2 laws (as defined in section 3(a)(47) of the Secu3 rities Exchange Act of 1934), any State securi4 ties laws, or any regulation or order issued 

5 under Federal securities laws or State securities 

6 laws; 

7 ‘‘(ii) fraud, deceit, or manipulation in a fi8 duciary capacity or in connection with the pur9 chase or sale of any security registered under 

10 section 12 or 15(d) of the Securities Exchange 

11 Act of 1934 or under section 6 of the Securities 

12 Act of 1933; 

13 ‘‘(iii) any civil remedy under section 1964 

14 of title 18; or 

15 ‘‘(iv) any criminal act, intentional tort, or 

16 willful or reckless misconduct that caused seri17 ous physical injury or death to another indi18 vidual in the preceding 5 years. 

19 ‘‘(2) Paragraph (1) shall not apply to the extent the 

20 amount of an interest in property described in subpara21 graphs (A), (B), (C), and (D) of subsection (p)(1) is rea22 sonably necessary for the support of the debtor and any 

23 dependent of the debtor.’’. 

24 (b) ADJUSTMENT OF DOLLAR AMOUNTS.—Para25 graphs (1) and (2) of section 104(b) of title 11, United 
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1 States Code, as amended by section 224, are amended by 

2 inserting ‘‘522(p), 522(q),’’ after ‘‘522(n),’’. 

3 SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI4 PANT CONTRIBUTIONS AND OTHER PROP5 ERTY FROM THE ESTATE. 

6 Section 541(b) of title 11, United States Code, as 

7 amended by section 225, is amended by adding after para8 graph (6), as added by section 225(a)(1)(C), the following: 

9 ‘‘(7) any amount— 

10 ‘‘(A) withheld by an employer from the 

11 wages of employees for payment as contribu12 tions— 

13 ‘‘(i) to— 

14 ‘‘(I) an employee benefit plan 

15 that is subject to title I of the Em16 ployee Retirement Income Security 

17 Act of 1974 or under an employee 

18 benefit plan which is a governmental 

19 plan under section 414(d) of the In20 ternal Revenue Code of 1986; 

21 ‘‘(II) a deferred compensation 

22 plan under section 457 of the Internal 

23 Revenue Code of 1986; or 
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1 ‘‘(III) a tax-deferred annuity 

2 under section 403(b) of the Internal 

3 Revenue Code of 1986; 

4 except that such amount under this sub5 paragraph shall not constitute disposable 

6 income as defined in section 1325(b)(2); or 

7 ‘‘(ii) to a health insurance plan regu8 lated by State law whether or not subject 

9 to such title; or 

10 ‘‘(B) received by an employer from employ11 ees for payment as contributions— 

12 ‘‘(i) to— 

13 ‘‘(I) an employee benefit plan 

14 that is subject to title I of the Em15 ployee Retirement Income Security 

16 Act of 1974 or under an employee 

17 benefit plan which is a governmental 

18 plan under section 414(d) of the In19 ternal Revenue Code of 1986; 

20 ‘‘(II) a deferred compensation 

21 plan under section 457 of the Internal 

22 Revenue Code of 1986; or 

23 ‘‘(III) a tax-deferred annuity 

24 under section 403(b) of the Internal 

25 Revenue Code of 1986; 
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1 except that such amount under this sub2 paragraph shall not constitute disposable 

3 income, as defined in section 1325(b)(2); 

4 or 

5 ‘‘(ii) to a health insurance plan regu6 lated by State law whether or not subject 

7 to such title;’’. 

8 SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLV9 ING BANKRUPTCY PROFESSIONALS. 

10 (a) IN GENERAL.—Section 1334 of title 28, United 

11 States Code, is amended— 

12 (1) in subsection (b), by striking ‘‘Notwith13 standing’’ and inserting ‘‘Except as provided in sub14 section (e)(2), and notwithstanding’’; and 

15 (2) by striking subsection (e) and inserting the 

16 following: 

17 ‘‘(e) The district court in which a case under title 

18 11 is commenced or is pending shall have exclusive juris19 diction— 

20 ‘‘(1) of all the property, wherever located, of the 

21 debtor as of the commencement of such case, and of 

22 property of the estate; and 

23 ‘‘(2) over all claims or causes of action that in24 volve construction of section 327 of title 11, United 
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1 States Code, or rules relating to disclosure require2 ments under section 327.’’. 

3 (b) APPLICABILITY.—This section shall only apply to 

4 cases filed after the date of enactment of this Act. 

5 SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE 

6 INCREASE. 

7 (a) ACTIONS UNDER CHAPTER 7, 11, OR 13 OF

8 TITLE 11, UNITED STATES CODE.—Section 1930(a) of 

9 title 28, United States Code, is amended— 

10 (1) by striking paragraph (1) and inserting the 

11 following: 

12 ‘‘(1) For a case commenced under— 

13 ‘‘(A) chapter 7 of title 11, $200; and 

14 ‘‘(B) chapter 13 of title 11, $150.’’; and 

15 (2) in paragraph (3), by striking ‘‘$800’’ and 

16 inserting ‘‘$1000’’. 

17 (b) UNITED STATES TRUSTEE SYSTEM FUND.—Sec18 tion 589a(b) of title 28, United States Code, is amended— 

19 (1) by striking paragraph (1) and inserting the 

20 following: 

21 ‘‘(1)(A) 40.63 percent of the fees collected 

22 under section 1930(a)(1)(A) of this title; and 

23 ‘‘(B) 70.00 percent of the fees collected under 

24 section 1930(a)(1)(B);’’; 
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1 (2) in paragraph (2), by striking ‘‘one-half’’ 

2 and inserting ‘‘75 percent’’; and 

3 (3) in paragraph (4), by striking ‘‘one-half’’ 

4 and inserting ‘‘100 percent’’. 

5 (c) COLLECTION AND DEPOSIT OF MISCELLANEOUS

6 BANKRUPTCY FEES.—Section 406(b) of the Judiciary Ap7 propriations Act, 1990 (28 U.S.C. 1931 note) is amended 

8 by striking ‘‘pursuant to 28 U.S.C. section 1930(b)’’ and 

9 all that follows through ‘‘28 U.S.C. section 1931’’ and in10 serting ‘‘under section 1930(b) of title 28, United States 

11 Code, 31.25 of the fees collected under section 

12 1930(a)(1)(A) of that title, 30.00 percent of the fees col13 lected under section 1930(a)(1)(B) of that title, and 25 

14 percent of the fees collected under section 1930(a)(3) of 

15 that title shall be deposited as offsetting receipts to the 

16 fund established under section 1931 of that title’’. 

17 (d) SUNSET DATE.—The amendments made by sub18 sections (b) and (c) shall be effective during the 2-year 

19 period beginning on the date of enactment of this Act. 

20 (e) USE OF INCREASED RECEIPTS.— 

21 (1) JUDGES’ SALARIES AND BENEFITS.—The 

22 amount of fees collected under paragraphs (1) and 

23 (3) of section 1930(a) of title 28, United States 

24 Code, during the 5-year period beginning on the 

25 date of enactment of this Act, that is greater than 
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1 the amount that would have been collected if the 

2 amendments made by subsection (a) had not taken 

3 effect shall be used, to the extent necessary, to pay 

4 the salaries and benefits of the judges appointed 

5 pursuant to section 1223 of this Act. 

6 (2) REMAINDER.—Any amount described in 

7 paragraph (1), which is not used for the purpose de8 scribed in paragraph (1), shall be deposited into the 

9 Treasury of the United States to the extent nec10 essary to offset the decrease in governmental re11 ceipts resulting from the amendments made by sub12 sections (b) and (c). 

13 SEC. 326. SHARING OF COMPENSATION. 

14 Section 504 of title 11, United States Code, is 

15 amended by adding at the end the following: 

16 ‘‘(c) This section shall not apply with respect to shar17 ing, or agreeing to share, compensation with a bona fide 

18 public service attorney referral program that operates in 

19 accordance with non-Federal law regulating attorney re20 ferral services and with rules of professional responsibility 

21 applicable to attorney acceptance of referrals.’’. 

22 SEC. 327. FAIR VALUATION OF COLLATERAL. 

23 Section 506(a) of title 11, United States Code, is 

24 amended by— 

25 (1) inserting ‘‘(1)’’ after ‘‘(a)’’; and 
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1 (2) by adding at the end the following: 

2 ‘‘(2) If the debtor is an individual in a case under 

3 chapter 7 or 13, such value with respect to personal prop4 erty securing an allowed claim shall be determined based 

5 on the replacement value of such property as of the date 

6 of the filing of the petition without deduction for costs 

7 of sale or marketing. With respect to property acquired 

8 for personal, family, or household purposes, replacement 

9 value shall mean the price a retail merchant would charge 

10 for property of that kind considering the age and condition 

11 of the property at the time value is determined.’’. 

12 SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGA13 TIONS. 

14 (a) EXECUTORY CONTRACTS AND UNEXPIRED

15 LEASES.—Section 365 of title 11, United States Code, is 

16 amended— 

17 (1) in subsection (b)— 

18 (A) in paragraph (1)(A), by striking the 

19 semicolon at the end and inserting the fol20 lowing: ‘‘other than a default that is a breach 

21 of a provision relating to the satisfaction of any 

22 provision (other than a penalty rate or penalty 

23 provision) relating to a default arising from any 

24 failure to perform nonmonetary obligations 

25 under an unexpired lease of real property, if it 
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1 is impossible for the trustee to cure such de2 fault by performing nonmonetary acts at and 

3 after the time of assumption, except that if 

4 such default arises from a failure to operate in 

5 accordance with a nonresidential real property 

6 lease, then such default shall be cured by per7 formance at and after the time of assumption 

8 in accordance with such lease, and pecuniary 

9 losses resulting from such default shall be com10 pensated in accordance with the provisions of 

11 this paragraph;’’; and 

12 (B) in paragraph (2)(D), by striking ‘‘pen13 alty rate or provision’’ and inserting ‘‘penalty 

14 rate or penalty provision’’; 

15 (2) in subsection (c)— 

16 (A) in paragraph (2), by inserting ‘‘or’’ at 

17 the end; 

18 (B) in paragraph (3), by striking ‘‘; or’’ at 

19 the end and inserting a period; and 

20 (C) by striking paragraph (4); 

21 (3) in subsection (d)— 

22 (A) by striking paragraphs (5) through 

23 (9); and 

24 (B) by redesignating paragraph (10) as 

25 paragraph (5); and 
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1 (4) in subsection (f)(1) by striking ‘‘; except 

2 that’’ and all that follows through the end of the 

3 paragraph and inserting a period. 

4 (b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec5 tion 1124(2) of title 11, United States Code, is amend6 ed— 

7 (1) in subparagraph (A), by inserting ‘‘or of a 

8 kind that section 365(b)(2) expressly does not re9 quire to be cured’’ before the semicolon at the end; 

10 (2) in subparagraph (C), by striking ‘‘and’’ at 

11 the end; 

12 (3) by redesignating subparagraph (D) as sub13 paragraph (E); and 

14 (4) by inserting after subparagraph (C) the fol15 lowing: 

16 ‘‘(D) if such claim or such interest arises 

17 from any failure to perform a nonmonetary ob18 ligation, other than a default arising from fail19 ure to operate a nonresidential real property 

20 lease subject to section 365(b)(1)(A), com21 pensates the holder of such claim or such inter22 est (other than the debtor or an insider) for any 

23 actual pecuniary loss incurred by such holder as 

24 a result of such failure; and’’. 
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1 SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND 

2 BENEFITS. 

3 Section 503(b)(1)(A) of title 11, United States Code, 

4 is amended to read as follows: 

5 ‘‘(A) the actual, necessary costs and expenses of pre6 serving the estate including— 

7 ‘‘(i) wages, salaries, and commissions for 

8 services rendered after the commencement of 

9 the case; and 

10 ‘‘(ii) wages and benefits awarded pursuant 

11 to a judicial proceeding or a proceeding of the 

12 National Labor Relations Board as back pay 

13 attributable to any period of time occurring 

14 after commencement of the case under this 

15 title, as a result of a violation of Federal or 

16 State law by the debtor, without regard to the 

17 time of the occurrence of unlawful conduct on 

18 which such award is based or to whether any 

19 services were rendered, if the court determines 

20 that payment of wages and benefits by reason 

21 of the operation of this clause will not substan22 tially increase the probability of layoff or termi23 nation of current employees, or of nonpayment 

24 of domestic support obligations, during the case 

25 under this title;’’. 
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1 SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF 

2 CERTAIN PROCEEDINGS. 

3 (a) CHAPTER 7.—Section 727(a) of title 11, United 

4 States Code, as amended by section 106, is amended— 

5 (1) in paragraph (10), by striking ‘‘or’’ at the 

6 end; 

7 (2) in paragraph (11) by striking the period at 

8 the end and inserting ‘‘; or’’; and 

9 (3) by inserting after paragraph (11) the fol10 lowing: 

11 ‘‘(12) the court after notice and a hearing held 

12 not more than 10 days before the date of the entry 

13 of the order granting the discharge finds that there 

14 is reasonable cause to believe that— 

15 ‘‘(A) section 522(q)(1) may be applicable 

16 to the debtor; and 

17 ‘‘(B) there is pending any proceeding in 

18 which the debtor may be found guilty of a fel19 ony of the kind described in section 

20 522(q)(1)(A) or liable for a debt of the kind de21 scribed in section 522(q)(1)(B).’’. 

22 (b) CHAPTER 11.—Section 1141(d) of title 11, 

23 United States Code, as amended by section 321, is amend24 ed by adding at the end the following: 

25 ‘‘(C) unless after notice and a hearing held not 

26 more than 10 days before the date of the entry of 
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1 the order granting the discharge, the court finds 

2 that there is no reasonable cause to believe that— 

3 ‘‘(i) section 522(q)(1) may be applicable to 

4 the debtor; and 

5 ‘‘(ii) there is pending any proceeding in 

6 which the debtor may be found guilty of a fel7 ony of the kind described in section 

8 522(q)(1)(A) or liable for a debt of the kind de9 scribed in section 522(q)(1)(B).’’. 

10 (c) CHAPTER 12.—Section 1228 of title 11, United 

11 States Code, is amended— 

12 (1) in subsection (a) by striking ‘‘As’’ and in13 serting ‘‘Subject to subsection (d), as’’, 

14 (2) in subsection (b) by striking ‘‘At’’ and in15 serting ‘‘Subject to subsection (d), at’’, and 

16 (3) by adding at the end the following: 

17 ‘‘(f) The court may not grant a discharge under this 

18 chapter unless the court after notice and a hearing held 

19 not more than 10 days before the date of the entry of 

20 the order granting the discharge finds that there is no rea21 sonable cause to believe that— 

22 ‘‘(1) section 522(q)(1) may be applicable to the 

23 debtor; and 

24 ‘‘(2) there is pending any proceeding in which 

25 the debtor may be found guilty of a felony of the 
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1 kind described in section 522(q)(1)(A) or liable for 

2 a debt of the kind described in section 

3 522(q)(1)(B).’’. 

4 (d) CHAPTER 13.—Section 1328 of title 11, United 

5 States Code, as amended by section 106, is amended— 

6 (1) in subsection (a) by striking ‘‘As’’ and in7 serting ‘‘Subject to subsection (d), as’’, 

8 (2) in subsection (b) by striking ‘‘At’’ and in9 serting ‘‘Subject to subsection (d), at’’, and 

10 (3) by adding at the end the following: 

11 ‘‘(h) The court may not grant a discharge under this 

12 chapter unless the court after notice and a hearing held 

13 not more than 10 days before the date of the entry of 

14 the order granting the discharge finds that there is no rea15 sonable cause to believe that— 

16 ‘‘(1) section 522(q)(1) may be applicable to the 

17 debtor; and 

18 ‘‘(2) there is pending any proceeding in which 

19 the debtor may be found guilty of a felony of the 

20 kind described in section 522(q)(1)(A) or liable for 

21 a debt of the kind described in section 

22 522(q)(1)(B).’’. 
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1 SEC. 331. LIMITATION ON RETENTION BONUSES, SEVER2 ANCE PAY, AND CERTAIN OTHER PAYMENTS. 

3 Section 503 of title 11, United States Code, is 

4 amended by adding at the end the following: 

5 ‘‘(c) Notwithstanding subsection (b), there shall nei6 ther be allowed, nor paid— 

7 ‘‘(1) a transfer made to, or an obligation in8 curred for the benefit of, an insider of the debtor for 

9 the purpose of inducing such person to remain with 

10 the debtor’s business, absent a finding by the court 

11 based on evidence in the record that— 

12 ‘‘(A) the transfer or obligation is essential 

13 to retention of the person because the individual 

14 has a bona fide job offer from another business 

15 at the same or greater rate of compensation; 

16 ‘‘(B) the services provided by the person 

17 are essential to the survival of the business; and 

18 ‘‘(C) either— 

19 ‘‘(i) the amount of the transfer made 

20 to, or obligation incurred for the benefit of, 

21 the person is not greater than an amount 

22 equal to 10 times the amount of the mean 

23 transfer or obligation of a similar kind 

24 given to nonmanagement employees for 

25 any purpose during the calendar year in 
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1 which the transfer is made or the obliga2 tion is incurred; or 

3 ‘‘(ii) if no such similar transfers were 

4 made to, or obligations were incurred for 

5 the benefit of, such nonmanagement em6 ployees during such calendar year, the 

7 amount of the transfer or obligation is not 

8 greater than an amount equal to 25 per9 cent of the amount of any similar transfer 

10 or obligation made to or incurred for the 

11 benefit of such insider for any purpose 

12 during the calendar year before the year in 

13 which such transfer is made or obligation 

14 is incurred; 

15 ‘‘(2) a severance payment to an insider of the 

16 debtor, unless— 

17 ‘‘(A) the payment is part of a program 

18 that is generally applicable to all full-time em19 ployees; and 

20 ‘‘(B) the amount of the payment is not 

21 greater than 10 times the amount of the mean 

22 severance pay given to nonmanagement employ23 ees during the calendar year in which the pay24 ment is made; or 
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1 ‘‘(3) other transfers or obligations that are out2 side the ordinary course of business and not justified 

3 by the facts and circumstances of the case, including 

4 transfers made to, or obligations incurred for the 

5 benefit of, officers, managers, or consultants hired 

6 after the date of the filing of the petition.’’. 

7 SEC. 332. FRAUDULENT INVOLUNTARY BANKRUPTCY. 

8 (a) SHORT TITLE.—This section may be cited as the 

9 ‘‘Involuntary Bankruptcy Improvement Act of 2005’’. 

10 (b) INVOLUNTARY CASES.—Section 303 of title 11, 

11 United States Code, is amended by adding at the end the 

12 following: 

13 ‘‘(l)(1) If— 

14 ‘‘(A) the petition under this section is false or 

15 contains any materially false, fictitious, or fraudu16 lent statement; 

17 ‘‘(B) the debtor is an individual; and 

18 ‘‘(C) the court dismisses such petition, 

19 the court, upon the motion of the debtor, shall seal all 

20 the records of the court relating to such petition, and all 

21 references to such petition. 

22 ‘‘(2) If the debtor is an individual and the court dis23 misses a petition under this section, the court may enter 

24 an order prohibiting all consumer reporting agencies (as 

25 defined in section 603(f) of the Fair Credit Reporting Act 
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1 (15 U.S.C. 1681a(f))) from making any consumer report 

2 (as defined in section 603(d) of that Act) that contains 

3 any information relating to such petition or to the case 

4 commenced by the filing of such petition. 

5 ‘‘(3) Upon the expiration of the statute of limitations 

6 described in section 3282 of title 18, for a violation of 

7 section 152 or 157 of such title, the court, upon the mo8 tion of the debtor and for good cause, may expunge any 

9 records relating to a petition filed under this section.’’. 

10 (c) BANKRUPTCY FRAUD.—Section 157 of title 18, 

11 United States Code, is amended by inserting ‘‘, including 

12 a fraudulent involuntary bankruptcy petition under sec13 tion 303 of such title’’ after ‘‘title 11’’. 

14 TITLE IV—GENERAL AND SMALL 

15 BUSINESS BANKRUPTCY PRO16 VISIONS 

17 Subtitle A—General Business 

18 Bankruptcy Provisions 

19 SEC. 401. ADEQUATE PROTECTION FOR INVESTORS. 

20 (a) DEFINITION.—Section 101 of title 11, United 

21 States Code, is amended by inserting after paragraph (48) 

22 the following: 

23 ‘‘(48A) ‘securities self regulatory organization’ 

24 means either a securities association registered with 

25 the Securities and Exchange Commission under sec-
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1 tion 15A of the Securities Exchange Act of 1934 or 

2 a national securities exchange registered with the 

3 Securities and Exchange Commission under section 

4 6 of the Securities Exchange Act of 1934;’’. 

5 (b) AUTOMATIC STAY.—Section 362(b) of title 11, 

6 United States Code, as amended by sections 224, 303, and 

7 311, is amended by inserting after paragraph (24) the fol8 lowing: 

9 ‘‘(25) under subsection (a), of— 

10 ‘‘(A) the commencement or continuation of 

11 an investigation or action by a securities self 

12 regulatory organization to enforce such organi13 zation’s regulatory power; 

14 ‘‘(B) the enforcement of an order or deci15 sion, other than for monetary sanctions, ob16 tained in an action by such securities self regu17 latory organization to enforce such organiza18 tion’s regulatory power; or 

19 ‘‘(C) any act taken by such securities self 

20 regulatory organization to delist, delete, or 

21 refuse to permit quotation of any stock that 

22 does not meet applicable regulatory require23 ments;’’. 
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1 SEC. 402. MEETINGS OF CREDITORS AND EQUITY SECURITY 

2 HOLDERS. 

3 Section 341 of title 11, United States Code, is 

4 amended by adding at the end the following: 

5 ‘‘(e) Notwithstanding subsections (a) and (b), the 

6 court, on the request of a party in interest and after notice 

7 and a hearing, for cause may order that the United States 

8 trustee not convene a meeting of creditors or equity secu9 rity holders if the debtor has filed a plan as to which the 

10 debtor solicited acceptances prior to the commencement 

11 of the case.’’. 

12 SEC. 403. PROTECTION OF REFINANCE OF SECURITY IN13 TEREST. 

14 Subparagraphs (A), (B), and (C) of section 547(e)(2) 

15 of title 11, United States Code, are each amended by strik16 ing ‘‘10’’ each place it appears and inserting ‘‘30’’. 

17 SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED 

18 LEASES. 

19 (a) IN GENERAL.—Section 365(d)(4) of title 11, 

20 United States Code, is amended to read as follows: 

21 ‘‘(4)(A) Subject to subparagraph (B), an unexpired 

22 lease of nonresidential real property under which the debt23 or is the lessee shall be deemed rejected, and the trustee 

24 shall immediately surrender that nonresidential real prop25 erty to the lessor, if the trustee does not assume or reject 

26 the unexpired lease by the earlier of— 
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1 ‘‘(i) the date that is 120 days after the date of 

2 the order for relief; or 

3 ‘‘(ii) the date of the entry of an order con4 firming a plan. 

5 ‘‘(B)(i) The court may extend the period determined 

6 under subparagraph (A), prior to the expiration of the 

7 120-day period, for 90 days on the motion of the trustee 

8 or lessor for cause. 

9 ‘‘(ii) If the court grants an extension under clause 

10 (i), the court may grant a subsequent extension only upon 

11 prior written consent of the lessor in each instance.’’. 

12 (b) EXCEPTION.—Section 365(f)(1) of title 11, 

13 United States Code, is amended by striking ‘‘subsection’’ 

14 the first place it appears and inserting ‘‘subsections (b) 

15 and’’. 

16 SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS 

17 COMMITTEES. 

18 (a) APPOINTMENT.—Section 1102(a) of title 11, 

19 United States Code, is amended by adding at the end the 

20 following: 

21 ‘‘(4) On request of a party in interest and after notice 

22 and a hearing, the court may order the United States 

23 trustee to change the membership of a committee ap24 pointed under this subsection, if the court determines that 

25 the change is necessary to ensure adequate representation 
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1 of creditors or equity security holders. The court may 

2 order the United States trustee to increase the number 

3 of members of a committee to include a creditor that is 

4 a small business concern (as described in section 3(a)(1) 

5 of the Small Business Act), if the court determines that 

6 the creditor holds claims (of the kind represented by the 

7 committee) the aggregate amount of which, in comparison 

8 to the annual gross revenue of that creditor, is dispropor9 tionately large.’’. 

10 (b) INFORMATION.—Section 1102(b) of title 11, 

11 United States Code, is amended by adding at the end the 

12 following: 

13 ‘‘(3) A committee appointed under subsection (a) 

14 shall— 

15 ‘‘(A) provide access to information for creditors 

16 who— 

17 ‘‘(i) hold claims of the kind represented by 

18 that committee; and 

19 ‘‘(ii) are not appointed to the committee; 

20 ‘‘(B) solicit and receive comments from the 

21 creditors described in subparagraph (A); and 

22 ‘‘(C) be subject to a court order that compels 

23 any additional report or disclosure to be made to the 

24 creditors described in subparagraph (A).’’. 
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1 SEC. 406. AMENDMENT TO SECTION 546 OF TITLE 11, 

2 UNITED STATES CODE. 

3 Section 546 of title 11, United States Code, is 

4 amended— 

5 (1) by redesignating the second subsection (g) 

6 (as added by section 222(a) of Public Law 103–394) 

7 as subsection (h); 

8 (2) in subsection (h), as so redesignated, by in9 serting ‘‘and subject to the prior rights of holders of 

10 security interests in such goods or the proceeds of 

11 such goods’’ after ‘‘consent of a creditor’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(i)(1) Notwithstanding paragraphs (2) and (3) of 

14 section 545, the trustee may not avoid a warehouseman’s 

15 lien for storage, transportation, or other costs incidental 

16 to the storage and handling of goods. 

17 ‘‘(2) The prohibition under paragraph (1) shall be ap18 plied in a manner consistent with any State statute appli19 cable to such lien that is similar to section 7–209 of the 

20 Uniform Commercial Code, as in effect on the date of en21 actment of the Bankruptcy Abuse Prevention and Con22 sumer Protection Act of 2005, or any successor to such 

23 section 7–209.’’. 
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1 SEC. 407. AMENDMENTS TO SECTION 330(a) OF TITLE 11, 

2 UNITED STATES CODE. 

3 Section 330(a) of title 11, United States Code, is 

4 amended— 

5 (1) in paragraph (3)— 

6 (A) by striking ‘‘(A) In’’ and inserting 

7 ‘‘In’’; and 

8 (B) by inserting ‘‘to an examiner, trustee 

9 under chapter 11, or professional person’’ after 

10 ‘‘awarded’’; and 

11 (2) by adding at the end the following: 

12 ‘‘(7) In determining the amount of reasonable com13 pensation to be awarded to a trustee, the court shall treat 

14 such compensation as a commission, based on section 

15 326.’’. 

16 SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION. 

17 Section 1125 of title 11, United States Code, is 

18 amended by adding at the end the following: 

19 ‘‘(g) Notwithstanding subsection (b), an acceptance 

20 or rejection of the plan may be solicited from a holder 

21 of a claim or interest if such solicitation complies with ap22 plicable nonbankruptcy law and if such holder was solic23 ited before the commencement of the case in a manner 

24 complying with applicable nonbankruptcy law.’’. 
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1 SEC. 409. PREFERENCES. 

2 Section 547(c) of title 11, United States Code, is 

3 amended— 

4 (1) by striking paragraph (2) and inserting the 

5 following: 

6 ‘‘(2) to the extent that such transfer was in 

7 payment of a debt incurred by the debtor in the or8 dinary course of business or financial affairs of the 

9 debtor and the transferee, and such transfer was— 

10 ‘‘(A) made in the ordinary course of busi11 ness or financial affairs of the debtor and the 

12 transferee; or 

13 ‘‘(B) made according to ordinary business 

14 terms;’’; 

15 (2) in paragraph (8), by striking the period at 

16 the end and inserting ‘‘; or’’; and 

17 (3) by adding at the end the following: 

18 ‘‘(9) if, in a case filed by a debtor whose debts 

19 are not primarily consumer debts, the aggregate 

20 value of all property that constitutes or is affected 

21 by such transfer is less than $5,000.’’. 

22 SEC. 410. VENUE OF CERTAIN PROCEEDINGS. 

23 Section 1409(b) of title 28, United States Code, is 

24 amended by inserting ‘‘, or a debt (excluding a consumer 

25 debt) against a noninsider of less than $10,000,’’ after 

26 ‘‘$5,000’’. Section 1409(b) of title 28, United States Code, 
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1 is further amended by striking ‘‘$5,000’’ and inserting 

2 ‘‘$15,000’’. 

3 SEC. 411. PERIOD FOR FILING PLAN UNDER CHAPTER 11. 

4 Section 1121(d) of title 11, United States Code, is 

5 amended— 

6 (1) by striking ‘‘On’’ and inserting ‘‘(1) Subject 

7 to paragraph (2), on’’; and 

8 (2) by adding at the end the following: 

9 ‘‘(2)(A) The 120-day period specified in paragraph 

10 (1) may not be extended beyond a date that is 18 months 

11 after the date of the order for relief under this chapter. 

12 ‘‘(B) The 180-day period specified in paragraph (1) 

13 may not be extended beyond a date that is 20 months after 

14 the date of the order for relief under this chapter.’’. 

15 SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP IN16 TERESTS. 

17 Section 523(a)(16) of title 11, United States Code, 

18 is amended— 

19 (1) by striking ‘‘dwelling’’ the first place it ap20 pears; 

21 (2) by striking ‘‘ownership or’’ and inserting 

22 ‘‘ownership,’’; 

23 (3) by striking ‘‘housing’’ the first place it ap24 pears; and 
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1 (4) by striking ‘‘but only’’ and all that follows 

2 through ‘‘such period,’’ and inserting ‘‘or a lot in a 

3 homeowners association, for as long as the debtor or 

4 the trustee has a legal, equitable, or possessory own5 ership interest in such unit, such corporation, or 

6 such lot,’’. 

7 SEC. 413. CREDITOR REPRESENTATION AT FIRST MEETING 

8 OF CREDITORS. 

9 Section 341(c) of title 11, United States Code, is 

10 amended by inserting at the end the following: ‘‘Notwith11 standing any local court rule, provision of a State constitu12 tion, any otherwise applicable nonbankruptcy law, or any 

13 other requirement that representation at the meeting of 

14 creditors under subsection (a) be by an attorney, a cred15 itor holding a consumer debt or any representative of the 

16 creditor (which may include an entity or an employee of 

17 an entity and may be a representative for more than 1 

18 creditor) shall be permitted to appear at and participate 

19 in the meeting of creditors in a case under chapter 7 or 

20 13, either alone or in conjunction with an attorney for the 

21 creditor. Nothing in this subsection shall be construed to 

22 require any creditor to be represented by an attorney at 

23 any meeting of creditors.’’. 
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1 SEC. 414. DEFINITION OF DISINTERESTED PERSON. 

2 Section 101(14) of title 11, United States Code, is 

3 amended to read as follows: 

4 ‘‘(14) ‘disinterested person’ means a person 

5 that— 

6 ‘‘(A) is not a creditor, an equity security 

7 holder, or an insider; 

8 ‘‘(B) is not and was not, within 2 years be9 fore the date of the filing of the petition, a di10 rector, officer, or employee of the debtor; and 

11 ‘‘(C) does not have an interest materially 

12 adverse to the interest of the estate or of any 

13 class of creditors or equity security holders, by 

14 reason of any direct or indirect relationship to, 

15 connection with, or interest in, the debtor, or 

16 for any other reason;’’. 

17 SEC. 415. FACTORS FOR COMPENSATION OF PROFES18 SIONAL PERSONS. 

19 Section 330(a)(3) of title 11, United States Code, is 

20 amended— 

21 (1) in subparagraph (D), by striking ‘‘and’’ at 

22 the end; 

23 (2) by redesignating subparagraph (E) as sub24 paragraph (F); and 

25 (3) by inserting after subparagraph (D) the fol26 lowing: 
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1 ‘‘(E) with respect to a professional person, 

2 whether the person is board certified or otherwise 

3 has demonstrated skill and experience in the bank4 ruptcy field; and’’. 

5 SEC. 416. APPOINTMENT OF ELECTED TRUSTEE. 

6 Section 1104(b) of title 11, United States Code, is 

7 amended— 

8 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(2)(A) If an eligible, disinterested trustee is elected 

11 at a meeting of creditors under paragraph (1), the United 

12 States trustee shall file a report certifying that election. 

13 ‘‘(B) Upon the filing of a report under subparagraph 

14 (A)— 

15 ‘‘(i) the trustee elected under paragraph (1) 

16 shall be considered to have been selected and ap17 pointed for purposes of this section; and 

18 ‘‘(ii) the service of any trustee appointed under 

19 subsection (d) shall terminate. 

20 ‘‘(C) The court shall resolve any dispute arising out 

21 of an election described in subparagraph (A).’’. 

22 SEC. 417. UTILITY SERVICE. 

23 Section 366 of title 11, United States Code, is 

24 amended— 
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1 (1) in subsection (a), by striking ‘‘subsection 

2 (b)’’ and inserting ‘‘subsections (b) and (c)’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(c)(1)(A) For purposes of this subsection, the term 

5 ‘assurance of payment’ means— 

6 ‘‘(i) a cash deposit; 

7 ‘‘(ii) a letter of credit; 

8 ‘‘(iii) a certificate of deposit; 

9 ‘‘(iv) a surety bond; 

10 ‘‘(v) a prepayment of utility consumption; or 

11 ‘‘(vi) another form of security that is mutually 

12 agreed on between the utility and the debtor or the 

13 trustee. 

14 ‘‘(B) For purposes of this subsection an administra15 tive expense priority shall not constitute an assurance of 

16 payment. 

17 ‘‘(2) Subject to paragraphs (3) and (4), with respect 

18 to a case filed under chapter 11, a utility referred to in 

19 subsection (a) may alter, refuse, or discontinue utility 

20 service, if during the 30-day period beginning on the date 

21 of the filing of the petition, the utility does not receive 

22 from the debtor or the trustee adequate assurance of pay23 ment for utility service that is satisfactory to the utility. 

24 ‘‘(3)(A) On request of a party in interest and after 

25 notice and a hearing, the court may order modification 
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1 of the amount of an assurance of payment under para2 graph (2). 

3 ‘‘(B) In making a determination under this para4 graph whether an assurance of payment is adequate, the 

5 court may not consider— 

6 ‘‘(i) the absence of security before the date of 

7 the filing of the petition; 

8 ‘‘(ii) the payment by the debtor of charges for 

9 utility service in a timely manner before the date of 

10 the filing of the petition; or 

11 ‘‘(iii) the availability of an administrative ex12 pense priority. 

13 ‘‘(4) Notwithstanding any other provision of law, with 

14 respect to a case subject to this subsection, a utility may 

15 recover or set off against a security deposit provided to 

16 the utility by the debtor before the date of the filing of 

17 the petition without notice or order of the court.’’. 

18 SEC. 418. BANKRUPTCY FEES. 

19 Section 1930 of title 28, United States Code, is 

20 amended— 

21 (1) in subsection (a), by striking ‘‘Notwith22 standing section 1915 of this title, the’’ and insert23 ing ‘‘The’’; and 

24 (2) by adding at the end the following: 
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1 ‘‘(f)(1) Under the procedures prescribed by the Judi2 cial Conference of the United States, the district court or 

3 the bankruptcy court may waive the filing fee in a case 

4 under chapter 7 of title 11 for an individual if the court 

5 determines that such individual has income less than 150 

6 percent of the income official poverty line (as defined by 

7 the Office of Management and Budget, and revised annu8 ally in accordance with section 673(2) of the Omnibus 

9 Budget Reconciliation Act of 1981) applicable to a family 

10 of the size involved and is unable to pay that fee in install11 ments. For purposes of this paragraph, the term ‘filing 

12 fee’ means the filing fee required by subsection (a), or any 

13 other fee prescribed by the Judicial Conference under sub14 sections (b) and (c) that is payable to the clerk upon the 

15 commencement of a case under chapter 7. 

16 ‘‘(2) The district court or the bankruptcy court may 

17 waive for such debtors other fees prescribed under sub18 sections (b) and (c). 

19 ‘‘(3) This subsection does not restrict the district 

20 court or the bankruptcy court from waiving, in accordance 

21 with Judicial Conference policy, fees prescribed under this 

22 section for other debtors and creditors.’’. 

23 SEC. 419. MORE COMPLETE INFORMATION REGARDING AS24 SETS OF THE ESTATE. 

25 (a) IN GENERAL.— 
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1 (1) DISCLOSURE.—The Judicial Conference of 

2 the United States, in accordance with section 2075 

3 of title 28 of the United States Code and after con4 sideration of the views of the Director of the Execu5 tive Office for United States Trustees, shall propose 

6 amended Federal Rules of Bankruptcy Procedure 

7 and in accordance with rule 9009 of the Federal 

8 Rules of Bankruptcy Procedure shall prescribe offi9 cial bankruptcy forms directing debtors under chap10 ter 11 of title 11 of United States Code, to disclose 

11 the information described in paragraph (2) by filing 

12 and serving periodic financial and other reports de13 signed to provide such information. 

14 (2) INFORMATION.—The information referred 

15 to in paragraph (1) is the value, operations, and 

16 profitability of any closely held corporation, partner17 ship, or of any other entity in which the debtor holds 

18 a substantial or controlling interest. 

19 (b) PURPOSE.—The purpose of the rules and reports 

20 under subsection (a) shall be to assist parties in interest 

21 taking steps to ensure that the debtor’s interest in any 

22 entity referred to in subsection (a)(2) is used for the pay23 ment of allowed claims against debtor. 
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1 Subtitle B—Small Business 

2 Bankruptcy Provisions 

3 SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT 

4 AND PLAN. 

5 Section 1125 of title 11, United States Code, is 

6 amended— 

7 (1) in subsection (a)(1), by inserting before the 

8 semicolon ‘‘and in determining whether a disclosure 

9 statement provides adequate information, the court 

10 shall consider the complexity of the case, the benefit 

11 of additional information to creditors and other par12 ties in interest, and the cost of providing additional 

13 information’’; and 

14 (2) by striking subsection (f), and inserting the 

15 following: 

16 ‘‘(f) Notwithstanding subsection (b), in a small busi17 ness case— 

18 ‘‘(1) the court may determine that the plan 

19 itself provides adequate information and that a sepa20 rate disclosure statement is not necessary; 

21 ‘‘(2) the court may approve a disclosure state22 ment submitted on standard forms approved by the 

23 court or adopted under section 2075 of title 28; and 
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1 ‘‘(3)(A) the court may conditionally approve a 

2 disclosure statement subject to final approval after 

3 notice and a hearing; 

4 ‘‘(B) acceptances and rejections of a plan may 

5 be solicited based on a conditionally approved disclo6 sure statement if the debtor provides adequate infor7 mation to each holder of a claim or interest that is 

8 solicited, but a conditionally approved disclosure 

9 statement shall be mailed not later than 25 days be10 fore the date of the hearing on confirmation of the 

11 plan; and 

12 ‘‘(C) the hearing on the disclosure statement 

13 may be combined with the hearing on confirmation 

14 of a plan.’’. 

15 SEC. 432. DEFINITIONS. 

16 (a) DEFINITIONS.—Section 101 of title 11, United 

17 States Code, is amended by striking paragraph (51C) and 

18 inserting the following: 

19 ‘‘(51C) ‘small business case’ means a case filed 

20 under chapter 11 of this title in which the debtor is 

21 a small business debtor; 

22 ‘‘(51D) ‘small business debtor’— 

23 ‘‘(A) subject to subparagraph (B), means a 

24 person engaged in commercial or business ac25 tivities (including any affiliate of such person 
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1 that is also a debtor under this title and exclud2 ing a person whose primary activity is the busi3 ness of owning or operating real property or ac4 tivities incidental thereto) that has aggregate 

5 noncontingent liquidated secured and unsecured 

6 debts as of the date of the petition or the date 

7 of the order for relief in an amount not more 

8 than $2,000,000 (excluding debts owed to 1 or 

9 more affiliates or insiders) for a case in which 

10 the United States trustee has not appointed 

11 under section 1102(a)(1) a committee of unse12 cured creditors or where the court has deter13 mined that the committee of unsecured credi14 tors is not sufficiently active and representative 

15 to provide effective oversight of the debtor; and 

16 ‘‘(B) does not include any member of a 

17 group of affiliated debtors that has aggregate 

18 noncontingent liquidated secured and unsecured 

19 debts in an amount greater than $2,000,000 

20 (excluding debt owed to 1 or more affiliates or 

21 insiders);’’. 

22 (b) CONFORMING AMENDMENT.—Section 1102(a)(3) 

23 of title 11, United States Code, is amended by inserting 

24 ‘‘debtor’’ after ‘‘small business’’. 
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1 (c) ADJUSTMENT OF DOLLAR AMOUNTS.—Section 

2 104(b) of title 11, United States Code, as amended by 

3 section 226, is amended by inserting ‘‘101(51D),’’ after 

4 ‘‘101(3),’’ each place it appears. 

5 SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND 

6 PLAN. 

7 Within a reasonable period of time after the date of 

8 enactment of this Act, the Judicial Conference of the 

9 United States shall prescribe in accordance with rule 9009 

10 of the Federal Rules of Bankruptcy Procedure official 

11 standard form disclosure statements and plans of reorga12 nization for small business debtors (as defined in section 

13 101 of title 11, United States Code, as amended by this 

14 Act), designed to achieve a practical balance between— 

15 (1) the reasonable needs of the courts, the 

16 United States trustee, creditors, and other parties in 

17 interest for reasonably complete information; and 

18 (2) economy and simplicity for debtors. 

19 SEC. 434. UNIFORM NATIONAL REPORTING REQUIRE20 MENTS. 

21 (a) REPORTING REQUIRED.— 

22 (1) IN GENERAL.—Chapter 3 of title 11, United 

23 States Code, is amended by inserting after section 

24 307 the following: 
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1 ‘‘§ 308. Debtor reporting requirements 

2 ‘‘(a) For purposes of this section, the term ‘profit3 ability’ means, with respect to a debtor, the amount of 

4 money that the debtor has earned or lost during current 

5 and recent fiscal periods. 

6 ‘‘(b) A small business debtor shall file periodic finan7 cial and other reports containing information including— 

8 ‘‘(1) the debtor’s profitability; 

9 ‘‘(2) reasonable approximations of the debtor’s 

10 projected cash receipts and cash disbursements over 

11 a reasonable period; 

12 ‘‘(3) comparisons of actual cash receipts and 

13 disbursements with projections in prior reports; 

14 ‘‘(4)(A) whether the debtor is— 

15 ‘‘(i) in compliance in all material respects 

16 with postpetition requirements imposed by this 

17 title and the Federal Rules of Bankruptcy Pro18 cedure; and 

19 ‘‘(ii) timely filing tax returns and other re20 quired government filings and paying taxes and 

21 other administrative expenses when due; 

22 ‘‘(B) if the debtor is not in compliance with the 

23 requirements referred to in subparagraph (A)(i) or 

24 filing tax returns and other required government fil25 ings and making the payments referred to in sub26 paragraph (A)(ii), what the failures are and how, at 
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1 what cost, and when the debtor intends to remedy 

2 such failures; and 

3 ‘‘(C) such other matters as are in the best in4 terests of the debtor and creditors, and in the public 

5 interest in fair and efficient procedures under chap6 ter 11 of this title.’’. 

7 (2) CLERICAL AMENDMENT.—The table of sec8 tions for chapter 3 of title 11, United States Code, 

9 is amended by inserting after the item relating to 

10 section 307 the following: 

‘‘308. Debtor reporting requirements.’’. 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 subsection (a) shall take effect 60 days after the date on 

13 which rules are prescribed under section 2075 of title 28, 

14 United States Code, to establish forms to be used to com15 ply with section 308 of title 11, United States Code, as 

16 added by subsection (a). 

17 SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR 

18 SMALL BUSINESS CASES. 

19 (a) PROPOSAL OF RULES AND FORMS.—The Judicial 

20 Conference of the United States shall propose in accord21 ance with section 2073 of title 28 of the United States 

22 Code amended Federal Rules of Bankruptcy Procedure, 

23 and shall prescribe in accordance with rule 9009 of the 

24 Federal Rules of Bankruptcy Procedure official bank25 ruptcy forms, directing small business debtors to file peri-
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1 odic financial and other reports containing information, 

2 including information relating to— 

3 (1) the debtor’s profitability; 

4 (2) the debtor’s cash receipts and disburse5 ments; and 

6 (3) whether the debtor is timely filing tax re7 turns and paying taxes and other administrative ex8 penses when due. 

9 (b) PURPOSE.—The rules and forms proposed under 

10 subsection (a) shall be designed to achieve a practical bal11 ance among— 

12 (1) the reasonable needs of the bankruptcy 

13 court, the United States trustee, creditors, and other 

14 parties in interest for reasonably complete informa15 tion; 

16 (2) a small business debtor’s interest that re17 quired reports be easy and inexpensive to complete; 

18 and 

19 (3) the interest of all parties that the required 

20 reports help such debtor to understand such debtor’s 

21 financial condition and plan the such debtor’s fu22 ture. 

23 SEC. 436. DUTIES IN SMALL BUSINESS CASES. 

24 (a) DUTIES IN CHAPTER 11 CASES.—Subchapter I 

25 of chapter 11 of title 11, United States Code, as amended 
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1 by section 321, is amended by adding at the end the fol2 lowing: 

3 ‘‘§ 1116. Duties of trustee or debtor in possession in 

4 small business cases 

5 ‘‘In a small business case, a trustee or the debtor in 

6 possession, in addition to the duties provided in this title 

7 and as otherwise required by law, shall— 

8 ‘‘(1) append to the voluntary petition or, in an 

9 involuntary case, file not later than 7 days after the 

10 date of the order for relief— 

11 ‘‘(A) its most recent balance sheet, state12 ment of operations, cash-flow statement, and 

13 Federal income tax return; or 

14 ‘‘(B) a statement made under penalty of 

15 perjury that no balance sheet, statement of op16 erations, or cash-flow statement has been pre17 pared and no Federal tax return has been filed; 

18 ‘‘(2) attend, through its senior management 

19 personnel and counsel, meetings scheduled by the 

20 court or the United States trustee, including initial 

21 debtor interviews, scheduling conferences, and meet22 ings of creditors convened under section 341 unless 

23 the court, after notice and a hearing, waives that re24 quirement upon a finding of extraordinary and com25 pelling circumstances; 
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1 ‘‘(3) timely file all schedules and statements of 

2 financial affairs, unless the court, after notice and a 

3 hearing, grants an extension, which shall not extend 

4 such time period to a date later than 30 days after 

5 the date of the order for relief, absent extraordinary 

6 and compelling circumstances; 

7 ‘‘(4) file all postpetition financial and other re8 ports required by the Federal Rules of Bankruptcy 

9 Procedure or by local rule of the district court; 

10 ‘‘(5) subject to section 363(c)(2), maintain in11 surance customary and appropriate to the industry; 

12 ‘‘(6)(A) timely file tax returns and other re13 quired government filings; and 

14 ‘‘(B) subject to section 363(c)(2), timely pay all 

15 taxes entitled to administrative expense priority ex16 cept those being contested by appropriate pro17 ceedings being diligently prosecuted; and 

18 ‘‘(7) allow the United States trustee, or a des19 ignated representative of the United States trustee, 

20 to inspect the debtor’s business premises, books, and 

21 records at reasonable times, after reasonable prior 

22 written notice, unless notice is waived by the debt23 or.’’. 

24 (b) CLERICAL AMENDMENT.—The table of sections 

25 for chapter 11 of title 11, United States Code, as amended 
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1 by section 321, is amended by inserting after the item re2 lating to section 1115 the following: 

‘‘1116. Duties of trustee or debtor in possession in small business cases.’’. 

3 SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES. 

4 Section 1121 of title 11, United States Code, is 

5 amended by striking subsection (e) and inserting the fol6 lowing: 

7 ‘‘(e) In a small business case— 

8 ‘‘(1) only the debtor may file a plan until after 

9 180 days after the date of the order for relief, unless 

10 that period is— 

11 ‘‘(A) extended as provided by this sub12 section, after notice and a hearing; or 

13 ‘‘(B) the court, for cause, orders otherwise; 

14 ‘‘(2) the plan and a disclosure statement (if 

15 any) shall be filed not later than 300 days after the 

16 date of the order for relief; and 

17 ‘‘(3) the time periods specified in paragraphs 

18 (1) and (2), and the time fixed in section 1129(e) 

19 within which the plan shall be confirmed, may be ex20 tended only if— 

21 ‘‘(A) the debtor, after providing notice to 

22 parties in interest (including the United States 

23 trustee), demonstrates by a preponderance of 

24 the evidence that it is more likely than not that 
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1 the court will confirm a plan within a reason2 able period of time; 

3 ‘‘(B) a new deadline is imposed at the time 

4 the extension is granted; and 

5 ‘‘(C) the order extending time is signed be6 fore the existing deadline has expired.’’. 

7 SEC. 438. PLAN CONFIRMATION DEADLINE. 

8 Section 1129 of title 11, United States Code, is 

9 amended by adding at the end the following: 

10 ‘‘(e) In a small business case, the court shall confirm 

11 a plan that complies with the applicable provisions of this 

12 title and that is filed in accordance with section 1121(e) 

13 not later than 45 days after the plan is filed unless the 

14 time for confirmation is extended in accordance with sec15 tion 1121(e)(3).’’. 

16 SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE. 

17 Section 586(a) of title 28, United States Code, is 

18 amended— 

19 (1) in paragraph (3)— 

20 (A) in subparagraph (G), by striking 

21 ‘‘and’’ at the end; 

22 (B) by redesignating subparagraph (H) as 

23 subparagraph (I); and 

24 (C) by inserting after subparagraph (G) 

25 the following: 
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1 ‘‘(H) in small business cases (as defined in 

2 section 101 of title 11), performing the addi3 tional duties specified in title 11 pertaining to 

4 such cases; and’’; 

5 (2) in paragraph (5), by striking ‘‘and’’ at the 

6 end; 

7 (3) in paragraph (6), by striking the period at 

8 the end and inserting a semicolon; and 

9 (4) by adding at the end the following: 

10 ‘‘(7) in each of such small business cases— 

11 ‘‘(A) conduct an initial debtor interview as 

12 soon as practicable after the date of the order 

13 for relief but before the first meeting scheduled 

14 under section 341(a) of title 11, at which time 

15 the United States trustee shall— 

16 ‘‘(i) begin to investigate the debtor’s 

17 viability; 

18 ‘‘(ii) inquire about the debtor’s busi19 ness plan; 

20 ‘‘(iii) explain the debtor’s obligations 

21 to file monthly operating reports and other 

22 required reports; 

23 ‘‘(iv) attempt to develop an agreed 

24 scheduling order; and 
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1 ‘‘(v) inform the debtor of other obliga2 tions; 

3 ‘‘(B) if determined to be appropriate and 

4 advisable, visit the appropriate business prem5 ises of the debtor, ascertain the state of the 

6 debtor’s books and records, and verify that the 

7 debtor has filed its tax returns; and 

8 ‘‘(C) review and monitor diligently the 

9 debtor’s activities, to identify as promptly as 

10 possible whether the debtor will be unable to 

11 confirm a plan; and 

12 ‘‘(8) in any case in which the United States 

13 trustee finds material grounds for any relief under 

14 section 1112 of title 11, the United States trustee 

15 shall apply promptly after making that finding to 

16 the court for relief.’’. 

17 SEC. 440. SCHEDULING CONFERENCES. 

18 Section 105(d) of title 11, United States Code, is 

19 amended— 

20 (1) in the matter preceding paragraph (1), by 

21 striking ‘‘, may’’; and 

22 (2) by striking paragraph (1) and inserting the 

23 following: 
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1 ‘‘(1) shall hold such status conferences as are 

2 necessary to further the expeditious and economical 

3 resolution of the case; and’’. 

4 SEC. 441. SERIAL FILER PROVISIONS. 

5 Section 362 of title 11, United States Code, as 

6 amended by sections 106, 305, and 311, is amended— 

7 (1) in subsection (k), as so redesignated by sec8 tion 305— 

9 (A) by striking ‘‘An’’ and inserting ‘‘(1) 

10 Except as provided in paragraph (2), an’’; and 

11 (B) by adding at the end the following: 

12 ‘‘(2) If such violation is based on an action taken by 

13 an entity in the good faith belief that subsection (h) ap14 plies to the debtor, the recovery under paragraph (1) of 

15 this subsection against such entity shall be limited to ac16 tual damages.’’; and 

17 (2) by adding at the end the following: 

18 ‘‘(n)(1) Except as provided in paragraph (2), sub19 section (a) does not apply in a case in which the debtor— 

20 ‘‘(A) is a debtor in a small business case pend21 ing at the time the petition is filed; 

22 ‘‘(B) was a debtor in a small business case that 

23 was dismissed for any reason by an order that be24 came final in the 2-year period ending on the date 
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1 of the order for relief entered with respect to the pe2 tition; 

3 ‘‘(C) was a debtor in a small business case in 

4 which a plan was confirmed in the 2-year period 

5 ending on the date of the order for relief entered 

6 with respect to the petition; or 

7 ‘‘(D) is an entity that has acquired substan8 tially all of the assets or business of a small business 

9 debtor described in subparagraph (A), (B), or (C), 

10 unless such entity establishes by a preponderance of 

11 the evidence that such entity acquired substantially 

12 all of the assets or business of such small business 

13 debtor in good faith and not for the purpose of evad14 ing this paragraph. 

15 ‘‘(2) Paragraph (1) does not apply— 

16 ‘‘(A) to an involuntary case involving no collu17 sion by the debtor with creditors; or 

18 ‘‘(B) to the filing of a petition if— 

19 ‘‘(i) the debtor proves by a preponderance 

20 of the evidence that the filing of the petition re21 sulted from circumstances beyond the control of 

22 the debtor not foreseeable at the time the case 

23 then pending was filed; and 

24 ‘‘(ii) it is more likely than not that the 

25 court will confirm a feasible plan, but not a liq-
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1 uidating plan, within a reasonable period of 

2 time.’’. 

3 SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON4 VERSION AND APPOINTMENT OF TRUSTEE. 

5 (a) EXPANDED GROUNDS FOR DISMISSAL OR CON6 VERSION.—Section 1112 of title 11, United States Code, 

7 is amended by striking subsection (b) and inserting the 

8 following: 

9 ‘‘(b)(1) Except as provided in paragraph (2) of this 

10 subsection, subsection (c) of this section, and section 

11 1104(a)(3), on request of a party in interest, and after 

12 notice and a hearing, absent unusual circumstances spe13 cifically identified by the court that establish that the re14 quested conversion or dismissal is not in the best interests 

15 of creditors and the estate, the court shall convert a case 

16 under this chapter to a case under chapter 7 or dismiss 

17 a case under this chapter, whichever is in the best inter18 ests of creditors and the estate, if the movant establishes 

19 cause. 

20 ‘‘(2) The relief provided in paragraph (1) shall not 

21 be granted absent unusual circumstances specifically iden22 tified by the court that establish that such relief is not 

23 in the best interests of creditors and the estate, if the 

24 debtor or another party in interest objects and establishes 

25 that— 
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1 ‘‘(A) there is a reasonable likelihood that a plan 

2 will be confirmed within the timeframes established 

3 in sections 1121(e) and 1129(e) of this title, or if 

4 such sections do not apply, within a reasonable pe5 riod of time; and 

6 ‘‘(B) the grounds for granting such relief in7 clude an act or omission of the debtor other than 

8 under paragraph (4)(A)— 

9 ‘‘(i) for which there exists a reasonable 

10 justification for the act or omission; and 

11 ‘‘(ii) that will be cured within a reasonable 

12 period of time fixed by the court. 

13 ‘‘(3) The court shall commence the hearing on a mo14 tion under this subsection not later than 30 days after 

15 filing of the motion, and shall decide the motion not later 

16 than 15 days after commencement of such hearing, unless 

17 the movant expressly consents to a continuance for a spe18 cific period of time or compelling circumstances prevent 

19 the court from meeting the time limits established by this 

20 paragraph. 

21 ‘‘(4) For purposes of this subsection, the term ‘cause’ 

22 includes— 

23 ‘‘(A) substantial or continuing loss to or dimi24 nution of the estate and the absence of a reasonable 

25 likelihood of rehabilitation; 
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1 ‘‘(B) gross mismanagement of the estate; 

2 ‘‘(C) failure to maintain appropriate insurance 

3 that poses a risk to the estate or to the public; 

4 ‘‘(D) unauthorized use of cash collateral sub5 stantially harmful to 1 or more creditors; 

6 ‘‘(E) failure to comply with an order of the 

7 court; 

8 ‘‘(F) unexcused failure to satisfy timely any fil9 ing or reporting requirement established by this title 

10 or by any rule applicable to a case under this chap11 ter; 

12 ‘‘(G) failure to attend the meeting of creditors 

13 convened under section 341(a) or an examination or14 dered under rule 2004 of the Federal Rules of 

15 Bankruptcy Procedure without good cause shown by 

16 the debtor; 

17 ‘‘(H) failure timely to provide information or 

18 attend meetings reasonably requested by the United 

19 States trustee (or the bankruptcy administrator, if 

20 any); 

21 ‘‘(I) failure timely to pay taxes owed after the 

22 date of the order for relief or to file tax returns due 

23 after the date of the order for relief; 
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1 ‘‘(J) failure to file a disclosure statement, or to 

2 file or confirm a plan, within the time fixed by this 

3 title or by order of the court; 

4 ‘‘(K) failure to pay any fees or charges required 

5 under chapter 123 of title 28; 

6 ‘‘(L) revocation of an order of confirmation 

7 under section 1144; 

8 ‘‘(M) inability to effectuate substantial con9 summation of a confirmed plan; 

10 ‘‘(N) material default by the debtor with re11 spect to a confirmed plan; 

12 ‘‘(O) termination of a confirmed plan by reason 

13 of the occurrence of a condition specified in the plan; 

14 and 

15 ‘‘(P) failure of the debtor to pay any domestic 

16 support obligation that first becomes payable after 

17 the date of the filing of the petition.’’. 

18 (b) ADDITIONAL GROUNDS FOR APPOINTMENT OF

19 TRUSTEE.—Section 1104(a) of title 11, United States 

20 Code, is amended— 

21 (1) in paragraph (1), by striking ‘‘or’’ at the 

22 end; 

23 (2) in paragraph (2), by striking the period at 

24 the end and inserting ‘‘; or’’; and 

25 (3) by adding at the end the following: 
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1 ‘‘(3) if grounds exist to convert or dismiss the 

2 case under section 1112, but the court determines 

3 that the appointment of a trustee or an examiner is 

4 in the best interests of creditors and the estate.’’. 

5 SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED 

6 STATES CODE, WITH RESPECT TO SMALL 

7 BUSINESSES. 

8 Not later than 2 years after the date of enactment 

9 of this Act, the Administrator of the Small Business Ad10 ministration, in consultation with the Attorney General, 

11 the Director of the Executive Office for United States 

12 Trustees, and the Director of the Administrative Office 

13 of the United States Courts, shall— 

14 (1) conduct a study to determine— 

15 (A) the internal and external factors that 

16 cause small businesses, especially sole propri17 etorships, to become debtors in cases under title 

18 11, United States Code, and that cause certain 

19 small businesses to successfully complete cases 

20 under chapter 11 of such title; and 

21 (B) how Federal laws relating to bank22 ruptcy may be made more effective and efficient 

23 in assisting small businesses to remain viable; 

24 and 
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1 (2) submit to the President pro tempore of the 

2 Senate and the Speaker of the House of Representa3 tives a report summarizing that study. 

4 SEC. 444. PAYMENT OF INTEREST. 

5 Section 362(d)(3) of title 11, United States Code, is 

6 amended— 

7 (1) by inserting ‘‘or 30 days after the court de8 termines that the debtor is subject to this para9 graph, whichever is later’’ after ‘‘90-day period)’’; 

10 and 

11 (2) by striking subparagraph (B) and inserting 

12 the following: 

13 ‘‘(B) the debtor has commenced monthly 

14 payments that— 

15 ‘‘(i) may, in the debtor’s sole discre16 tion, notwithstanding section 363(c)(2), be 

17 made from rents or other income generated 

18 before, on, or after the date of the com19 mencement of the case by or from the 

20 property to each creditor whose claim is se21 cured by such real estate (other than a 

22 claim secured by a judgment lien or by an 

23 unmatured statutory lien); and 

24 ‘‘(ii) are in an amount equal to inter25 est at the then applicable nondefault con-
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1 tract rate of interest on the value of the 

2 creditor’s interest in the real estate; or’’. 

3 SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES. 

4 Section 503(b) of title 11, United States Code, is 

5 amended— 

6 (1) in paragraph (5), by striking ‘‘and’’ at the 

7 end; 

8 (2) in paragraph (6), by striking the period at 

9 the end and inserting a semicolon; and 

10 (3) by adding at the end the following: 

11 ‘‘(7) with respect to a nonresidential real prop12 erty lease previously assumed under section 365, 

13 and subsequently rejected, a sum equal to all mone14 tary obligations due, excluding those arising from or 

15 relating to a failure to operate or a penalty provi16 sion, for the period of 2 years following the later of 

17 the rejection date or the date of actual turnover of 

18 the premises, without reduction or setoff for any 

19 reason whatsoever except for sums actually received 

20 or to be received from an entity other than the debt21 or, and the claim for remaining sums due for the 

22 balance of the term of the lease shall be a claim 

23 under section 502(b)(6);’’. 
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1 SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A 

2 PLAN ADMINISTRATOR OF AN EMPLOYEE 

3 BENEFIT PLAN. 

4 (a) IN GENERAL.—Section 521(a) of title 11, United 

5 States Code, as amended by sections 106 and 304, is 

6 amended— 

7 (1) in paragraph (5), by striking ‘‘and’’ at the 

8 end; 

9 (2) in paragraph (6), by striking the period at 

10 the end and inserting ‘‘; and’’; and 

11 (3) by adding after paragraph (6) the following: 

12 ‘‘(7) unless a trustee is serving in the case, con13 tinue to perform the obligations required of the ad14 ministrator (as defined in section 3 of the Employee 

15 Retirement Income Security Act of 1974) of an em16 ployee benefit plan if at the time of the commence17 ment of the case the debtor (or any entity des18 ignated by the debtor) served as such adminis19 trator.’’. 

20 (b) DUTIES OF TRUSTEES.—Section 704(a) of title 

21 11, United States Code, as amended by sections 102 and 

22 219, is amended— 

23 (1) in paragraph (10), by striking ‘‘and’’ at the 

24 end; and 

25 (2) by adding at the end the following: 
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1 ‘‘(11) if, at the time of the commencement of 

2 the case, the debtor (or any entity designated by the 

3 debtor) served as the administrator (as defined in 

4 section 3 of the Employee Retirement Income Secu5 rity Act of 1974) of an employee benefit plan, con6 tinue to perform the obligations required of the ad7 ministrator; and’’. 

8 (c) CONFORMING AMENDMENT.—Section 1106(a)(1) 

9 of title 11, United States Code, is amended to read as 

10 follows: 

11 ‘‘(1) perform the duties of the trustee, as speci12 fied in paragraphs (2), (5), (7), (8), (9), (10), and 

13 (11) of section 704;’’. 

14 SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EM15 PLOYEES. 

16 Section 1114(d) of title 11, United States Code, is 

17 amended— 

18 (1) by striking ‘‘appoint’’ and inserting ‘‘order 

19 the appointment of’’, and 

20 (2) by adding at the end the following: ‘‘The 

21 United States trustee shall appoint any such com22 mittee.’’. 
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1 TITLE V—MUNICIPAL 

2 BANKRUPTCY PROVISIONS 

3 SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI4 TION. 

5 (a) TECHNICAL AMENDMENT RELATING TO MUNICI6 PALITIES.—Section 921(d) of title 11, United States 

7 Code, is amended by inserting ‘‘notwithstanding section 

8 301(b)’’ before the period at the end. 

9 (b) CONFORMING AMENDMENT.—Section 301 of title 

10 11, United States Code, is amended— 

11 (1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’; 

12 and 

13 (2) by striking the last sentence and inserting 

14 the following: 

15 ‘‘(b) The commencement of a voluntary case under 

16 a chapter of this title constitutes an order for relief under 

17 such chapter.’’. 

18 SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP19 TER 9. 

20 Section 901(a) of title 11, United States Code, is 

21 amended— 

22 (1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and 

23 (2) by inserting ‘‘559, 560, 561, 562,’’ after 

24 ‘‘557,’’. 
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1 TITLE VI—BANKRUPTCY DATA 

2 SEC. 601. IMPROVED BANKRUPTCY STATISTICS. 

3 (a) IN GENERAL.—apter 6 of title 28, United States 

4 Code, is amended by adding at the end the following: 

5 ‘‘§ 159. Bankruptcy statistics 

6 ‘‘(a) The clerk of the district court, or the clerk of 

7 the bankruptcy court if one is certified pursuant to section 

8 156(b) of this title, shall collect statistics regarding debt9 ors who are individuals with primarily consumer debts 

10 seeking relief under chapters 7, 11, and 13 of title 11. 

11 Those statistics shall be in a standardized format pre12 scribed by the Director of the Administrative Office of the 

13 United States Courts (referred to in this section as the 

14 ‘Director’). 

15 ‘‘(b) The Director shall— 

16 ‘‘(1) compile the statistics referred to in sub17 section (a); 

18 ‘‘(2) make the statistics available to the public; 

19 and 

20 ‘‘(3) not later than July 1, 2008, and annually 

21 thereafter, prepare, and submit to Congress a report 

22 concerning the information collected under sub23 section (a) that contains an analysis of the informa24 tion. 
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1 ‘‘(c) The compilation required under subsection (b) 

2 shall— 

3 ‘‘(1) be itemized, by chapter, with respect to 

4 title 11; 

5 ‘‘(2) be presented in the aggregate and for each 

6 district; and 

7 ‘‘(3) include information concerning— 

8 ‘‘(A) the total assets and total liabilities of 

9 the debtors described in subsection (a), and in 

10 each category of assets and liabilities, as re11 ported in the schedules prescribed pursuant to 

12 section 2075 of this title and filed by debtors; 

13 ‘‘(B) the current monthly income, average 

14 income, and average expenses of debtors as re15 ported on the schedules and statements that 

16 each such debtor files under sections 521 and 

17 1322 of title 11; 

18 ‘‘(C) the aggregate amount of debt dis19 charged in cases filed during the reporting pe20 riod, determined as the difference between the 

21 total amount of debt and obligations of a debtor 

22 reported on the schedules and the amount of 

23 such debt reported in categories which are pre24 dominantly nondischargeable; 
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1 ‘‘(D) the average period of time between 

2 the date of the filing of the petition and the 

3 closing of the case for cases closed during the 

4 reporting period; 

5 ‘‘(E) for cases closed during the reporting 

6 period— 

7 ‘‘(i) the number of cases in which a 

8 reaffirmation agreement was filed; and 

9 ‘‘(ii)(I) the total number of reaffirma10 tion agreements filed; 

11 ‘‘(II) of those cases in which a reaffir12 mation agreement was filed, the number of 

13 cases in which the debtor was not rep14 resented by an attorney; and 

15 ‘‘(III) of those cases in which a reaf16 firmation agreement was filed, the number 

17 of cases in which the reaffirmation agree18 ment was approved by the court; 

19 ‘‘(F) with respect to cases filed under 

20 chapter 13 of title 11, for the reporting pe21 riod— 

22 ‘‘(i)(I) the number of cases in which a 

23 final order was entered determining the 

24 value of property securing a claim in an 
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1 amount less than the amount of the claim; 

2 and 

3 ‘‘(II) the number of final orders en4 tered determining the value of property se5 curing a claim; 

6 ‘‘(ii) the number of cases dismissed, 

7 the number of cases dismissed for failure 

8 to make payments under the plan, the 

9 number of cases refiled after dismissal, 

10 and the number of cases in which the plan 

11 was completed, separately itemized with re12 spect to the number of modifications made 

13 before completion of the plan, if any; and 

14 ‘‘(iii) the number of cases in which 

15 the debtor filed another case during the 6- 

16 year period preceding the filing; 

17 ‘‘(G) the number of cases in which credi18 tors were fined for misconduct and any amount 

19 of punitive damages awarded by the court for 

20 creditor misconduct; and 

21 ‘‘(H) the number of cases in which sanc22 tions under rule 9011 of the Federal Rules of 

23 Bankruptcy Procedure were imposed against 

24 debtor’s attorney or damages awarded under 

25 such Rule.’’. 
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1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for chapter 6 of title 28, United States Code, is amended 

3 by adding at the end the following: 

‘‘159. Bankruptcy statistics.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect 18 months after the date of 

6 enactment of this Act. 

7 SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANK8 RUPTCY DATA. 

9 (a) AMENDMENT.—Chapter 39 of title 28, United 

10 States Code, is amended by adding at the end the fol11 lowing: 

12 ‘‘§ 589b. Bankruptcy data 

13 ‘‘(a) RULES.—The Attorney General shall, within a 

14 reasonable time after the effective date of this section, 

15 issue rules requiring uniform forms for (and from time 

16 to time thereafter to appropriately modify and approve)— 

17 ‘‘(1) final reports by trustees in cases under 

18 chapters 7, 12, and 13 of title 11; and 

19 ‘‘(2) periodic reports by debtors in possession or 

20 trustees in cases under chapter 11 of title 11. 

21 ‘‘(b) REPORTS.—Each report referred to in sub22 section (a) shall be designed (and the requirements as to 

23 place and manner of filing shall be established) so as to 

24 facilitate compilation of data and maximum possible ac25 cess of the public, both by physical inspection at one or 
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1 more central filing locations, and by electronic access 

2 through the Internet or other appropriate media. 

3 ‘‘(c) REQUIRED INFORMATION.—The information re4 quired to be filed in the reports referred to in subsection 

5 (b) shall be that which is in the best interests of debtors 

6 and creditors, and in the public interest in reasonable and 

7 adequate information to evaluate the efficiency and practi8 cality of the Federal bankruptcy system. In issuing rules 

9 proposing the forms referred to in subsection (a), the At10 torney General shall strike the best achievable practical 

11 balance between— 

12 ‘‘(1) the reasonable needs of the public for in13 formation about the operational results of the Fed14 eral bankruptcy system; 

15 ‘‘(2) economy, simplicity, and lack of undue 

16 burden on persons with a duty to file reports; and 

17 ‘‘(3) appropriate privacy concerns and safe18 guards. 

19 ‘‘(d) FINAL REPORTS.—The uniform forms for final 

20 reports required under subsection (a) for use by trustees 

21 under chapters 7, 12, and 13 of title 11 shall, in addition 

22 to such other matters as are required by law or as the 

23 Attorney General in the discretion of the Attorney General 

24 shall propose, include with respect to a case under such 

25 title— 
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1 ‘‘(1) information about the length of time the 

2 case was pending; 

3 ‘‘(2) assets abandoned; 

4 ‘‘(3) assets exempted; 

5 ‘‘(4) receipts and disbursements of the estate; 

6 ‘‘(5) expenses of administration, including for 

7 use under section 707(b), actual costs of admin8 istering cases under chapter 13 of title 11; 

9 ‘‘(6) claims asserted; 

10 ‘‘(7) claims allowed; and 

11 ‘‘(8) distributions to claimants and claims dis12 charged without payment, 

13 in each case by appropriate category and, in cases under 

14 chapters 12 and 13 of title 11, date of confirmation of 

15 the plan, each modification thereto, and defaults by the 

16 debtor in performance under the plan. 

17 ‘‘(e) PERIODIC REPORTS.—The uniform forms for 

18 periodic reports required under subsection (a) for use by 

19 trustees or debtors in possession under chapter 11 of title 

20 11 shall, in addition to such other matters as are required 

21 by law or as the Attorney General in the discretion of the 

22 Attorney General shall propose, include— 

23 ‘‘(1) information about the industry classifica24 tion, published by the Department of Commerce, for 

25 the businesses conducted by the debtor; 
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1 ‘‘(2) length of time the case has been pending; 

2 ‘‘(3) number of full-time employees as of the 

3 date of the order for relief and at the end of each 

4 reporting period since the case was filed; 

5 ‘‘(4) cash receipts, cash disbursements and 

6 profitability of the debtor for the most recent period 

7 and cumulatively since the date of the order for re8 lief; 

9 ‘‘(5) compliance with title 11, whether or not 

10 tax returns and tax payments since the date of the 

11 order for relief have been timely filed and made; 

12 ‘‘(6) all professional fees approved by the court 

13 in the case for the most recent period and cumula14 tively since the date of the order for relief (sepa15 rately reported, for the professional fees incurred by 

16 or on behalf of the debtor, between those that would 

17 have been incurred absent a bankruptcy case and 

18 those not); and 

19 ‘‘(7) plans of reorganization filed and confirmed 

20 and, with respect thereto, by class, the recoveries of 

21 the holders, expressed in aggregate dollar values 

22 and, in the case of claims, as a percentage of total 

23 claims of the class allowed.’’. 
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1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for chapter 39 of title 28, United States Code, is amended 

3 by adding at the end the following: 

‘‘589b. Bankruptcy data.’’. 

4 SEC. 603. AUDIT PROCEDURES. 

5 (a) IN GENERAL.— 

6 (1) ESTABLISHMENT OF PROCEDURES.—The 

7 Attorney General (in judicial districts served by 

8 United States trustees) and the Judicial Conference 

9 of the United States (in judicial districts served by 

10 bankruptcy administrators) shall establish proce11 dures to determine the accuracy, veracity, and com12 pleteness of petitions, schedules, and other informa13 tion that the debtor is required to provide under sec14 tions 521 and 1322 of title 11, United States Code, 

15 and, if applicable, section 111 of such title, in cases 

16 filed under chapter 7 or 13 of such title in which the 

17 debtor is an individual. Such audits shall be in ac18 cordance with generally accepted auditing standards 

19 and performed by independent certified public ac20 countants or independent licensed public account21 ants, provided that the Attorney General and the 

22 Judicial Conference, as appropriate, may develop al23 ternative auditing standards not later than 2 years 

24 after the date of enactment of this Act. 
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1 (2) PROCEDURES.—Those procedures required 

2 by paragraph (1) shall— 

3 (A) establish a method of selecting appro4 priate qualified persons to contract to perform 

5 those audits; 

6 (B) establish a method of randomly select7 ing cases to be audited, except that not less 

8 than 1 out of every 250 cases in each Federal 

9 judicial district shall be selected for audit; 

10 (C) require audits of schedules of income 

11 and expenses that reflect greater than average 

12 variances from the statistical norm of the dis13 trict in which the schedules were filed if those 

14 variances occur by reason of higher income or 

15 higher expenses than the statistical norm of the 

16 district in which the schedules were filed; and 

17 (D) establish procedures for providing, not 

18 less frequently than annually, public informa19 tion concerning the aggregate results of such 

20 audits including the percentage of cases, by dis21 trict, in which a material misstatement of in22 come or expenditures is reported. 

23 (b) AMENDMENTS.—Section 586 of title 28, United 

24 States Code, is amended— 
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1 (1) in subsection (a), by striking paragraph (6) 

2 and inserting the following: 

3 ‘‘(6) make such reports as the Attorney General 

4 directs, including the results of audits performed 

5 under section 603(a) of the Bankruptcy Abuse Pre6 vention and Consumer Protection Act of 2005;’’; and 

7 (2) by adding at the end the following: 

8 ‘‘(f)(1) The United States trustee for each district is 

9 authorized to contract with auditors to perform audits in 

10 cases designated by the United States trustee, in accord11 ance with the procedures established under section 603(a) 

12 of the Bankruptcy Abuse Prevention and Consumer Pro13 tection Act of 2005. 

14 ‘‘(2)(A) The report of each audit referred to in para15 graph (1) shall be filed with the court and transmitted 

16 to the United States trustee. Each report shall clearly and 

17 conspicuously specify any material misstatement of income 

18 or expenditures or of assets identified by the person per19 forming the audit. In any case in which a material 

20 misstatement of income or expenditures or of assets has 

21 been reported, the clerk of the district court (or the clerk 

22 of the bankruptcy court if one is certified under section 

23 156(b) of this title) shall give notice of the misstatement 

24 to the creditors in the case. 
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1 ‘‘(B) If a material misstatement of income or expend2 itures or of assets is reported, the United States trustee 

3 shall— 

4 ‘‘(i) report the material misstatement, if appro5 priate, to the United States Attorney pursuant to 

6 section 3057 of title 18; and 

7 ‘‘(ii) if advisable, take appropriate action, in8 cluding but not limited to commencing an adversary 

9 proceeding to revoke the debtor’s discharge pursuant 

10 to section 727(d) of title 11.’’. 

11 (c) AMENDMENTS TO SECTION 521 OF TITLE 11, 

12 U.S.C.—Section 521(a) of title 11, United States Code, 

13 as so designated by section 106, is amended in each of 

14 paragraphs (3) and (4) by inserting ‘‘or an auditor serving 

15 under section 586(f) of title 28’’ after ‘‘serving in the 

16 case’’. 

17 (d) AMENDMENTS TO SECTION 727 OF TITLE 11, 

18 U.S.C.—Section 727(d) of title 11, United States Code, 

19 is amended— 

20 (1) in paragraph (2), by striking ‘‘or’’ at the 

21 end; 

22 (2) in paragraph (3), by striking the period at 

23 the end and inserting ‘‘; or’’; and 

24 (3) by adding at the end the following: 
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1 ‘‘(4) the debtor has failed to explain satisfac2 torily— 

3 ‘‘(A) a material misstatement in an audit 

4 referred to in section 586(f) of title 28; or 

5 ‘‘(B) a failure to make available for inspec6 tion all necessary accounts, papers, documents, 

7 financial records, files, and all other papers, 

8 things, or property belonging to the debtor that 

9 are requested for an audit referred to in section 

10 586(f) of title 28.’’. 

11 (e) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect 18 months after the date of 

13 enactment of this Act. 

14 SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY 

15 OF BANKRUPTCY DATA. 

16 It is the sense of Congress that— 

17 (1) the national policy of the United States 

18 should be that all data held by bankruptcy clerks in 

19 electronic form, to the extent such data reflects only 

20 public records (as defined in section 107 of title 11, 

21 United States Code), should be released in a usable 

22 electronic form in bulk to the public, subject to such 

23 appropriate privacy concerns and safeguards as Con24 gress and the Judicial Conference of the United 

25 States may determine; and 
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1 (2) there should be established a bankruptcy 

2 data system in which— 

3 (A) a single set of data definitions and 

4 forms are used to collect data nationwide; and 

5 (B) data for any particular bankruptcy 

6 case are aggregated in the same electronic 

7 record. 

8 TITLE VII—BANKRUPTCY TAX 

9 PROVISIONS 

10 SEC. 701. TREATMENT OF CERTAIN LIENS. 

11 (a) TREATMENT OF CERTAIN LIENS.—Section 724 

12 of title 11, United States Code, is amended— 

13 (1) in subsection (b), in the matter preceding 

14 paragraph (1), by inserting ‘‘(other than to the ex15 tent that there is a properly perfected unavoidable 

16 tax lien arising in connection with an ad valorem tax 

17 on real or personal property of the estate)’’ after 

18 ‘‘under this title’’; 

19 (2) in subsection (b)(2), by inserting ‘‘(except 

20 that such expenses, other than claims for wages, sal21 aries, or commissions that arise after the date of the 

22 filing of the petition, shall be limited to expenses in23 curred under chapter 7 of this title and shall not in24 clude expenses incurred under chapter 11 of this 

25 title)’’ after ‘‘507(a)(1)’’; and 
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1 (3) by adding at the end the following: 

2 ‘‘(e) Before subordinating a tax lien on real or per3 sonal property of the estate, the trustee shall— 

4 ‘‘(1) exhaust the unencumbered assets of the 

5 estate; and 

6 ‘‘(2) in a manner consistent with section 

7 506(c), recover from property securing an allowed 

8 secured claim the reasonable, necessary costs and 

9 expenses of preserving or disposing of such property. 

10 ‘‘(f) Notwithstanding the exclusion of ad valorem tax 

11 liens under this section and subject to the requirements 

12 of subsection (e), the following may be paid from property 

13 of the estate which secures a tax lien, or the proceeds of 

14 such property: 

15 ‘‘(1) Claims for wages, salaries, and commis16 sions that are entitled to priority under section 

17 507(a)(4). 

18 ‘‘(2) Claims for contributions to an employee 

19 benefit plan entitled to priority under section 

20 507(a)(5).’’. 

21 (b) DETERMINATION OF TAX LIABILITY.—Section 

22 505(a)(2) of title 11, United States Code, is amended— 

23 (1) in subparagraph (A), by striking ‘‘or’’ at 

24 the end; 
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1 (2) in subparagraph (B), by striking the period 

2 at the end and inserting ‘‘; or’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(C) the amount or legality of any amount aris5 ing in connection with an ad valorem tax on real or 

6 personal property of the estate, if the applicable pe7 riod for contesting or redetermining that amount 

8 under any law (other than a bankruptcy law) has ex9 pired.’’. 

10 SEC. 702. TREATMENT OF FUEL TAX CLAIMS. 

11 Section 501 of title 11, United States Code, is 

12 amended by adding at the end the following: 

13 ‘‘(e) A claim arising from the liability of a debtor for 

14 fuel use tax assessed consistent with the requirements of 

15 section 31705 of title 49 may be filed by the base jurisdic16 tion designated pursuant to the International Fuel Tax 

17 Agreement (as defined in section 31701 of title 49) and, 

18 if so filed, shall be allowed as a single claim.’’. 

19 SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF 

20 TAXES. 

21 Section 505(b) of title 11, United States Code, is 

22 amended— 

23 (1) in the first sentence, by inserting ‘‘at the 

24 address and in the manner designated in paragraph 

25 (1)’’ after ‘‘determination of such tax’’; 
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1 (2) by striking ‘‘(1) upon payment’’ and insert2 ing ‘‘(A) upon payment’’; 

3 (3) by striking ‘‘(A) such governmental unit’’ 

4 and inserting ‘‘(i) such governmental unit’’; 

5 (4) by striking ‘‘(B) such governmental unit’’ 

6 and inserting ‘‘(ii) such governmental unit’’; 

7 (5) by striking ‘‘(2) upon payment’’ and insert8 ing ‘‘(B) upon payment’’; 

9 (6) by striking ‘‘(3) upon payment’’ and insert10 ing ‘‘(C) upon payment’’; 

11 (7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and 

12 (8) by inserting before paragraph (2), as so 

13 designated, the following: 

14 ‘‘(b)(1)(A) The clerk shall maintain a list under 

15 which a Federal, State, or local governmental unit respon16 sible for the collection of taxes within the district may— 

17 ‘‘(i) designate an address for service of requests 

18 under this subsection; and 

19 ‘‘(ii) describe where further information con20 cerning additional requirements for filing such re21 quests may be found. 

22 ‘‘(B) If such governmental unit does not designate 

23 an address and provide such address to the clerk under 

24 subparagraph (A), any request made under this subsection 

25 may be served at the address for the filing of a tax return 
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1 or protest with the appropriate taxing authority of such 

2 governmental unit.’’. 

3 SEC. 704. RATE OF INTEREST ON TAX CLAIMS. 

4 (a) IN GENERAL.—Subchapter I of chapter 5 of title 

5 11, United States Code, is amended by adding at the end 

6 the following: 

7 ‘‘§ 511. Rate of interest on tax claims 

8 ‘‘(a) If any provision of this title requires the pay9 ment of interest on a tax claim or on an administrative 

10 expense tax, or the payment of interest to enable a creditor 

11 to receive the present value of the allowed amount of a 

12 tax claim, the rate of interest shall be the rate determined 

13 under applicable nonbankruptcy law. 

14 ‘‘(b) In the case of taxes paid under a confirmed plan 

15 under this title, the rate of interest shall be determined 

16 as of the calendar month in which the plan is confirmed.’’. 

17 (b) CLERICAL AMENDMENT.—The table of sections 

18 for subchapter I of chapter 5 of title 11, United States 

19 Code, is amended by adding at the end the following: 

‘‘511. Rate of interest on tax claims.’’. 

20 SEC. 705. PRIORITY OF TAX CLAIMS. 

21 Section 507(a)(8) of title 11, United States Code, is 

22 amended— 

23 (1) in subparagraph (A)— 

24 (A) in the matter preceding clause (i), by 

25 inserting ‘‘for a taxable year ending on or be-
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1 fore the date of the filing of the petition’’ after 

2 ‘‘gross receipts’’; 

3 (B) in clause (i), by striking ‘‘for a taxable 

4 year ending on or before the date of the filing 

5 of the petition’’; and 

6 (C) by striking clause (ii) and inserting the 

7 following: 

8 ‘‘(ii) assessed within 240 days before 

9 the date of the filing of the petition, exclu10 sive of— 

11 ‘‘(I) any time during which an 

12 offer in compromise with respect to 

13 that tax was pending or in effect dur14 ing that 240-day period, plus 30 days; 

15 and 

16 ‘‘(II) any time during which a 

17 stay of proceedings against collections 

18 was in effect in a prior case under 

19 this title during that 240-day period, 

20 plus 90 days.’’; and 

21 (2) by adding at the end the following: 

22 ‘‘An otherwise applicable time period specified in 

23 this paragraph shall be suspended for any period 

24 during which a governmental unit is prohibited 

25 under applicable nonbankruptcy law from collecting 
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1 a tax as a result of a request by the debtor for a 

2 hearing and an appeal of any collection action taken 

3 or proposed against the debtor, plus 90 days; plus 

4 any time during which the stay of proceedings was 

5 in effect in a prior case under this title or during 

6 which collection was precluded by the existence of 1 

7 or more confirmed plans under this title, plus 90 

8 days.’’. 

9 SEC. 706. PRIORITY PROPERTY TAXES INCURRED. 

10 Section 507(a)(8)(B) of title 11, United States Code, 

11 is amended by striking ‘‘assessed’’ and inserting ‘‘in12 curred’’. 

13 SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP14 TER 13. 

15 Section 1328(a)(2) of title 11, United States Code, 

16 as amended by section 314, is amended by striking ‘‘para17 graph’’ and inserting ‘‘section 507(a)(8)(C) or in para18 graph (1)(B), (1)(C),’’. 

19 SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP20 TER 11. 

21 Section 1141(d) of title 11, United States Code, as 

22 amended by sections 321 and 330, is amended by adding 

23 at the end the following: 
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1 ‘‘(6) Notwithstanding paragraph (1), the confirma2 tion of a plan does not discharge a debtor that is a cor3 poration from any debt— 

4 ‘‘(A) of a kind specified in paragraph (2)(A) or 

5 (2)(B) of section 523(a) that is owed to a domestic 

6 governmental unit, or owed to a person as the result 

7 of an action filed under subchapter III of chapter 37 

8 of title 31 or any similar State statute; or 

9 ‘‘(B) for a tax or customs duty with respect to 

10 which the debtor— 

11 ‘‘(i) made a fraudulent return; or 

12 ‘‘(ii) willfully attempted in any manner to 

13 evade or to defeat such tax or such customs 

14 duty.’’. 

15 SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO 

16 PREPETITION TAXES. 

17 Section 362(a)(8) of title 11, United States Code, is 

18 amended by striking ‘‘the debtor’’ and inserting ‘‘a cor19 porate debtor’s tax liability for a taxable period the bank20 ruptcy court may determine or concerning the tax liability 

21 of a debtor who is an individual for a taxable period end22 ing before the date of the order for relief under this title’’. 
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1 SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 

2 CASES. 

3 Section 1129(a)(9) of title 11, United States Code, 

4 is amended— 

5 (1) in subparagraph (B), by striking ‘‘and’’ at 

6 the end; 

7 (2) in subparagraph (C), by striking ‘‘deferred 

8 cash payments,’’ and all that follows through the 

9 end of the subparagraph, and inserting ‘‘regular in10 stallment payments in cash— 

11 ‘‘(i) of a total value, as of the effective 

12 date of the plan, equal to the allowed 

13 amount of such claim; 

14 ‘‘(ii) over a period ending not later 

15 than 5 years after the date of the order for 

16 relief under section 301, 302, or 303; and 

17 ‘‘(iii) in a manner not less favorable 

18 than the most favored nonpriority unse19 cured claim provided for by the plan (other 

20 than cash payments made to a class of 

21 creditors under section 1122(b)); and’’; 

22 and 

23 (3) by adding at the end the following: 

24 ‘‘(D) with respect to a secured claim which 

25 would otherwise meet the description of an un26 secured claim of a governmental unit under sec-
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1 tion 507(a)(8), but for the secured status of 

2 that claim, the holder of that claim will receive 

3 on account of that claim, cash payments, in the 

4 same manner and over the same period, as pre5 scribed in subparagraph (C).’’. 

6 SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB7 ITED. 

8 Section 545(2) of title 11, United States Code, is 

9 amended by inserting before the semicolon at the end the 

10 following: ‘‘, except in any case in which a purchaser is 

11 a purchaser described in section 6323 of the Internal Rev12 enue Code of 1986, or in any other similar provision of 

13 State or local law’’. 

14 SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSI15 NESS. 

16 (a) PAYMENT OF TAXES REQUIRED.—Section 960 of 

17 title 28, United States Code, is amended— 

18 (1) by inserting ‘‘(a)’’ before ‘‘Any’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(b) A tax under subsection (a) shall be paid on or 

21 before the due date of the tax under applicable nonbank22 ruptcy law, unless— 

23 ‘‘(1) the tax is a property tax secured by a lien 

24 against property that is abandoned under section 

25 554 of title 11, within a reasonable period of time 
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1 after the lien attaches, by the trustee in a case 

2 under title 11; or 

3 ‘‘(2) payment of the tax is excused under a spe4 cific provision of title 11. 

5 ‘‘(c) In a case pending under chapter 7 of title 11, 

6 payment of a tax may be deferred until final distribution 

7 is made under section 726 of title 11, if— 

8 ‘‘(1) the tax was not incurred by a trustee duly 

9 appointed or elected under chapter 7 of title 11; or 

10 ‘‘(2) before the due date of the tax, an order of 

11 the court makes a finding of probable insufficiency 

12 of funds of the estate to pay in full the administra13 tive expenses allowed under section 503(b) of title 

14 11 that have the same priority in distribution under 

15 section 726(b) of title 11 as the priority of that 

16 tax.’’. 

17 (b) PAYMENT OF AD VALOREM TAXES REQUIRED.— 

18 Section 503(b)(1)(B)(i) of title 11, United States Code, 

19 is amended by inserting ‘‘whether secured or unsecured, 

20 including property taxes for which liability is in rem, in 

21 personam, or both,’’ before ‘‘except’’. 

22 (c) REQUEST FOR PAYMENT OF ADMINISTRATIVE

23 EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of 

24 title 11, United States Code, is amended— 
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1 (1) in subparagraph (B), by striking ‘‘and’’ at 

2 the end; 

3 (2) in subparagraph (C), by adding ‘‘and’’ at 

4 the end; and 

5 (3) by adding at the end the following: 

6 ‘‘(D) notwithstanding the requirements of sub7 section (a), a governmental unit shall not be re8 quired to file a request for the payment of an ex9 pense described in subparagraph (B) or (C), as a 

10 condition of its being an allowed administrative ex11 pense;’’. 

12 (d) PAYMENT OF TAXES AND FEES AS SECURED

13 CLAIMS.—Section 506 of title 11, United States Code, is 

14 amended— 

15 (1) in subsection (b), by inserting ‘‘or State 

16 statute’’ after ‘‘agreement’’; and 

17 (2) in subsection (c), by inserting ‘‘, including 

18 the payment of all ad valorem property taxes with 

19 respect to the property’’ before the period at the 

20 end. 

21 SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS. 

22 Section 726(a)(1) of title 11, United States Code, is 

23 amended by striking ‘‘before the date on which the trustee 

24 commences distribution under this section;’’ and inserting 

25 the following: ‘‘on or before the earlier of— 
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1 ‘‘(A) the date that is 10 days after the 

2 mailing to creditors of the summary of the 

3 trustee’s final report; or 

4 ‘‘(B) the date on which the trustee com5 mences final distribution under this section;’’. 

6 SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU7 THORITIES. 

8 Section 523(a) of title 11, United States Code, as 

9 amended by sections 215 and 224, is amended— 

10 (1) in paragraph (1)(B)— 

11 (A) in the matter preceding clause (i), by 

12 inserting ‘‘or equivalent report or notice,’’ after 

13 ‘‘a return,’’; 

14 (B) in clause (i), by inserting ‘‘or given’’ 

15 after ‘‘filed’’; and 

16 (C) in clause (ii)— 

17 (i) by inserting ‘‘or given’’ after 

18 ‘‘filed’’; and 

19 (ii) by inserting ‘‘, report, or notice’’ 

20 after ‘‘return’’; and 

21 (2) by adding at the end the following: 

22 ‘‘For purposes of this subsection, the term ‘return’ means 

23 a return that satisfies the requirements of applicable non24 bankruptcy law (including applicable filing requirements). 

25 Such term includes a return prepared pursuant to section 
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1 6020(a) of the Internal Revenue Code of 1986, or similar 

2 State or local law, or a written stipulation to a judgment 

3 or a final order entered by a nonbankruptcy tribunal, but 

4 does not include a return made pursuant to section 

5 6020(b) of the Internal Revenue Code of 1986, or a simi6 lar State or local law.’’. 

7 SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN8 PAID TAXES. 

9 Section 505(b)(2) of title 11, United States Code, as 

10 amended by section 703, is amended by inserting ‘‘the es11 tate,’’ after ‘‘misrepresentation,’’. 

12 SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CON13 FIRM CHAPTER 13 PLANS. 

14 (a) FILING OF PREPETITION TAX RETURNS RE15 QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of 

16 title 11, United States Code, as amended by sections 102, 

17 213, and 306, is amended by inserting after paragraph 

18 (8) the following: 

19 ‘‘(9) the debtor has filed all applicable Federal, 

20 State, and local tax returns as required by section 

21 1308.’’. 

22 (b) ADDITIONAL TIME PERMITTED FOR FILING TAX

23 RETURNS.— 
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1 (1) IN GENERAL.—Subchapter I of chapter 13 

2 of title 11, United States Code, is amended by add3 ing at the end the following: 

4 ‘‘§ 1308. Filing of prepetition tax returns 

5 ‘‘(a) Not later than the day before the date on which 

6 the meeting of the creditors is first scheduled to be held 

7 under section 341(a), if the debtor was required to file 

8 a tax return under applicable nonbankruptcy law, the 

9 debtor shall file with appropriate tax authorities all tax 

10 returns for all taxable periods ending during the 4-year 

11 period ending on the date of the filing of the petition. 

12 ‘‘(b)(1) Subject to paragraph (2), if the tax returns 

13 required by subsection (a) have not been filed by the date 

14 on which the meeting of creditors is first scheduled to be 

15 held under section 341(a), the trustee may hold open that 

16 meeting for a reasonable period of time to allow the debtor 

17 an additional period of time to file any unfiled returns, 

18 but such additional period of time shall not extend be19 yond— 

20 ‘‘(A) for any return that is past due as of the 

21 date of the filing of the petition, the date that is 120 

22 days after the date of that meeting; or 

23 ‘‘(B) for any return that is not past due as of 

24 the date of the filing of the petition, the later of— 
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1 ‘‘(i) the date that is 120 days after the 

2 date of that meeting; or 

3 ‘‘(ii) the date on which the return is due 

4 under the last automatic extension of time for 

5 filing that return to which the debtor is enti6 tled, and for which request is timely made, in 

7 accordance with applicable nonbankruptcy law. 

8 ‘‘(2) After notice and a hearing, and order entered 

9 before the tolling of any applicable filing period deter10 mined under this subsection, if the debtor demonstrates 

11 by a preponderance of the evidence that the failure to file 

12 a return as required under this subsection is attributable 

13 to circumstances beyond the control of the debtor, the 

14 court may extend the filing period established by the trust15 ee under this subsection for— 

16 ‘‘(A) a period of not more than 30 days for re17 turns described in paragraph (1); and 

18 ‘‘(B) a period not to extend after the applicable 

19 extended due date for a return described in para20 graph (2). 

21 ‘‘(c) For purposes of this section, the term ‘return’ 

22 includes a return prepared pursuant to subsection (a) or 

23 (b) of section 6020 of the Internal Revenue Code of 1986, 

24 or a similar State or local law, or a written stipulation 
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1 to a judgment or a final order entered by a nonbankruptcy 

2 tribunal.’’. 

3 (2) CONFORMING AMENDMENT.—The table of 

4 sections for subchapter I of chapter 13 of title 11, 

5 United States Code, is amended by adding at the 

6 end the following: 

‘‘1308. Filing of prepetition tax returns.’’. 

7 (c) DISMISSAL OR CONVERSION ON FAILURE TO

8 COMPLY.—Section 1307 of title 11, United States Code, 

9 is amended— 

10 (1) by redesignating subsections (e) and (f) as 

11 subsections (f) and (g), respectively; and 

12 (2) by inserting after subsection (d) the fol13 lowing: 

14 ‘‘(e) Upon the failure of the debtor to file a tax return 

15 under section 1308, on request of a party in interest or 

16 the United States trustee and after notice and a hearing, 

17 the court shall dismiss a case or convert a case under this 

18 chapter to a case under chapter 7 of this title, whichever 

19 is in the best interest of the creditors and the estate.’’. 

20 (d) TIMELY FILED CLAIMS.—Section 502(b)(9) of 

21 title 11, United States Code, is amended by inserting be22 fore the period at the end the following: ‘‘, and except that 

23 in a case under chapter 13, a claim of a governmental 

24 unit for a tax with respect to a return filed under section 

25 1308 shall be timely if the claim is filed on or before the 
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1 date that is 60 days after the date on which such return 

2 was filed as required’’. 

3 (e) RULES FOR OBJECTIONS TO CLAIMS AND TO

4 CONFIRMATION.—It is the sense of Congress that the Ju5 dicial Conference of the United States should, as soon as 

6 practicable after the date of enactment of this Act, pro7 pose amended Federal Rules of Bankruptcy Procedure 

8 that provide— 

9 (1) notwithstanding the provisions of Rule 

10 3015(f), in cases under chapter 13 of title 11, 

11 United States Code, that an objection to the con12 firmation of a plan filed by a governmental unit on 

13 or before the date that is 60 days after the date on 

14 which the debtor files all tax returns required under 

15 sections 1308 and 1325(a)(7) of title 11, United 

16 States Code, shall be treated for all purposes as if 

17 such objection had been timely filed before such con18 firmation; and 

19 (2) in addition to the provisions of Rule 3007, 

20 in a case under chapter 13 of title 11, United States 

21 Code, that no objection to a claim for a tax with re22 spect to which a return is required to be filed under 

23 section 1308 of title 11, United States Code, shall 

24 be filed until such return has been filed as required. 
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1 SEC. 717. STANDARDS FOR TAX DISCLOSURE. 

2 Section 1125(a)(1) of title 11, United States Code, 

3 is amended— 

4 (1) by inserting ‘‘including a discussion of the 

5 potential material Federal tax consequences of the 

6 plan to the debtor, any successor to the debtor, and 

7 a hypothetical investor typical of the holders of 

8 claims or interests in the case,’’ after ‘‘records,’’; 

9 and 

10 (2) by striking ‘‘a hypothetical reasonable inves11 tor typical of holders of claims or interests’’ and in12 serting ‘‘such a hypothetical investor’’. 

13 SEC. 718. SETOFF OF TAX REFUNDS. 

14 Section 362(b) of title 11, United States Code, as 

15 amended by sections 224, 303, 311, and 401, is amended 

16 by inserting after paragraph (25) the following: 

17 ‘‘(26) under subsection (a), of the setoff under 

18 applicable nonbankruptcy law of an income tax re19 fund, by a governmental unit, with respect to a tax20 able period that ended before the date of the order 

21 for relief against an income tax liability for a taxable 

22 period that also ended before the date of the order 

23 for relief, except that in any case in which the setoff 

24 of an income tax refund is not permitted under ap25 plicable nonbankruptcy law because of a pending ac26 tion to determine the amount or legality of a tax li-
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1 ability, the governmental unit may hold the refund 

2 pending the resolution of the action, unless the 

3 court, on the motion of the trustee and after notice 

4 and a hearing, grants the taxing authority adequate 

5 protection (within the meaning of section 361) for 

6 the secured claim of such authority in the setoff 

7 under section 506(a);’’. 

8 SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREAT9 MENT OF STATE AND LOCAL TAXES. 

10 (a) IN GENERAL.— 

11 (1) SPECIAL PROVISIONS.—Section 346 of title 

12 11, United States Code, is amended to read as fol13 lows: 

14 ‘‘§ 346. Special provisions related to the treatment of 

15 State and local taxes 

16 ‘‘(a) Whenever the Internal Revenue Code of 1986 

17 provides that a separate taxable estate or entity is created 

18 in a case concerning a debtor under this title, and the in19 come, gain, loss, deductions, and credits of such estate 

20 shall be taxed to or claimed by the estate, a separate tax21 able estate is also created for purposes of any State and 

22 local law imposing a tax on or measured by income and 

23 such income, gain, loss, deductions, and credits shall be 

24 taxed to or claimed by the estate and may not be taxed 

25 to or claimed by the debtor. The preceding sentence shall 
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1 not apply if the case is dismissed. The trustee shall make 

2 tax returns of income required under any such State or 

3 local law. 

4 ‘‘(b) Whenever the Internal Revenue Code of 1986 

5 provides that no separate taxable estate shall be created 

6 in a case concerning a debtor under this title, and the in7 come, gain, loss, deductions, and credits of an estate shall 

8 be taxed to or claimed by the debtor, such income, gain, 

9 loss, deductions, and credits shall be taxed to or claimed 

10 by the debtor under a State or local law imposing a tax 

11 on or measured by income and may not be taxed to or 

12 claimed by the estate. The trustee shall make such tax 

13 returns of income of corporations and of partnerships as 

14 are required under any State or local law, but with respect 

15 to partnerships, shall make such returns only to the extent 

16 such returns are also required to be made under such 

17 Code. The estate shall be liable for any tax imposed on 

18 such corporation or partnership, but not for any tax im19 posed on partners or members. 

20 ‘‘(c) With respect to a partnership or any entity treat21 ed as a partnership under a State or local law imposing 

22 a tax on or measured by income that is a debtor in a case 

23 under this title, any gain or loss resulting from a distribu24 tion of property from such partnership, or any distributive 

25 share of any income, gain, loss, deduction, or credit of a 
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1 partner or member that is distributed, or considered dis2 tributed, from such partnership, after the commencement 

3 of the case, is gain, loss, income, deduction, or credit, as 

4 the case may be, of the partner or member, and if such 

5 partner or member is a debtor in a case under this title, 

6 shall be subject to tax in accordance with subsection (a) 

7 or (b). 

8 ‘‘(d) For purposes of any State or local law imposing 

9 a tax on or measured by income, the taxable period of 

10 a debtor in a case under this title shall terminate only 

11 if and to the extent that the taxable period of such debtor 

12 terminates under the Internal Revenue Code of 1986. 

13 ‘‘(e) The estate in any case described in subsection 

14 (a) shall use the same accounting method as the debtor 

15 used immediately before the commencement of the case, 

16 if such method of accounting complies with applicable non17 bankruptcy tax law. 

18 ‘‘(f) For purposes of any State or local law imposing 

19 a tax on or measured by income, a transfer of property 

20 from the debtor to the estate or from the estate to the 

21 debtor shall not be treated as a disposition for purposes 

22 of any provision assigning tax consequences to a disposi23 tion, except to the extent that such transfer is treated as 

24 a disposition under the Internal Revenue Code of 1986. 
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1 ‘‘(g) Whenever a tax is imposed pursuant to a State 

2 or local law imposing a tax on or measured by income pur3 suant to subsection (a) or (b), such tax shall be imposed 

4 at rates generally applicable to the same types of entities 

5 under such State or local law. 

6 ‘‘(h) The trustee shall withhold from any payment of 

7 claims for wages, salaries, commissions, dividends, inter8 est, or other payments, or collect, any amount required 

9 to be withheld or collected under applicable State or local 

10 tax law, and shall pay such withheld or collected amount 

11 to the appropriate governmental unit at the time and in 

12 the manner required by such tax law, and with the same 

13 priority as the claim from which such amount was with14 held or collected was paid. 

15 ‘‘(i)(1) To the extent that any State or local law im16 posing a tax on or measured by income provides for the 

17 carryover of any tax attribute from one taxable period to 

18 a subsequent taxable period, the estate shall succeed to 

19 such tax attribute in any case in which such estate is sub20 ject to tax under subsection (a). 

21 ‘‘(2) After such a case is closed or dismissed, the 

22 debtor shall succeed to any tax attribute to which the es23 tate succeeded under paragraph (1) to the extent con24 sistent with the Internal Revenue Code of 1986. 
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1 ‘‘(3) The estate may carry back any loss or tax at2 tribute to a taxable period of the debtor that ended before 

3 the date of the order for relief under this title to the extent 

4 that— 

5 ‘‘(A) applicable State or local tax law provides 

6 for a carryback in the case of the debtor; and 

7 ‘‘(B) the same or a similar tax attribute may be 

8 carried back by the estate to such a taxable period 

9 of the debtor under the Internal Revenue Code of 

10 1986. 

11 ‘‘(j)(1) For purposes of any State or local law impos12 ing a tax on or measured by income, income is not realized 

13 by the estate, the debtor, or a successor to the debtor by 

14 reason of discharge of indebtedness in a case under this 

15 title, except to the extent, if any, that such income is sub16 ject to tax under the Internal Revenue Code of 1986. 

17 ‘‘(2) Whenever the Internal Revenue Code of 1986 

18 provides that the amount excluded from gross income in 

19 respect of the discharge of indebtedness in a case under 

20 this title shall be applied to reduce the tax attributes of 

21 the debtor or the estate, a similar reduction shall be made 

22 under any State or local law imposing a tax on or meas23 ured by income to the extent such State or local law recog24 nizes such attributes. Such State or local law may also 

25 provide for the reduction of other attributes to the extent 
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1 that the full amount of income from the discharge of in2 debtedness has not been applied. 

3 ‘‘(k)(1) Except as provided in this section and section 

4 505, the time and manner of filing tax returns and the 

5 items of income, gain, loss, deduction, and credit of any 

6 taxpayer shall be determined under applicable nonbank7 ruptcy law. 

8 ‘‘(2) For Federal tax purposes, the provisions of this 

9 section are subject to the Internal Revenue Code of 1986 

10 and other applicable Federal nonbankruptcy law.’’. 

11 (2) CLERICAL AMENDMENT.—The table of sec12 tions for chapter 3 of title 11, United States Code, 

13 is amended by striking the item relating to section 

14 346 and inserting the following: 

‘‘346. Special provisions related to the treatment of State and local taxes.’’. 

15 (b) CONFORMING AMENDMENTS.—Title 11 of the 

16 United States Code is amended— 

17 (1) by striking section 728; 

18 (2) in the table of sections for chapter 7 by 

19 striking the item relating to section 728; 

20 (3) in section 1146— 

21 (A) by striking subsections (a) and (b); 

22 and 

23 (B) by redesignating subsections (c) and 

24 (d) as subsections (a) and (b), respectively; and 

25 (4) in section 1231— 
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1 (A) by striking subsections (a) and (b); 

2 and 

3 (B) by redesignating subsections (c) and 

4 (d) as subsections (a) and (b), respectively. 

5 SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX 

6 RETURNS. 

7 Section 521 of title 11, United States Code, as 

8 amended by sections 106, 225, 305, 315, and 316, is 

9 amended by adding at the end the following: 

10 ‘‘(j)(1) Notwithstanding any other provision of this 

11 title, if the debtor fails to file a tax return that becomes 

12 due after the commencement of the case or to properly 

13 obtain an extension of the due date for filing such return, 

14 the taxing authority may request that the court enter an 

15 order converting or dismissing the case. 

16 ‘‘(2) If the debtor does not file the required return 

17 or obtain the extension referred to in paragraph (1) within 

18 90 days after a request is filed by the taxing authority 

19 under that paragraph, the court shall convert or dismiss 

20 the case, whichever is in the best interests of creditors and 

21 the estate.’’. 
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1 TITLE VIII—ANCILLARY AND 

2 OTHER CROSS-BORDER CASES 

3 SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, 

4 UNITED STATES CODE. 

5 (a) IN GENERAL.—Title 11, United States Code, is 

6 amended by inserting after chapter 13 the following: 

7 ‘‘CHAPTER 15—ANCILLARY AND OTHER 

8 CROSS-BORDER CASES 

‘‘Sec. 

‘‘1501. Purpose and scope of application. 

‘‘SUBCHAPTER I—GENERAL PROVISIONS 

‘‘1502. Definitions. 

‘‘1503. International obligations of the United States. 

‘‘1504. Commencement of ancillary case. 

‘‘1505. Authorization to act in a foreign country. 

‘‘1506. Public policy exception. 

‘‘1507. Additional assistance. 

‘‘1508. Interpretation. 

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND 

CREDITORS TO THE COURT 

‘‘1509. Right of direct access. 

‘‘1510. Limited jurisdiction. 

‘‘1511. Commencement of case under section 301 or 303. 

‘‘1512. Participation of a foreign representative in a case under this title. 

‘‘1513. Access of foreign creditors to a case under this title. 

‘‘1514. Notification to foreign creditors concerning a case under this title. 

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING 

AND RELIEF 

‘‘1515. Application for recognition. 

‘‘1516. Presumptions concerning recognition. 

‘‘1517. Order granting recognition. 

‘‘1518. Subsequent information. 

‘‘1519. Relief that may be granted upon filing petition for recognition. 

‘‘1520. Effects of recognition of a foreign main proceeding. 

‘‘1521. Relief that may be granted upon recognition. 

‘‘1522. Protection of creditors and other interested persons. 

‘‘1523. Actions to avoid acts detrimental to creditors. 

‘‘1524. Intervention by a foreign representative. 

‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND 

FOREIGN REPRESENTATIVES 
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‘‘1525. Cooperation and direct communication between the court and foreign 

courts or foreign representatives. 

‘‘1526. Cooperation and direct communication between the trustee and foreign 

courts or foreign representatives. 

‘‘1527. Forms of cooperation. 

‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 

‘‘1528. Commencement of a case under this title after recognition of a foreign 

main proceeding. 

‘‘1529. Coordination of a case under this title and a foreign proceeding. 

‘‘1530. Coordination of more than 1 foreign proceeding. 

‘‘1531. Presumption of insolvency based on recognition of a foreign main proceeding. 

‘‘1532. Rule of payment in concurrent proceedings. 

1 ‘‘§ 1501. Purpose and scope of application 

2 ‘‘(a) The purpose of this chapter is to incorporate the 

3 Model Law on Cross-Border Insolvency so as to provide 

4 effective mechanisms for dealing with cases of cross-bor5 der insolvency with the objectives of— 

6 ‘‘(1) cooperation between— 

7 ‘‘(A) courts of the United States, United 

8 States trustees, trustees, examiners, debtors, 

9 and debtors in possession; and 

10 ‘‘(B) the courts and other competent au11 thorities of foreign countries involved in cross12 border insolvency cases; 

13 ‘‘(2) greater legal certainty for trade and in14 vestment; 

15 ‘‘(3) fair and efficient administration of cross16 border insolvencies that protects the interests of all 

17 creditors, and other interested entities, including the 

18 debtor; 
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1 ‘‘(4) protection and maximization of the value 

2 of the debtor’s assets; and 

3 ‘‘(5) facilitation of the rescue of financially 

4 troubled businesses, thereby protecting investment 

5 and preserving employment. 

6 ‘‘(b) This chapter applies where— 

7 ‘‘(1) assistance is sought in the United States 

8 by a foreign court or a foreign representative in con9 nection with a foreign proceeding; 

10 ‘‘(2) assistance is sought in a foreign country in 

11 connection with a case under this title; 

12 ‘‘(3) a foreign proceeding and a case under this 

13 title with respect to the same debtor are pending 

14 concurrently; or 

15 ‘‘(4) creditors or other interested persons in a 

16 foreign country have an interest in requesting the 

17 commencement of, or participating in, a case or pro18 ceeding under this title. 

19 ‘‘(c) This chapter does not apply to— 

20 ‘‘(1) a proceeding concerning an entity, other 

21 than a foreign insurance company, identified by ex22 clusion in section 109(b); 

23 ‘‘(2) an individual, or to an individual and such 

24 individual’s spouse, who have debts within the limits 

25 specified in section 109(e) and who are citizens of 
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1 the United States or aliens lawfully admitted for 

2 permanent residence in the United States; or 

3 ‘‘(3) an entity subject to a proceeding under the 

4 Securities Investor Protection Act of 1970, a stock5 broker subject to subchapter III of chapter 7 of this 

6 title, or a commodity broker subject to subchapter 

7 IV of chapter 7 of this title. 

8 ‘‘(d) The court may not grant relief under this chap9 ter with respect to any deposit, escrow, trust fund, or 

10 other security required or permitted under any applicable 

11 State insurance law or regulation for the benefit of claim 

12 holders in the United States. 

13 ‘‘SUBCHAPTER I—GENERAL PROVISIONS 

14 ‘‘§ 1502. Definitions 

15 ‘‘For the purposes of this chapter, the term— 

16 ‘‘(1) ‘debtor’ means an entity that is the subject 

17 of a foreign proceeding; 

18 ‘‘(2) ‘establishment’ means any place of oper19 ations where the debtor carries out a nontransitory 

20 economic activity; 

21 ‘‘(3) ‘foreign court’ means a judicial or other 

22 authority competent to control or supervise a foreign 

23 proceeding; 
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1 ‘‘(4) ‘foreign main proceeding’ means a foreign 

2 proceeding pending in the country where the debtor 

3 has the center of its main interests; 

4 ‘‘(5) ‘foreign nonmain proceeding’ means a for5 eign proceeding, other than a foreign main pro6 ceeding, pending in a country where the debtor has 

7 an establishment; 

8 ‘‘(6) ‘trustee’ includes a trustee, a debtor in 

9 possession in a case under any chapter of this title, 

10 or a debtor under chapter 9 of this title; 

11 ‘‘(7) ‘recognition’ means the entry of an order 

12 granting recognition of a foreign main proceeding or 

13 foreign nonmain proceeding under this chapter; and 

14 ‘‘(8) ‘within the territorial jurisdiction of the 

15 United States’, when used with reference to property 

16 of a debtor, refers to tangible property located with17 in the territory of the United States and intangible 

18 property deemed under applicable nonbankruptcy 

19 law to be located within that territory, including any 

20 property subject to attachment or garnishment that 

21 may properly be seized or garnished by an action in 

22 a Federal or State court in the United States. 

23 ‘‘§ 1503. International obligations of the United States 

24 ‘‘To the extent that this chapter conflicts with an ob25 ligation of the United States arising out of any treaty or 
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1 other form of agreement to which it is a party with one 

2 or more other countries, the requirements of the treaty 

3 or agreement prevail. 

4 ‘‘§ 1504. Commencement of ancillary case 

5 ‘‘A case under this chapter is commenced by the filing 

6 of a petition for recognition of a foreign proceeding under 

7 section 1515. 

8 ‘‘§ 1505. Authorization to act in a foreign country 

9 ‘‘A trustee or another entity (including an examiner) 

10 may be authorized by the court to act in a foreign country 

11 on behalf of an estate created under section 541. An entity 

12 authorized to act under this section may act in any way 

13 permitted by the applicable foreign law. 

14 ‘‘§ 1506. Public policy exception 

15 ‘‘Nothing in this chapter prevents the court from re16 fusing to take an action governed by this chapter if the 

17 action would be manifestly contrary to the public policy 

18 of the United States. 

19 ‘‘§ 1507. Additional assistance 

20 ‘‘(a) Subject to the specific limitations stated else21 where in this chapter the court, if recognition is granted, 

22 may provide additional assistance to a foreign representa23 tive under this title or under other laws of the United 

24 States. 
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1 ‘‘(b) In determining whether to provide additional as2 sistance under this title or under other laws of the United 

3 States, the court shall consider whether such additional 

4 assistance, consistent with the principles of comity, will 

5 reasonably assure— 

6 ‘‘(1) just treatment of all holders of claims 

7 against or interests in the debtor’s property; 

8 ‘‘(2) protection of claim holders in the United 

9 States against prejudice and inconvenience in the 

10 processing of claims in such foreign proceeding; 

11 ‘‘(3) prevention of preferential or fraudulent 

12 dispositions of property of the debtor; 

13 ‘‘(4) distribution of proceeds of the debtor’s 

14 property substantially in accordance with the order 

15 prescribed by this title; and 

16 ‘‘(5) if appropriate, the provision of an oppor17 tunity for a fresh start for the individual that such 

18 foreign proceeding concerns. 

19 ‘‘§ 1508. Interpretation 

20 ‘‘In interpreting this chapter, the court shall consider 

21 its international origin, and the need to promote an appli22 cation of this chapter that is consistent with the applica23 tion of similar statutes adopted by foreign jurisdictions. 
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1 ‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP2 RESENTATIVES AND CREDITORS TO THE 

3 COURT 

4 ‘‘§ 1509. Right of direct access 

5 ‘‘(a) A foreign representative may commence a case 

6 under section 1504 by filing directly with the court a peti7 tion for recognition of a foreign proceeding under section 

8 1515. 

9 ‘‘(b) If the court grants recognition under section 

10 1517, and subject to any limitations that the court may 

11 impose consistent with the policy of this chapter— 

12 ‘‘(1) the foreign representative has the capacity 

13 to sue and be sued in a court in the United States; 

14 ‘‘(2) the foreign representative may apply di15 rectly to a court in the United States for appropriate 

16 relief in that court; and 

17 ‘‘(3) a court in the United States shall grant 

18 comity or cooperation to the foreign representative. 

19 ‘‘(c) A request for comity or cooperation by a foreign 

20 representative in a court in the United States other than 

21 the court which granted recognition shall be accompanied 

22 by a certified copy of an order granting recognition under 

23 section 1517. 

24 ‘‘(d) If the court denies recognition under this chap25 ter, the court may issue any appropriate order necessary 
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1 to prevent the foreign representative from obtaining com2 ity or cooperation from courts in the United States. 

3 ‘‘(e) Whether or not the court grants recognition, and 

4 subject to sections 306 and 1510, a foreign representative 

5 is subject to applicable nonbankruptcy law. 

6 ‘‘(f) Notwithstanding any other provision of this sec7 tion, the failure of a foreign representative to commence 

8 a case or to obtain recognition under this chapter does 

9 not affect any right the foreign representative may have 

10 to sue in a court in the United States to collect or recover 

11 a claim which is the property of the debtor. 

12 ‘‘§ 1510. Limited jurisdiction 

13 ‘‘The sole fact that a foreign representative files a 

14 petition under section 1515 does not subject the foreign 

15 representative to the jurisdiction of any court in the 

16 United States for any other purpose. 

17 ‘‘§ 1511. Commencement of case under section 301 or 

18 303 

19 ‘‘(a) Upon recognition, a foreign representative may 

20 commence— 

21 ‘‘(1) an involuntary case under section 303; or 

22 ‘‘(2) a voluntary case under section 301 or 302, 

23 if the foreign proceeding is a foreign main pro24 ceeding. 
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1 ‘‘(b) The petition commencing a case under sub2 section (a) must be accompanied by a certified copy of 

3 an order granting recognition. The court where the peti4 tion for recognition has been filed must be advised of the 

5 foreign representative’s intent to commence a case under 

6 subsection (a) prior to such commencement. 

7 ‘‘§ 1512. Participation of a foreign representative in a 

8 case under this title 

9 ‘‘Upon recognition of a foreign proceeding, the for10 eign representative in the recognized proceeding is entitled 

11 to participate as a party in interest in a case regarding 

12 the debtor under this title. 

13 ‘‘§ 1513. Access of foreign creditors to a case under 

14 this title 

15 ‘‘(a) Foreign creditors have the same rights regarding 

16 the commencement of, and participation in, a case under 

17 this title as domestic creditors. 

18 ‘‘(b)(1) Subsection (a) does not change or codify 

19 present law as to the priority of claims under section 507 

20 or 726, except that the claim of a foreign creditor under 

21 those sections shall not be given a lower priority than that 

22 of general unsecured claims without priority solely because 

23 the holder of such claim is a foreign creditor. 

24 ‘‘(2)(A) Subsection (a) and paragraph (1) do not 

25 change or codify present law as to the allowability of for-
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1 eign revenue claims or other foreign public law claims in 

2 a proceeding under this title. 

3 ‘‘(B) Allowance and priority as to a foreign tax claim 

4 or other foreign public law claim shall be governed by any 

5 applicable tax treaty of the United States, under the con6 ditions and circumstances specified therein. 

7 ‘‘§ 1514. Notification to foreign creditors concerning a 

8 case under this title 

9 ‘‘(a) Whenever in a case under this title notice is to 

10 be given to creditors generally or to any class or category 

11 of creditors, such notice shall also be given to the known 

12 creditors generally, or to creditors in the notified class or 

13 category, that do not have addresses in the United States. 

14 The court may order that appropriate steps be taken with 

15 a view to notifying any creditor whose address is not yet 

16 known. 

17 ‘‘(b) Such notification to creditors with foreign ad18 dresses described in subsection (a) shall be given individ19 ually, unless the court considers that, under the cir20 cumstances, some other form of notification would be 

21 more appropriate. No letter or other formality is required. 

22 ‘‘(c) When a notification of commencement of a case 

23 is to be given to foreign creditors, such notification shall— 
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1 ‘‘(1) indicate the time period for filing proofs of 

2 claim and specify the place for filing such proofs of 

3 claim; 

4 ‘‘(2) indicate whether secured creditors need to 

5 file proofs of claim; and 

6 ‘‘(3) contain any other information required to 

7 be included in such notification to creditors under 

8 this title and the orders of the court. 

9 ‘‘(d) Any rule of procedure or order of the court as 

10 to notice or the filing of a proof of claim shall provide 

11 such additional time to creditors with foreign addresses 

12 as is reasonable under the circumstances. 

13 ‘‘SUBCHAPTER III—RECOGNITION OF A 

14 FOREIGN PROCEEDING AND RELIEF 

15 ‘‘§ 1515. Application for recognition 

16 ‘‘(a) A foreign representative applies to the court for 

17 recognition of a foreign proceeding in which the foreign 

18 representative has been appointed by filing a petition for 

19 recognition. 

20 ‘‘(b) A petition for recognition shall be accompanied 

21 by— 

22 ‘‘(1) a certified copy of the decision com23 mencing such foreign proceeding and appointing the 

24 foreign representative; 
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1 ‘‘(2) a certificate from the foreign court affirm2 ing the existence of such foreign proceeding and of 

3 the appointment of the foreign representative; or 

4 ‘‘(3) in the absence of evidence referred to in 

5 paragraphs (1) and (2), any other evidence accept6 able to the court of the existence of such foreign 

7 proceeding and of the appointment of the foreign 

8 representative. 

9 ‘‘(c) A petition for recognition shall also be accom10 panied by a statement identifying all foreign proceedings 

11 with respect to the debtor that are known to the foreign 

12 representative. 

13 ‘‘(d) The documents referred to in paragraphs (1) 

14 and (2) of subsection (b) shall be translated into English. 

15 The court may require a translation into English of addi16 tional documents. 

17 ‘‘§ 1516. Presumptions concerning recognition 

18 ‘‘(a) If the decision or certificate referred to in section 

19 1515(b) indicates that the foreign proceeding is a foreign 

20 proceeding and that the person or body is a foreign rep21 resentative, the court is entitled to so presume. 

22 ‘‘(b) The court is entitled to presume that documents 

23 submitted in support of the petition for recognition are 

24 authentic, whether or not they have been legalized. 
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1 ‘‘(c) In the absence of evidence to the contrary, the 

2 debtor’s registered office, or habitual residence in the case 

3 of an individual, is presumed to be the center of the debt4 or’s main interests. 

5 ‘‘§ 1517. Order granting recognition 

6 ‘‘(a) Subject to section 1506, after notice and a hear7 ing, an order recognizing a foreign proceeding shall be en8 tered if— 

9 ‘‘(1) such foreign proceeding for which recogni10 tion is sought is a foreign main proceeding or for11 eign nonmain proceeding within the meaning of sec12 tion 1502; 

13 ‘‘(2) the foreign representative applying for rec14 ognition is a person or body; and 

15 ‘‘(3) the petition meets the requirements of sec16 tion 1515. 

17 ‘‘(b) Such foreign proceeding shall be recognized— 

18 ‘‘(1) as a foreign main proceeding if it is pend19 ing in the country where the debtor has the center 

20 of its main interests; or 

21 ‘‘(2) as a foreign nonmain proceeding if the 

22 debtor has an establishment within the meaning of 

23 section 1502 in the foreign country where the pro24 ceeding is pending. 
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1 ‘‘(c) A petition for recognition of a foreign proceeding 

2 shall be decided upon at the earliest possible time. Entry 

3 of an order recognizing a foreign proceeding constitutes 

4 recognition under this chapter. 

5 ‘‘(d) The provisions of this subchapter do not prevent 

6 modification or termination of recognition if it is shown 

7 that the grounds for granting it were fully or partially 

8 lacking or have ceased to exist, but in considering such 

9 action the court shall give due weight to possible prejudice 

10 to parties that have relied upon the order granting rec11 ognition. A case under this chapter may be closed in the 

12 manner prescribed under section 350. 

13 ‘‘§ 1518. Subsequent information 

14 ‘‘From the time of filing the petition for recognition 

15 of a foreign proceeding, the foreign representative shall 

16 file with the court promptly a notice of change of status 

17 concerning— 

18 ‘‘(1) any substantial change in the status of 

19 such foreign proceeding or the status of the foreign 

20 representative’s appointment; and 

21 ‘‘(2) any other foreign proceeding regarding the 

22 debtor that becomes known to the foreign represent23 ative. 
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1 ‘‘§ 1519. Relief that may be granted upon filing peti2 tion for recognition 

3 ‘‘(a) From the time of filing a petition for recognition 

4 until the court rules on the petition, the court may, at 

5 the request of the foreign representative, where relief is 

6 urgently needed to protect the assets of the debtor or the 

7 interests of the creditors, grant relief of a provisional na8 ture, including— 

9 ‘‘(1) staying execution against the debtor’s as10 sets; 

11 ‘‘(2) entrusting the administration or realiza12 tion of all or part of the debtor’s assets located in 

13 the United States to the foreign representative or 

14 another person authorized by the court, including an 

15 examiner, in order to protect and preserve the value 

16 of assets that, by their nature or because of other 

17 circumstances, are perishable, susceptible to devalu18 ation or otherwise in jeopardy; and 

19 ‘‘(3) any relief referred to in paragraph (3), 

20 (4), or (7) of section 1521(a). 

21 ‘‘(b) Unless extended under section 1521(a)(6), the 

22 relief granted under this section terminates when the peti23 tion for recognition is granted. 

24 ‘‘(c) It is a ground for denial of relief under this sec25 tion that such relief would interfere with the administra26 tion of a foreign main proceeding. 
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1 ‘‘(d) The court may not enjoin a police or regulatory 

2 act of a governmental unit, including a criminal action or 

3 proceeding, under this section. 

4 ‘‘(e) The standards, procedures, and limitations ap5 plicable to an injunction shall apply to relief under this 

6 section. 

7 ‘‘(f) The exercise of rights not subject to the stay 

8 arising under section 362(a) pursuant to paragraph (6), 

9 (7), (17), or (27) of section 362(b) or pursuant to section 

10 362(n) shall not be stayed by any order of a court or ad11 ministrative agency in any proceeding under this chapter. 

12 ‘‘§ 1520. Effects of recognition of a foreign main pro13 ceeding 

14 ‘‘(a) Upon recognition of a foreign proceeding that 

15 is a foreign main proceeding— 

16 ‘‘(1) sections 361 and 362 apply with respect to 

17 the debtor and the property of the debtor that is 

18 within the territorial jurisdiction of the United 

19 States; 

20 ‘‘(2) sections 363, 549, and 552 apply to a 

21 transfer of an interest of the debtor in property that 

22 is within the territorial jurisdiction of the United 

23 States to the same extent that the sections would 

24 apply to property of an estate; 
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1 ‘‘(3) unless the court orders otherwise, the for2 eign representative may operate the debtor’s busi3 ness and may exercise the rights and powers of a 

4 trustee under and to the extent provided by sections 

5 363 and 552; and 

6 ‘‘(4) section 552 applies to property of the debt7 or that is within the territorial jurisdiction of the 

8 United States. 

9 ‘‘(b) Subsection (a) does not affect the right to com10 mence an individual action or proceeding in a foreign 

11 country to the extent necessary to preserve a claim against 

12 the debtor. 

13 ‘‘(c) Subsection (a) does not affect the right of a for14 eign representative or an entity to file a petition com15 mencing a case under this title or the right of any party 

16 to file claims or take other proper actions in such a case. 

17 ‘‘§ 1521. Relief that may be granted upon recognition 

18 ‘‘(a) Upon recognition of a foreign proceeding, wheth19 er main or nonmain, where necessary to effectuate the 

20 purpose of this chapter and to protect the assets of the 

21 debtor or the interests of the creditors, the court may, at 

22 the request of the foreign representative, grant any appro23 priate relief, including— 

24 ‘‘(1) staying the commencement or continuation 

25 of an individual action or proceeding concerning the 
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1 debtor’s assets, rights, obligations or liabilities to the 

2 extent they have not been stayed under section 

3 1520(a); 

4 ‘‘(2) staying execution against the debtor’s as5 sets to the extent it has not been stayed under sec6 tion 1520(a); 

7 ‘‘(3) suspending the right to transfer, encumber 

8 or otherwise dispose of any assets of the debtor to 

9 the extent this right has not been suspended under 

10 section 1520(a); 

11 ‘‘(4) providing for the examination of witnesses, 

12 the taking of evidence or the delivery of information 

13 concerning the debtor’s assets, affairs, rights, obliga14 tions or liabilities; 

15 ‘‘(5) entrusting the administration or realiza16 tion of all or part of the debtor’s assets within the 

17 territorial jurisdiction of the United States to the 

18 foreign representative or another person, including 

19 an examiner, authorized by the court; 

20 ‘‘(6) extending relief granted under section 

21 1519(a); and 

22 ‘‘(7) granting any additional relief that may be 

23 available to a trustee, except for relief available 

24 under sections 522, 544, 545, 547, 548, 550, and 

25 724(a). 
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1 ‘‘(b) Upon recognition of a foreign proceeding, wheth2 er main or nonmain, the court may, at the request of the 

3 foreign representative, entrust the distribution of all or 

4 part of the debtor’s assets located in the United States 

5 to the foreign representative or another person, including 

6 an examiner, authorized by the court, provided that the 

7 court is satisfied that the interests of creditors in the 

8 United States are sufficiently protected. 

9 ‘‘(c) In granting relief under this section to a rep10 resentative of a foreign nonmain proceeding, the court 

11 must be satisfied that the relief relates to assets that, 

12 under the law of the United States, should be adminis13 tered in the foreign nonmain proceeding or concerns infor14 mation required in that proceeding. 

15 ‘‘(d) The court may not enjoin a police or regulatory 

16 act of a governmental unit, including a criminal action or 

17 proceeding, under this section. 

18 ‘‘(e) The standards, procedures, and limitations ap19 plicable to an injunction shall apply to relief under para20 graphs (1), (2), (3), and (6) of subsection (a). 

21 ‘‘(f) The exercise of rights not subject to the stay 

22 arising under section 362(a) pursuant to paragraph (6), 

23 (7), (17), or (27) of section 362(b) or pursuant to section 

24 362(n) shall not be stayed by any order of a court or ad25 ministrative agency in any proceeding under this chapter. 
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1 ‘‘§ 1522. Protection of creditors and other interested 

2 persons 

3 ‘‘(a) The court may grant relief under section 1519 

4 or 1521, or may modify or terminate relief under sub5 section (c), only if the interests of the creditors and other 

6 interested entities, including the debtor, are sufficiently 

7 protected. 

8 ‘‘(b) The court may subject relief granted under sec9 tion 1519 or 1521, or the operation of the debtor’s busi10 ness under section 1520(a)(3), to conditions it considers 

11 appropriate, including the giving of security or the filing 

12 of a bond. 

13 ‘‘(c) The court may, at the request of the foreign rep14 resentative or an entity affected by relief granted under 

15 section 1519 or 1521, or at its own motion, modify or 

16 terminate such relief. 

17 ‘‘(d) Section 1104(d) shall apply to the appointment 

18 of an examiner under this chapter. Any examiner shall 

19 comply with the qualification requirements imposed on a 

20 trustee by section 322. 

21 ‘‘§ 1523. Actions to avoid acts detrimental to creditors 

22 ‘‘(a) Upon recognition of a foreign proceeding, the 

23 foreign representative has standing in a case concerning 

24 the debtor pending under another chapter of this title to 

25 initiate actions under sections 522, 544, 545, 547, 548, 

26 550, 553, and 724(a). 
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1 ‘‘(b) When a foreign proceeding is a foreign nonmain 

2 proceeding, the court must be satisfied that an action 

3 under subsection (a) relates to assets that, under United 

4 States law, should be administered in the foreign nonmain 

5 proceeding. 

6 ‘‘§ 1524. Intervention by a foreign representative 

7 ‘‘Upon recognition of a foreign proceeding, the for8 eign representative may intervene in any proceedings in 

9 a State or Federal court in the United States in which 

10 the debtor is a party. 

11 ‘‘SUBCHAPTER IV—COOPERATION WITH FOR12 EIGN COURTS AND FOREIGN REPRESENTA13 TIVES 

14 ‘‘§ 1525. Cooperation and direct communication be15 tween the court and foreign courts or for16 eign representatives 

17 ‘‘(a) Consistent with section 1501, the court shall co18 operate to the maximum extent possible with a foreign 

19 court or a foreign representative, either directly or 

20 through the trustee. 

21 ‘‘(b) The court is entitled to communicate directly 

22 with, or to request information or assistance directly from, 

23 a foreign court or a foreign representative, subject to the 

24 rights of a party in interest to notice and participation. 
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1 ‘‘§ 1526. Cooperation and direct communication be2 tween the trustee and foreign courts or 

3 foreign representatives 

4 ‘‘(a) Consistent with section 1501, the trustee or 

5 other person, including an examiner, authorized by the 

6 court, shall, subject to the supervision of the court, cooper7 ate to the maximum extent possible with a foreign court 

8 or a foreign representative. 

9 ‘‘(b) The trustee or other person, including an exam10 iner, authorized by the court is entitled, subject to the su11 pervision of the court, to communicate directly with a for12 eign court or a foreign representative. 

13 ‘‘§ 1527. Forms of cooperation 

14 ‘‘Cooperation referred to in sections 1525 and 1526 

15 may be implemented by any appropriate means, includ16 ing— 

17 ‘‘(1) appointment of a person or body, including 

18 an examiner, to act at the direction of the court; 

19 ‘‘(2) communication of information by any 

20 means considered appropriate by the court; 

21 ‘‘(3) coordination of the administration and su22 pervision of the debtor’s assets and affairs; 

23 ‘‘(4) approval or implementation of agreements 

24 concerning the coordination of proceedings; and 

25 ‘‘(5) coordination of concurrent proceedings re26 garding the same debtor. 
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1 ‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 

2 ‘‘§ 1528. Commencement of a case under this title 

3 after recognition of a foreign main pro4 ceeding 

5 ‘‘After recognition of a foreign main proceeding, a 

6 case under another chapter of this title may be commenced 

7 only if the debtor has assets in the United States. The 

8 effects of such case shall be restricted to the assets of the 

9 debtor that are within the territorial jurisdiction of the 

10 United States and, to the extent necessary to implement 

11 cooperation and coordination under sections 1525, 1526, 

12 and 1527, to other assets of the debtor that are within 

13 the jurisdiction of the court under sections 541(a) of this 

14 title, and 1334(e) of title 28, to the extent that such other 

15 assets are not subject to the jurisdiction and control of 

16 a foreign proceeding that has been recognized under this 

17 chapter. 

18 ‘‘§ 1529. Coordination of a case under this title and a 

19 foreign proceeding 

20 ‘‘If a foreign proceeding and a case under another 

21 chapter of this title are pending concurrently regarding 

22 the same debtor, the court shall seek cooperation and co23 ordination under sections 1525, 1526, and 1527, and the 

24 following shall apply: 
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1 ‘‘(1) If the case in the United States pending 

2 at the time the petition for recognition of such for3 eign proceeding is filed— 

4 ‘‘(A) any relief granted under section 1519 

5 or 1521 must be consistent with the relief 

6 granted in the case in the United States; and 

7 ‘‘(B) section 1520 does not apply even if 

8 such foreign proceeding is recognized as a for9 eign main proceeding. 

10 ‘‘(2) If a case in the United States under this 

11 title commences after recognition, or after the date 

12 of the filing of the petition for recognition, of such 

13 foreign proceeding— 

14 ‘‘(A) any relief in effect under section 

15 1519 or 1521 shall be reviewed by the court 

16 and shall be modified or terminated if incon17 sistent with the case in the United States; and 

18 ‘‘(B) if such foreign proceeding is a foreign 

19 main proceeding, the stay and suspension re20 ferred to in section 1520(a) shall be modified or 

21 terminated if inconsistent with the relief grant22 ed in the case in the United States. 

23 ‘‘(3) In granting, extending, or modifying relief 

24 granted to a representative of a foreign nonmain 

25 proceeding, the court must be satisfied that the re-
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1 lief relates to assets that, under the laws of the 

2 United States, should be administered in the foreign 

3 nonmain proceeding or concerns information re4 quired in that proceeding. 

5 ‘‘(4) In achieving cooperation and coordination 

6 under sections 1528 and 1529, the court may grant 

7 any of the relief authorized under section 305. 

8 ‘‘§ 1530. Coordination of more than 1 foreign pro9 ceeding 

10 ‘‘In matters referred to in section 1501, with respect 

11 to more than 1 foreign proceeding regarding the debtor, 

12 the court shall seek cooperation and coordination under 

13 sections 1525, 1526, and 1527, and the following shall 

14 apply: 

15 ‘‘(1) Any relief granted under section 1519 or 

16 1521 to a representative of a foreign nonmain pro17 ceeding after recognition of a foreign main pro18 ceeding must be consistent with the foreign main 

19 proceeding. 

20 ‘‘(2) If a foreign main proceeding is recognized 

21 after recognition, or after the filing of a petition for 

22 recognition, of a foreign nonmain proceeding, any 

23 relief in effect under section 1519 or 1521 shall be 

24 reviewed by the court and shall be modified or termi-
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1 nated if inconsistent with the foreign main pro2 ceeding. 

3 ‘‘(3) If, after recognition of a foreign nonmain 

4 proceeding, another foreign nonmain proceeding is 

5 recognized, the court shall grant, modify, or termi6 nate relief for the purpose of facilitating coordina7 tion of the proceedings. 

8 ‘‘§ 1531. Presumption of insolvency based on recogni9 tion of a foreign main proceeding 

10 ‘‘In the absence of evidence to the contrary, recogni11 tion of a foreign main proceeding is, for the purpose of 

12 commencing a proceeding under section 303, proof that 

13 the debtor is generally not paying its debts as such debts 

14 become due. 

15 ‘‘§ 1532. Rule of payment in concurrent proceedings 

16 ‘‘Without prejudice to secured claims or rights in 

17 rem, a creditor who has received payment with respect to 

18 its claim in a foreign proceeding pursuant to a law relating 

19 to insolvency may not receive a payment for the same 

20 claim in a case under any other chapter of this title re21 garding the debtor, so long as the payment to other credi22 tors of the same class is proportionately less than the pay23 ment the creditor has already received.’’. 
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1 (b) CLERICAL AMENDMENT.—The table of chapters 

2 for title 11, United States Code, is amended by inserting 

3 after the item relating to chapter 13 the following: 

‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’. 

4 SEC. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, 

5 UNITED STATES CODE. 

6 (a) APPLICABILITY OF CHAPTERS.—Section 103 of 

7 title 11, United States Code, is amended— 

8 (1) in subsection (a), by inserting before the pe9 riod the following: ‘‘, and this chapter, sections 307, 

10 362(n), 555 through 557, and 559 through 562 

11 apply in a case under chapter 15’’; and 

12 (2) by adding at the end the following: 

13 ‘‘(k) Chapter 15 applies only in a case under such 

14 chapter, except that— 

15 ‘‘(1) sections 1505, 1513, and 1514 apply in all 

16 cases under this title; and 

17 ‘‘(2) section 1509 applies whether or not a case 

18 under this title is pending.’’. 

19 (b) DEFINITIONS.—Section 101 of title 11, United 

20 States Code, is amended by striking paragraphs (23) and 

21 (24) and inserting the following: 

22 ‘‘(23) ‘foreign proceeding’ means a collective ju23 dicial or administrative proceeding in a foreign coun24 try, including an interim proceeding, under a law re25 lating to insolvency or adjustment of debt in which 
318 

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1 proceeding the assets and affairs of the debtor are 

2 subject to control or supervision by a foreign court, 

3 for the purpose of reorganization or liquidation; 

4 ‘‘(24) ‘foreign representative’ means a person 

5 or body, including a person or body appointed on an 

6 interim basis, authorized in a foreign proceeding to 

7 administer the reorganization or the liquidation of 

8 the debtor’s assets or affairs or to act as a rep9 resentative of such foreign proceeding;’’. 

10 (c) AMENDMENTS TO TITLE 28, UNITED STATES

11 CODE.— 

12 (1) PROCEDURES.—Section 157(b)(2) of title 

13 28, United States Code, is amended— 

14 (A) in subparagraph (N), by striking 

15 ‘‘and’’ at the end; 

16 (B) in subparagraph (O), by striking the 

17 period at the end and inserting ‘‘; and’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(P) recognition of foreign proceedings 

20 and other matters under chapter 15 of title 

21 11.’’. 

22 (2) BANKRUPTCY CASES AND PROCEEDINGS.— 

23 Section 1334(c) of title 28, United States Code, is 

24 amended by striking ‘‘Nothing in’’ and inserting 
319 

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1 ‘‘Except with respect to a case under chapter 15 of 

2 title 11, nothing in’’. 

3 (3) DUTIES OF TRUSTEES.—Section 586(a)(3) 

4 of title 28, United States Code, is amended by strik5 ing ‘‘or 13’’ and inserting ‘‘13, or 15’’. 

6 (4) VENUE OF CASES ANCILLARY TO FOREIGN

7 PROCEEDINGS.—Section 1410 of title 28, United 

8 States Code, is amended to read as follows: 

9 ‘‘§ 1410. Venue of cases ancillary to foreign pro10 ceedings 

11 ‘‘A case under chapter 15 of title 11 may be com12 menced in the district court of the United States for the 

13 district— 

14 ‘‘(1) in which the debtor has its principal place 

15 of business or principal assets in the United States; 

16 ‘‘(2) if the debtor does not have a place of busi17 ness or assets in the United States, in which there 

18 is pending against the debtor an action or pro19 ceeding in a Federal or State court; or 

20 ‘‘(3) in a case other than those specified in 

21 paragraph (1) or (2), in which venue will be con22 sistent with the interests of justice and the conven23 ience of the parties, having regard to the relief 

24 sought by the foreign representative.’’. 
320 

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1 (d) OTHER SECTIONS OF TITLE 11.—Title 11 of the 

2 United States Code is amended— 

3 (1) in section 109(b), by striking paragraph (3) 

4 and inserting the following: 

5 ‘‘(3)(A) a foreign insurance company, engaged 

6 in such business in the United States; or 

7 ‘‘(B) a foreign bank, savings bank, cooperative 

8 bank, savings and loan association, building and 

9 loan association, or credit union, that has a branch 

10 or agency (as defined in section 1(b) of the Inter11 national Banking Act of 1978 in the United 

12 States.’’; 

13 (2) in section 303, by striking subsection (k); 

14 (3) by striking section 304; 

15 (4) in the table of sections for chapter 3 by 

16 striking the item relating to section 304; 

17 (5) in section 306 by striking ‘‘, 304,’’ each 

18 place it appears; 

19 (6) in section 305(a) by striking paragraph (2) 

20 and inserting the following: 

21 ‘‘(2)(A) a petition under section 1515 for rec22 ognition of a foreign proceeding has been granted; 

23 and 
321 

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1 ‘‘(B) the purposes of chapter 15 of this title 

2 would be best served by such dismissal or suspen3 sion.’’; and 

4 (7) in section 508— 

5 (A) by striking subsection (a); and 

6 (B) in subsection (b), by striking ‘‘(b)’’. 

7 TITLE IX—FINANCIAL 

8 CONTRACT PROVISIONS 

9 SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CON10 SERVATORS OR RECEIVERS OF INSURED DE11 POSITORY INSTITUTIONS. 

12 (a) DEFINITION OF QUALIFIED FINANCIAL CON13 TRACT.— 

14 (1) FDIC-INSURED DEPOSITORY INSTITU15 TIONS.—Section 11(e)(8)(D) of the Federal Deposit 

16 Insurance Act (12 U.S.C. 1821(e)(8)(D)) is amend17 ed— 

18 (A) by striking ‘‘subsection—’’ and insert19 ing ‘‘subsection, the following definitions shall 

20 apply:’’; and 

21 (B) in clause (i), by inserting ‘‘, resolution, 

22 or order’’ after ‘‘any similar agreement that the 

23 Corporation determines by regulation’’. 
322 

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1 (2) INSURED CREDIT UNIONS.—Section 

2 207(c)(8)(D) of the Federal Credit Union Act (12 

3 U.S.C. 1787(c)(8)(D)) is amended— 

4 (A) by striking ‘‘subsection—’’ and insert5 ing ‘‘subsection, the following definitions shall 

6 apply:’’; and 

7 (B) in clause (i), by inserting ‘‘, resolution, 

8 or order’’ after ‘‘any similar agreement that the 

9 Board determines by regulation’’. 

10 (b) DEFINITION OF SECURITIES CONTRACT.— 

11 (1) FDIC-INSURED DEPOSITORY INSTITU12 TIONS.—Section 11(e)(8)(D)(ii) of the Federal De13 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is 

14 amended to read as follows: 

15 ‘‘(ii) SECURITIES CONTRACT.—The 

16 term ‘securities contract’— 

17 ‘‘(I) means a contract for the 

18 purchase, sale, or loan of a security, a 

19 certificate of deposit, a mortgage loan, 

20 or any interest in a mortgage loan, a 

21 group or index of securities, certifi22 cates of deposit, or mortgage loans or 

23 interests therein (including any inter24 est therein or based on the value 

25 thereof) or any option on any of the 
323 

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1 foregoing, including any option to 

2 purchase or sell any such security, 

3 certificate of deposit, mortgage loan, 

4 interest, group or index, or option, 

5 and including any repurchase or re6 verse repurchase transaction on any 

7 such security, certificate of deposit, 

8 mortgage loan, interest, group or 

9 index, or option; 

10 ‘‘(II) does not include any pur11 chase, sale, or repurchase obligation 

12 under a participation in a commercial 

13 mortgage loan unless the Corporation 

14 determines by regulation, resolution, 

15 or order to include any such agree16 ment within the meaning of such 

17 term; 

18 ‘‘(III) means any option entered 

19 into on a national securities exchange 

20 relating to foreign currencies; 

21 ‘‘(IV) means the guarantee by or 

22 to any securities clearing agency of 

23 any settlement of cash, securities, cer24 tificates of deposit, mortgage loans or 

25 interests therein, group or index of se-
324 

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1 curities, certificates of deposit, or 

2 mortgage loans or interests therein 

3 (including any interest therein or 

4 based on the value thereof) or option 

5 on any of the foregoing, including any 

6 option to purchase or sell any such se7 curity, certificate of deposit, mortgage 

8 loan, interest, group or index, or op9 tion; 

10 ‘‘(V) means any margin loan; 

11 ‘‘(VI) means any other agree12 ment or transaction that is similar to 

13 any agreement or transaction referred 

14 to in this clause; 

15 ‘‘(VII) means any combination of 

16 the agreements or transactions re17 ferred to in this clause; 

18 ‘‘(VIII) means any option to 

19 enter into any agreement or trans20 action referred to in this clause; 

21 ‘‘(IX) means a master agreement 

22 that provides for an agreement or 

23 transaction referred to in subclause 

24 (I), (III), (IV), (V), (VI), (VII), or 

25 (VIII), together with all supplements 
325 

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1 to any such master agreement, with2 out regard to whether the master 

3 agreement provides for an agreement 

4 or transaction that is not a securities 

5 contract under this clause, except that 

6 the master agreement shall be consid7 ered to be a securities contract under 

8 this clause only with respect to each 

9 agreement or transaction under the 

10 master agreement that is referred to 

11 in subclause (I), (III), (IV), (V), (VI), 

12 (VII), or (VIII); and 

13 ‘‘(X) means any security agree14 ment or arrangement or other credit 

15 enhancement related to any agree16 ment or transaction referred to in this 

17 clause, including any guarantee or re18 imbursement obligation in connection 

19 with any agreement or transaction re20 ferred to in this clause.’’. 

21 (2) INSURED CREDIT UNIONS.—Section 

22 207(c)(8)(D)(ii) of the Federal Credit Union Act 

23 (12 U.S.C. 1787(c)(8)(D)(ii)) is amended to read as 

24 follows: 
326 

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1 ‘‘(ii) SECURITIES CONTRACT.—The 

2 term ‘securities contract’— 

3 ‘‘(I) means a contract for the 

4 purchase, sale, or loan of a security, a 

5 certificate of deposit, a mortgage loan, 

6 or any interest in a mortgage loan, a 

7 group or index of securities, certifi8 cates of deposit, or mortgage loans or 

9 interests therein (including any inter10 est therein or based on the value 

11 thereof) or any option on any of the 

12 foregoing, including any option to 

13 purchase or sell any such security, 

14 certificate of deposit, mortgage loan, 

15 interest, group or index, or option, 

16 and including any repurchase or re17 verse repurchase transaction on any 

18 such security, certificate of deposit, 

19 mortgage loan, interest, group or 

20 index, or option; 

21 ‘‘(II) does not include any pur22 chase, sale, or repurchase obligation 

23 under a participation in a commercial 

24 mortgage loan unless the Board deter25 mines by regulation, resolution, or 
327 

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1 order to include any such agreement 

2 within the meaning of such term; 

3 ‘‘(III) means any option entered 

4 into on a national securities exchange 

5 relating to foreign currencies; 

6 ‘‘(IV) means the guarantee by or 

7 to any securities clearing agency of 

8 any settlement of cash, securities, cer9 tificates of deposit, mortgage loans or 

10 interests therein, group or index of se11 curities, certificates of deposit, or 

12 mortgage loans or interests therein 

13 (including any interest therein or 

14 based on the value thereof) or option 

15 on any of the foregoing, including any 

16 option to purchase or sell any such se17 curity, certificate of deposit, mortgage 

18 loan, interest, group or index, or op19 tion; 

20 ‘‘(V) means any margin loan; 

21 ‘‘(VI) means any other agree22 ment or transaction that is similar to 

23 any agreement or transaction referred 

24 to in this clause; 
328 

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1 ‘‘(VII) means any combination of 

2 the agreements or transactions re3 ferred to in this clause; 

4 ‘‘(VIII) means any option to 

5 enter into any agreement or trans6 action referred to in this clause; 

7 ‘‘(IX) means a master agreement 

8 that provides for an agreement or 

9 transaction referred to in subclause 

10 (I), (III), (IV), (V), (VI), (VII), or 

11 (VIII), together with all supplements 

12 to any such master agreement, with13 out regard to whether the master 

14 agreement provides for an agreement 

15 or transaction that is not a securities 

16 contract under this clause, except that 

17 the master agreement shall be consid18 ered to be a securities contract under 

19 this clause only with respect to each 

20 agreement or transaction under the 

21 master agreement that is referred to 

22 in subclause (I), (III), (IV), (V), (VI), 

23 (VII), or (VIII); and 

24 ‘‘(X) means any security agree25 ment or arrangement or other credit 
329 

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1 enhancement related to any agree2 ment or transaction referred to in this 

3 clause, including any guarantee or re4 imbursement obligation in connection 

5 with any agreement or transaction re6 ferred to in this clause.’’. 

7 (c) DEFINITION OF COMMODITY CONTRACT.— 

8 (1) FDIC-INSURED DEPOSITORY INSTITU9 TIONS.—Section 11(e)(8)(D)(iii) of the Federal De10 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is 

11 amended to read as follows: 

12 ‘‘(iii) COMMODITY CONTRACT.—The 

13 term ‘commodity contract’ means— 

14 ‘‘(I) with respect to a futures 

15 commission merchant, a contract for 

16 the purchase or sale of a commodity 

17 for future delivery on, or subject to 

18 the rules of, a contract market or 

19 board of trade; 

20 ‘‘(II) with respect to a foreign fu21 tures commission merchant, a foreign 

22 future; 

23 ‘‘(III) with respect to a leverage 

24 transaction merchant, a leverage 

25 transaction; 
330 

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1 ‘‘(IV) with respect to a clearing 

2 organization, a contract for the pur3 chase or sale of a commodity for fu4 ture delivery on, or subject to the 

5 rules of, a contract market or board 

6 of trade that is cleared by such clear7 ing organization, or commodity option 

8 traded on, or subject to the rules of, 

9 a contract market or board of trade 

10 that is cleared by such clearing orga11 nization; 

12 ‘‘(V) with respect to a commodity 

13 options dealer, a commodity option; 

14 ‘‘(VI) any other agreement or 

15 transaction that is similar to any 

16 agreement or transaction referred to 

17 in this clause; 

18 ‘‘(VII) any combination of the 

19 agreements or transactions referred to 

20 in this clause; 

21 ‘‘(VIII) any option to enter into 

22 any agreement or transaction referred 

23 to in this clause; 

24 ‘‘(IX) a master agreement that 

25 provides for an agreement or trans-
331 

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1 action referred to in subclause (I), 

2 (II), (III), (IV), (V), (VI), (VII), or 

3 (VIII), together with all supplements 

4 to any such master agreement, with5 out regard to whether the master 

6 agreement provides for an agreement 

7 or transaction that is not a com8 modity contract under this clause, ex9 cept that the master agreement shall 

10 be considered to be a commodity con11 tract under this clause only with re12 spect to each agreement or trans13 action under the master agreement 

14 that is referred to in subclause (I), 

15 (II), (III), (IV), (V), (VI), (VII), or 

16 (VIII); or 

17 ‘‘(X) any security agreement or 

18 arrangement or other credit enhance19 ment related to any agreement or 

20 transaction referred to in this clause, 

21 including any guarantee or reimburse22 ment obligation in connection with 

23 any agreement or transaction referred 

24 to in this clause.’’. 
332 

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1 (2) INSURED CREDIT UNIONS.—Section 

2 207(c)(8)(D)(iii) of the Federal Credit Union Act 

3 (12 U.S.C. 1787(c)(8)(D)(iii)) is amended to read as 

4 follows: 

5 ‘‘(iii) COMMODITY CONTRACT.—The 

6 term ‘commodity contract’ means— 

7 ‘‘(I) with respect to a futures 

8 commission merchant, a contract for 

9 the purchase or sale of a commodity 

10 for future delivery on, or subject to 

11 the rules of, a contract market or 

12 board of trade; 

13 ‘‘(II) with respect to a foreign fu14 tures commission merchant, a foreign 

15 future; 

16 ‘‘(III) with respect to a leverage 

17 transaction merchant, a leverage 

18 transaction; 

19 ‘‘(IV) with respect to a clearing 

20 organization, a contract for the pur21 chase or sale of a commodity for fu22 ture delivery on, or subject to the 

23 rules of, a contract market or board 

24 of trade that is cleared by such clear25 ing organization, or commodity option 
333 

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1 traded on, or subject to the rules of, 

2 a contract market or board of trade 

3 that is cleared by such clearing orga4 nization; 

5 ‘‘(V) with respect to a commodity 

6 options dealer, a commodity option; 

7 ‘‘(VI) any other agreement or 

8 transaction that is similar to any 

9 agreement or transaction referred to 

10 in this clause; 

11 ‘‘(VII) any combination of the 

12 agreements or transactions referred to 

13 in this clause; 

14 ‘‘(VIII) any option to enter into 

15 any agreement or transaction referred 

16 to in this clause; 

17 ‘‘(IX) a master agreement that 

18 provides for an agreement or trans19 action referred to in subclause (I), 

20 (II), (III), (IV), (V), (VI), (VII), or 

21 (VIII), together with all supplements 

22 to any such master agreement, with23 out regard to whether the master 

24 agreement provides for an agreement 

25 or transaction that is not a com-
334 

•S 256 RH 

1 modity contract under this clause, ex2 cept that the master agreement shall 

3 be considered to be a commodity con4 tract under this clause only with re5 spect to each agreement or trans6 action under the master agreement 

7 that is referred to in subclause (I), 

8 (II), (III), (IV), (V), (VI), (VII), or 

9 (VIII); or 

10 ‘‘(X) any security agreement or 

11 arrangement or other credit enhance12 ment related to any agreement or 

13 transaction referred to in this clause, 

14 including any guarantee or reimburse15 ment obligation in connection with 

16 any agreement or transaction referred 

17 to in this clause.’’. 

18 (d) DEFINITION OF FORWARD CONTRACT.— 

19 (1) FDIC-INSURED DEPOSITORY INSTITU20 TIONS.—Section 11(e)(8)(D)(iv) of the Federal De21 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is 

22 amended to read as follows: 

23 ‘‘(iv) FORWARD CONTRACT.—The 

24 term ‘forward contract’ means— 
335 

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1 ‘‘(I) a contract (other than a 

2 commodity contract) for the purchase, 

3 sale, or transfer of a commodity or 

4 any similar good, article, service, 

5 right, or interest which is presently or 

6 in the future becomes the subject of 

7 dealing in the forward contract trade, 

8 or product or byproduct thereof, with 

9 a maturity date more than 2 days 

10 after the date the contract is entered 

11 into, including, a repurchase trans12 action, reverse repurchase transaction, 

13 consignment, lease, swap, hedge 

14 transaction, deposit, loan, option, allo15 cated transaction, unallocated trans16 action, or any other similar agree17 ment; 

18 ‘‘(II) any combination of agree19 ments or transactions referred to in 

20 subclauses (I) and (III); 

21 ‘‘(III) any option to enter into 

22 any agreement or transaction referred 

23 to in subclause (I) or (II); 

24 ‘‘(IV) a master agreement that 

25 provides for an agreement or trans-
336 

•S 256 RH 

1 action referred to in subclauses (I), 

2 (II), or (III), together with all supple3 ments to any such master agreement, 

4 without regard to whether the master 

5 agreement provides for an agreement 

6 or transaction that is not a forward 

7 contract under this clause, except that 

8 the master agreement shall be consid9 ered to be a forward contract under 

10 this clause only with respect to each 

11 agreement or transaction under the 

12 master agreement that is referred to 

13 in subclause (I), (II), or (III); or 

14 ‘‘(V) any security agreement or 

15 arrangement or other credit enhance16 ment related to any agreement or 

17 transaction referred to in subclause 

18 (I), (II), (III), or (IV), including any 

19 guarantee or reimbursement obliga20 tion in connection with any agreement 

21 or transaction referred to in any such 

22 subclause.’’. 

23 (2) INSURED CREDIT UNIONS.—Section 

24 207(c)(8)(D)(iv) of the Federal Credit Union Act 
337 

•S 256 RH 

1 (12 U.S.C. 1787(c)(8)(D)(iv)) is amended to read as 

2 follows: 

3 ‘‘(iv) FORWARD CONTRACT.—The 

4 term ‘forward contract’ means— 

5 ‘‘(I) a contract (other than a 

6 commodity contract) for the purchase, 

7 sale, or transfer of a commodity or 

8 any similar good, article, service, 

9 right, or interest which is presently or 

10 in the future becomes the subject of 

11 dealing in the forward contract trade, 

12 or product or byproduct thereof, with 

13 a maturity date more than 2 days 

14 after the date the contract is entered 

15 into, including, a repurchase trans16 action, reverse repurchase transaction, 

17 consignment, lease, swap, hedge 

18 transaction, deposit, loan, option, allo19 cated transaction, unallocated trans20 action, or any other similar agree21 ment; 

22 ‘‘(II) any combination of agree23 ments or transactions referred to in 

24 subclauses (I) and (III); 
338 

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1 ‘‘(III) any option to enter into 

2 any agreement or transaction referred 

3 to in subclause (I) or (II); 

4 ‘‘(IV) a master agreement that 

5 provides for an agreement or trans6 action referred to in subclauses (I), 

7 (II), or (III), together with all supple8 ments to any such master agreement, 

9 without regard to whether the master 

10 agreement provides for an agreement 

11 or transaction that is not a forward 

12 contract under this clause, except that 

13 the master agreement shall be consid14 ered to be a forward contract under 

15 this clause only with respect to each 

16 agreement or transaction under the 

17 master agreement that is referred to 

18 in subclause (I), (II), or (III); or 

19 ‘‘(V) any security agreement or 

20 arrangement or other credit enhance21 ment related to any agreement or 

22 transaction referred to in subclause 

23 (I), (II), (III), or (IV), including any 

24 guarantee or reimbursement obliga25 tion in connection with any agreement 
339 

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1 or transaction referred to in any such 

2 subclause.’’. 

3 (e) DEFINITION OF REPURCHASE AGREEMENT.— 

4 (1) FDIC-INSURED DEPOSITORY INSTITU5 TIONS.—Section 11(e)(8)(D)(v) of the Federal De6 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(v)) is 

7 amended to read as follows: 

8 ‘‘(v) REPURCHASE AGREEMENT.—The 

9 term ‘repurchase agreement’ (which defini10 tion also applies to a reverse repurchase 

11 agreement)— 

12 ‘‘(I) means an agreement, includ13 ing related terms, which provides for 

14 the transfer of one or more certifi15 cates of deposit, mortgage-related se16 curities (as such term is defined in 

17 the Securities Exchange Act of 1934), 

18 mortgage loans, interests in mortgage19 related securities or mortgage loans, 

20 eligible bankers’ acceptances, qualified 

21 foreign government securities or secu22 rities that are direct obligations of, or 

23 that are fully guaranteed by, the 

24 United States or any agency of the 

25 United States against the transfer of 
340 

•S 256 RH 

1 funds by the transferee of such certifi2 cates of deposit, eligible bankers’ ac3 ceptances, securities, mortgage loans, 

4 or interests with a simultaneous 

5 agreement by such transferee to 

6 transfer to the transferor thereof cer7 tificates of deposit, eligible bankers’ 

8 acceptances, securities, mortgage 

9 loans, or interests as described above, 

10 at a date certain not later than 1 year 

11 after such transfers or on demand, 

12 against the transfer of funds, or any 

13 other similar agreement; 

14 ‘‘(II) does not include any repur15 chase obligation under a participation 

16 in a commercial mortgage loan unless 

17 the Corporation determines by regula18 tion, resolution, or order to include 

19 any such participation within the 

20 meaning of such term; 

21 ‘‘(III) means any combination of 

22 agreements or transactions referred to 

23 in subclauses (I) and (IV); 
341 

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1 ‘‘(IV) means any option to enter 

2 into any agreement or transaction re3 ferred to in subclause (I) or (III); 

4 ‘‘(V) means a master agreement 

5 that provides for an agreement or 

6 transaction referred to in subclause 

7 (I), (III), or (IV), together with all 

8 supplements to any such master 

9 agreement, without regard to whether 

10 the master agreement provides for an 

11 agreement or transaction that is not a 

12 repurchase agreement under this 

13 clause, except that the master agree14 ment shall be considered to be a re15 purchase agreement under this sub16 clause only with respect to each agree17 ment or transaction under the master 

18 agreement that is referred to in sub19 clause (I), (III), or (IV); and 

20 ‘‘(VI) means any security agree21 ment or arrangement or other credit 

22 enhancement related to any agree23 ment or transaction referred to in 

24 subclause (I), (III), (IV), or (V), in25 cluding any guarantee or reimburse-
342 

•S 256 RH 

1 ment obligation in connection with 

2 any agreement or transaction referred 

3 to in any such subclause. 

4 For purposes of this clause, the term 

5 ‘qualified foreign government security’ 

6 means a security that is a direct obligation 

7 of, or that is fully guaranteed by, the cen8 tral government of a member of the Orga9 nization for Economic Cooperation and 

10 Development (as determined by regulation 

11 or order adopted by the appropriate Fed12 eral banking authority).’’. 

13 (2) INSURED CREDIT UNIONS.—Section 

14 207(c)(8)(D)(v) of the Federal Credit Union Act (12 

15 U.S.C. 1787(c)(8)(D)(v)) is amended to read as fol16 lows: 

17 ‘‘(v) REPURCHASE AGREEMENT.—The 

18 term ‘repurchase agreement’ (which defini19 tion also applies to a reverse repurchase 

20 agreement)— 

21 ‘‘(I) means an agreement, includ22 ing related terms, which provides for 

23 the transfer of one or more certifi24 cates of deposit, mortgage-related se25 curities (as such term is defined in 
343 

•S 256 RH 

1 the Securities Exchange Act of 1934), 

2 mortgage loans, interests in mortgage3 related securities or mortgage loans, 

4 eligible bankers’ acceptances, qualified 

5 foreign government securities or secu6 rities that are direct obligations of, or 

7 that are fully guaranteed by, the 

8 United States or any agency of the 

9 United States against the transfer of 

10 funds by the transferee of such certifi11 cates of deposit, eligible bankers’ ac12 ceptances, securities, mortgage loans, 

13 or interests with a simultaneous 

14 agreement by such transferee to 

15 transfer to the transferor thereof cer16 tificates of deposit, eligible bankers’ 

17 acceptances, securities, mortgage 

18 loans, or interests as described above, 

19 at a date certain not later than 1 year 

20 after such transfers or on demand, 

21 against the transfer of funds, or any 

22 other similar agreement; 

23 ‘‘(II) does not include any repur24 chase obligation under a participation 

25 in a commercial mortgage loan unless 
344 

•S 256 RH 

1 the Board determines by regulation, 

2 resolution, or order to include any 

3 such participation within the meaning 

4 of such term; 

5 ‘‘(III) means any combination of 

6 agreements or transactions referred to 

7 in subclauses (I) and (IV); 

8 ‘‘(IV) means any option to enter 

9 into any agreement or transaction re10 ferred to in subclause (I) or (III); 

11 ‘‘(V) means a master agreement 

12 that provides for an agreement or 

13 transaction referred to in subclause 

14 (I), (III), or (IV), together with all 

15 supplements to any such master 

16 agreement, without regard to whether 

17 the master agreement provides for an 

18 agreement or transaction that is not a 

19 repurchase agreement under this 

20 clause, except that the master agree21 ment shall be considered to be a re22 purchase agreement under this sub23 clause only with respect to each agree24 ment or transaction under the master 
345 

•S 256 RH 

1 agreement that is referred to in sub2 clause (I), (III), or (IV); and 

3 ‘‘(VI) means any security agree4 ment or arrangement or other credit 

5 enhancement related to any agree6 ment or transaction referred to in 

7 subclause (I), (III), (IV), or (V), in8 cluding any guarantee or reimburse9 ment obligation in connection with 

10 any agreement or transaction referred 

11 to in any such subclause. 

12 For purposes of this clause, the term 

13 ‘qualified foreign government security’ 

14 means a security that is a direct obligation 

15 of, or that is fully guaranteed by, the cen16 tral government of a member of the Orga17 nization for Economic Cooperation and 

18 Development (as determined by regulation 

19 or order adopted by the appropriate Fed20 eral banking authority).’’. 

21 (f) DEFINITION OF SWAP AGREEMENT.— 

22 (1) FDIC-INSURED DEPOSITORY INSTITU23 TIONS.—Section 11(e)(8)(D)(vi) of the Federal De24 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is 

25 amended to read as follows: 
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1 ‘‘(vi) SWAP AGREEMENT.—The term 

2 ‘swap agreement’ means— 

3 ‘‘(I) any agreement, including the 

4 terms and conditions incorporated by 

5 reference in any such agreement, 

6 which is an interest rate swap, option, 

7 future, or forward agreement, includ8 ing a rate floor, rate cap, rate collar, 

9 cross-currency rate swap, and basis 

10 swap; a spot, same day-tomorrow, to11 morrow-next, forward, or other for12 eign exchange or precious metals 

13 agreement; a currency swap, option, 

14 future, or forward agreement; an eq15 uity index or equity swap, option, fu16 ture, or forward agreement; a debt 

17 index or debt swap, option, future, or 

18 forward agreement; a total return, 

19 credit spread or credit swap, option, 

20 future, or forward agreement; a com21 modity index or commodity swap, op22 tion, future, or forward agreement; or 

23 a weather swap, weather derivative, or 

24 weather option; 
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1 ‘‘(II) any agreement or trans2 action that is similar to any other 

3 agreement or transaction referred to 

4 in this clause and that is of a type 

5 that has been, is presently, or in the 

6 future becomes, the subject of recur7 rent dealings in the swap markets (in8 cluding terms and conditions incor9 porated by reference in such agree10 ment) and that is a forward, swap, fu11 ture, or option on one or more rates, 

12 currencies, commodities, equity securi13 ties or other equity instruments, debt 

14 securities or other debt instruments, 

15 quantitative measures associated with 

16 an occurrence, extent of an occur17 rence, or contingency associated with 

18 a financial, commercial, or economic 

19 consequence, or economic or financial 

20 indices or measures of economic or fi21 nancial risk or value; 

22 ‘‘(III) any combination of agree23 ments or transactions referred to in 

24 this clause; 
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1 ‘‘(IV) any option to enter into 

2 any agreement or transaction referred 

3 to in this clause; 

4 ‘‘(V) a master agreement that 

5 provides for an agreement or trans6 action referred to in subclause (I), 

7 (II), (III), or (IV), together with all 

8 supplements to any such master 

9 agreement, without regard to whether 

10 the master agreement contains an 

11 agreement or transaction that is not a 

12 swap agreement under this clause, ex13 cept that the master agreement shall 

14 be considered to be a swap agreement 

15 under this clause only with respect to 

16 each agreement or transaction under 

17 the master agreement that is referred 

18 to in subclause (I), (II), (III), or (IV); 

19 and 

20 ‘‘(VI) any security agreement or 

21 arrangement or other credit enhance22 ment related to any agreements or 

23 transactions referred to in subclause 

24 (I), (II), (III), (IV), or (V), including 

25 any guarantee or reimbursement obli-
349 

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1 gation in connection with any agree2 ment or transaction referred to in any 

3 such subclause. 

4 Such term is applicable for purposes of 

5 this subsection only and shall not be con6 strued or applied so as to challenge or af7 fect the characterization, definition, or 

8 treatment of any swap agreement under 

9 any other statute, regulation, or rule, in10 cluding the Securities Act of 1933, the Se11 curities Exchange Act of 1934, the Public 

12 Utility Holding Company Act of 1935, the 

13 Trust Indenture Act of 1939, the Invest14 ment Company Act of 1940, the Invest15 ment Advisers Act of 1940, the Securities 

16 Investor Protection Act of 1970, the Com17 modity Exchange Act, the Gramm-Leach18 Bliley Act, and the Legal Certainty for 

19 Bank Products Act of 2000.’’. 

20 (2) INSURED CREDIT UNIONS.—Section 

21 207(c)(8)(D) of the Federal Credit Union Act (12 

22 U.S.C. 1787(c)(8)(D)) is amended by adding at the 

23 end the following new clause: 

24 ‘‘(vi) SWAP AGREEMENT.—The term 

25 ‘swap agreement’ means— 
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1 ‘‘(I) any agreement, including the 

2 terms and conditions incorporated by 

3 reference in any such agreement, 

4 which is an interest rate swap, option, 

5 future, or forward agreement, includ6 ing a rate floor, rate cap, rate collar, 

7 cross-currency rate swap, and basis 

8 swap; a spot, same day-tomorrow, to9 morrow-next, forward, or other for10 eign exchange or precious metals 

11 agreement; a currency swap, option, 

12 future, or forward agreement; an eq13 uity index or equity swap, option, fu14 ture, or forward agreement; a debt 

15 index or debt swap, option, future, or 

16 forward agreement; a total return, 

17 credit spread or credit swap, option, 

18 future, or forward agreement; a com19 modity index or commodity swap, op20 tion, future, or forward agreement; or 

21 a weather swap, weather derivative, or 

22 weather option; 

23 ‘‘(II) any agreement or trans24 action that is similar to any other 

25 agreement or transaction referred to 
351 

•S 256 RH 

1 in this clause and that is of a type 

2 that has been, is presently, or in the 

3 future becomes, the subject of recur4 rent dealings in the swap markets (in5 cluding terms and conditions incor6 porated by reference in such agree7 ment) and that is a forward, swap, fu8 ture, or option on one or more rates, 

9 currencies, commodities, equity securi10 ties or other equity instruments, debt 

11 securities or other debt instruments, 

12 quantitative measures associated with 

13 an occurrence, extent of an occur14 rence, or contingency associated with 

15 a financial, commercial, or economic 

16 consequence, or economic or financial 

17 indices or measures of economic or fi18 nancial risk or value; 

19 ‘‘(III) any combination of agree20 ments or transactions referred to in 

21 this clause; 

22 ‘‘(IV) any option to enter into 

23 any agreement or transaction referred 

24 to in this clause; 
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1 ‘‘(V) a master agreement that 

2 provides for an agreement or trans3 action referred to in subclause (I), 

4 (II), (III), or (IV), together with all 

5 supplements to any such master 

6 agreement, without regard to whether 

7 the master agreement contains an 

8 agreement or transaction that is not a 

9 swap agreement under this clause, ex10 cept that the master agreement shall 

11 be considered to be a swap agreement 

12 under this clause only with respect to 

13 each agreement or transaction under 

14 the master agreement that is referred 

15 to in subclause (I), (II), (III), or (IV); 

16 and 

17 ‘‘(VI) any security agreement or 

18 arrangement or other credit enhance19 ment related to any agreements or 

20 transactions referred to in subclause 

21 (I), (II), (III), (IV), or (V), including 

22 any guarantee or reimbursement obli23 gation in connection with any agree24 ment or transaction referred to in any 

25 such subclause. 
353 

•S 256 RH 

1 Such term is applicable for purposes of 

2 this subsection only and shall not be con3 strued or applied so as to challenge or af4 fect the characterization, definition, or 

5 treatment of any swap agreement under 

6 any other statute, regulation, or rule, in7 cluding the Securities Act of 1933, the Se8 curities Exchange Act of 1934, the Public 

9 Utility Holding Company Act of 1935, the 

10 Trust Indenture Act of 1939, the Invest11 ment Company Act of 1940, the Invest12 ment Advisers Act of 1940, the Securities 

13 Investor Protection Act of 1970, the Com14 modity Exchange Act, the Gramm-Leach15 Bliley Act, and the Legal Certainty for 

16 Bank Products Act of 2000.’’. 

17 (g) DEFINITION OF TRANSFER.— 

18 (1) FDIC-INSURED DEPOSITORY INSTITU19 TIONS.—Section 11(e)(8)(D)(viii) of the Federal De20 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) 

21 is amended to read as follows: 

22 ‘‘(viii) TRANSFER.—The term ‘trans23 fer’ means every mode, direct or indirect, 

24 absolute or conditional, voluntary or invol25 untary, of disposing of or parting with 
354 

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1 property or with an interest in property, 

2 including retention of title as a security in3 terest and foreclosure of the depository in4 stitution’s equity of redemption.’’. 

5 (2) INSURED CREDIT UNIONS.—Section 

6 207(c)(8)(D) of the Federal Credit Union Act (12 

7 U.S.C. 1787(c)(8)(D)) (as amended by subsection 

8 (f) of this section) is amended by adding at the end 

9 the following new clause: 

10 ‘‘(viii) TRANSFER.—The term ‘trans11 fer’ means every mode, direct or indirect, 

12 absolute or conditional, voluntary or invol13 untary, of disposing of or parting with 

14 property or with an interest in property, 

15 including retention of title as a security in16 terest and foreclosure of the depository in17 stitution’s equity of redemption.’’. 

18 (h) TREATMENT OF QUALIFIED FINANCIAL CON19 TRACTS.— 

20 (1) FDIC-INSURED DEPOSITORY INSTITU21 TIONS.—Section 11(e)(8) of the Federal Deposit In22 surance Act (12 U.S.C. 1821(e)(8)) is amended— 

23 (A) in subparagraph (A)— 

24 (i) by striking ‘‘paragraph (10)’’ and 

25 inserting ‘‘paragraphs (9) and (10)’’; 
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1 (ii) in clause (i), by striking ‘‘to cause 

2 the termination or liquidation’’ and insert3 ing ‘‘such person has to cause the termi4 nation, liquidation, or acceleration’’; and 

5 (iii) by striking clause (ii) and insert6 ing the following new clause: 

7 ‘‘(ii) any right under any security 

8 agreement or arrangement or other credit 

9 enhancement related to one or more quali10 fied financial contracts described in clause 

11 (i);’’; and 

12 (B) in subparagraph (E), by striking 

13 clause (ii) and inserting the following: 

14 ‘‘(ii) any right under any security 

15 agreement or arrangement or other credit 

16 enhancement related to one or more quali17 fied financial contracts described in clause 

18 (i);’’. 

19 (2) INSURED CREDIT UNIONS.—Section 

20 207(c)(8) of the Federal Credit Union Act (12 

21 U.S.C. 1787(c)(8)) is amended— 

22 (A) in subparagraph (A)— 

23 (i) by striking ‘‘paragraph (12)’’ and 

24 inserting ‘‘paragraphs (9) and (10)’’; 
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1 (ii) in clause (i), by striking ‘‘to cause 

2 the termination or liquidation’’ and insert3 ing ‘‘such person has to cause the termi4 nation, liquidation, or acceleration’’; and 

5 (iii) by striking clause (ii) and insert6 ing the following new clause: 

7 ‘‘(ii) any right under any security 

8 agreement or arrangement or other credit 

9 enhancement related to 1 or more qualified 

10 financial contracts described in clause 

11 (i);’’; and 

12 (B) in subparagraph (E), by striking 

13 clause (ii) and inserting the following new 

14 clause: 

15 ‘‘(ii) any right under any security 

16 agreement or arrangement or other credit 

17 enhancement related to 1 or more qualified 

18 financial contracts described in clause 

19 (i);’’. 

20 (i) AVOIDANCE OF TRANSFERS.— 

21 (1) FDIC-INSURED DEPOSITORY INSTITU22 TIONS.—Section 11(e)(8)(C)(i) of the Federal De23 posit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is 

24 amended by inserting ‘‘section 5242 of the Revised 

25 Statutes of the United States or any other Federal 
357 

•S 256 RH 

1 or State law relating to the avoidance of preferential 

2 or fraudulent transfers,’’ before ‘‘the Corporation’’. 

3 (2) INSURED CREDIT UNIONS.—Section 

4 207(c)(8)(C)(i) of the Federal Credit Union Act (12 

5 U.S.C. 1787(c)(8)(C)(i)) is amended by inserting 

6 ‘‘section 5242 of the Revised Statutes of the United 

7 States or any other Federal or State law relating to 

8 the avoidance of preferential or fraudulent trans9 fers,’’ before ‘‘the Board’’. 

10 SEC. 902. AUTHORITY OF THE FDIC AND NCUAB WITH RE11 SPECT TO FAILED AND FAILING INSTITU12 TIONS. 

13 (a) FEDERAL DEPOSIT INSURANCE CORPORATION.— 

14 (1) IN GENERAL.—Section 11(e)(8) of the Fed15 eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)) 

16 is amended— 

17 (A) in subparagraph (E), by striking 

18 ‘‘other than paragraph (12) of this subsection, 

19 subsection (d)(9)’’ and inserting ‘‘other than 

20 subsections (d)(9) and (e)(10)’’; and 

21 (B) by adding at the end the following new 

22 subparagraphs: 

23 ‘‘(F) CLARIFICATION.—No provision of law 

24 shall be construed as limiting the right or 

25 power of the Corporation, or authorizing any 
358 

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1 court or agency to limit or delay, in any man2 ner, the right or power of the Corporation to 

3 transfer any qualified financial contract in ac4 cordance with paragraphs (9) and (10) of this 

5 subsection or to disaffirm or repudiate any such 

6 contract in accordance with subsection (e)(1) of 

7 this section. 

8 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC9 TIVE.— 

10 ‘‘(i) IN GENERAL.—Notwithstanding 

11 the provisions of subparagraphs (A) and 

12 (E), and sections 403 and 404 of the Fed13 eral Deposit Insurance Corporation Im14 provement Act of 1991, no walkaway 

15 clause shall be enforceable in a qualified fi16 nancial contract of an insured depository 

17 institution in default. 

18 ‘‘(ii) WALKAWAY CLAUSE DEFINED.— 

19 For purposes of this subparagraph, the 

20 term ‘walkaway clause’ means a provision 

21 in a qualified financial contract that, after 

22 calculation of a value of a party’s position 

23 or an amount due to or from 1 of the par24 ties in accordance with its terms upon ter25 mination, liquidation, or acceleration of the 
359 

•S 256 RH 

1 qualified financial contract, either does not 

2 create a payment obligation of a party or 

3 extinguishes a payment obligation of a 

4 party in whole or in part solely because of 

5 such party’s status as a nondefaulting 

6 party.’’. 

7 (2) TECHNICAL AND CONFORMING AMEND8 MENT.—Section 11(e)(12)(A) of the Federal Deposit 

9 Insurance Act (12 U.S.C. 1821(e)(12)(A)) is amend10 ed by inserting ‘‘or the exercise of rights or powers 

11 by’’ after ‘‘the appointment of’’. 

12 (b) NATIONAL CREDIT UNION ADMINISTRATION

13 BOARD.— 

14 (1) IN GENERAL.—Section 207(c)(8) of the 

15 Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is 

16 amended— 

17 (A) in subparagraph (E) (as amended by 

18 section 901(h)), by striking ‘‘other than para19 graph (12) of this subsection, subsection 

20 (b)(9)’’ and inserting ‘‘other than subsections 

21 (b)(9) and (c)(10)’’; and 

22 (B) by adding at the end the following new 

23 subparagraphs: 

24 ‘‘(F) CLARIFICATION.—No provision of law 

25 shall be construed as limiting the right or 
360 

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1 power of the Board, or authorizing any court or 

2 agency to limit or delay, in any manner, the 

3 right or power of the Board to transfer any 

4 qualified financial contract in accordance with 

5 paragraphs (9) and (10) of this subsection or to 

6 disaffirm or repudiate any such contract in ac7 cordance with subsection (c)(1) of this section. 

8 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC9 TIVE.— 

10 ‘‘(i) IN GENERAL.—Notwithstanding 

11 the provisions of subparagraphs (A) and 

12 (E), and sections 403 and 404 of the Fed13 eral Deposit Insurance Corporation Im14 provement Act of 1991, no walkaway 

15 clause shall be enforceable in a qualified fi16 nancial contract of an insured credit union 

17 in default. 

18 ‘‘(ii) WALKAWAY CLAUSE DEFINED.— 

19 For purposes of this subparagraph, the 

20 term ‘walkaway clause’ means a provision 

21 in a qualified financial contract that, after 

22 calculation of a value of a party’s position 

23 or an amount due to or from 1 of the par24 ties in accordance with its terms upon ter25 mination, liquidation, or acceleration of the 
361 

•S 256 RH 

1 qualified financial contract, either does not 

2 create a payment obligation of a party or 

3 extinguishes a payment obligation of a 

4 party in whole or in part solely because of 

5 such party’s status as a nondefaulting 

6 party.’’. 

7 (2) TECHNICAL AND CONFORMING AMEND8 MENT.—Section 207(c)(12)(A) of the Federal Credit 

9 Union Act (12 U.S.C. 1787(c)(12)(A)) is amended 

10 by inserting ‘‘or the exercise of rights or powers by’’ 

11 after ‘‘the appointment of’’. 

12 SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF 

13 QUALIFIED FINANCIAL CONTRACTS. 

14 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS.— 

15 (1) TRANSFERS OF QUALIFIED FINANCIAL

16 CONTRACTS TO FINANCIAL INSTITUTIONS.—Section 

17 11(e)(9) of the Federal Deposit Insurance Act (12 

18 U.S.C. 1821(e)(9)) is amended to read as follows: 

19 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON20 TRACTS.— 

21 ‘‘(A) IN GENERAL.—In making any trans22 fer of assets or liabilities of a depository institu23 tion in default which includes any qualified fi24 nancial contract, the conservator or receiver for 

25 such depository institution shall either— 
362 

•S 256 RH 

1 ‘‘(i) transfer to one financial institu2 tion, other than a financial institution for 

3 which a conservator, receiver, trustee in 

4 bankruptcy, or other legal custodian has 

5 been appointed or which is otherwise the 

6 subject of a bankruptcy or insolvency pro7 ceeding— 

8 ‘‘(I) all qualified financial con9 tracts between any person or any af10 filiate of such person and the deposi11 tory institution in default; 

12 ‘‘(II) all claims of such person or 

13 any affiliate of such person against 

14 such depository institution under any 

15 such contract (other than any claim 

16 which, under the terms of any such 

17 contract, is subordinated to the claims 

18 of general unsecured creditors of such 

19 institution); 

20 ‘‘(III) all claims of such deposi21 tory institution against such person or 

22 any affiliate of such person under any 

23 such contract; and 

24 ‘‘(IV) all property securing or 

25 any other credit enhancement for any 
363 

•S 256 RH 

1 contract described in subclause (I) or 

2 any claim described in subclause (II) 

3 or (III) under any such contract; or 

4 ‘‘(ii) transfer none of the qualified fi5 nancial contracts, claims, property or other 

6 credit enhancement referred to in clause (i) 

7 (with respect to such person and any affil8 iate of such person). 

9 ‘‘(B) TRANSFER TO FOREIGN BANK, FOR10 EIGN FINANCIAL INSTITUTION, OR BRANCH OR

11 AGENCY OF A FOREIGN BANK OR FINANCIAL IN12 STITUTION.—In transferring any qualified fi13 nancial contracts and related claims and prop14 erty under subparagraph (A)(i), the conservator 

15 or receiver for the depository institution shall 

16 not make such transfer to a foreign bank, fi17 nancial institution organized under the laws of 

18 a foreign country, or a branch or agency of a 

19 foreign bank or financial institution unless, 

20 under the law applicable to such bank, financial 

21 institution, branch or agency, to the qualified 

22 financial contracts, and to any netting contract, 

23 any security agreement or arrangement or other 

24 credit enhancement related to one or more 

25 qualified financial contracts, the contractual 
364 

•S 256 RH 

1 rights of the parties to such qualified financial 

2 contracts, netting contracts, security agree3 ments or arrangements, or other credit en4 hancements are enforceable substantially to the 

5 same extent as permitted under this section. 

6 ‘‘(C) TRANSFER OF CONTRACTS SUBJECT

7 TO THE RULES OF A CLEARING ORGANIZA8 TION.—In the event that a conservator or re9 ceiver transfers any qualified financial contract 

10 and related claims, property, and credit en11 hancements pursuant to subparagraph (A)(i) 

12 and such contract is cleared by or subject to the 

13 rules of a clearing organization, the clearing or14 ganization shall not be required to accept the 

15 transferee as a member by virtue of the trans16 fer. 

17 ‘‘(D) DEFINITIONS.—For purposes of this 

18 paragraph, the term ‘financial institution’ 

19 means a broker or dealer, a depository institu20 tion, a futures commission merchant, or any 

21 other institution, as determined by the Corpora22 tion by regulation to be a financial institution, 

23 and the term ‘clearing organization’ has the 

24 same meaning as in section 402 of the Federal 
365 

•S 256 RH 

1 Deposit Insurance Corporation Improvement 

2 Act of 1991.’’. 

3 (2) NOTICE TO QUALIFIED FINANCIAL CON4 TRACT COUNTERPARTIES.—Section 11(e)(10)(A) of 

5 the Federal Deposit Insurance Act (12 U.S.C. 

6 1821(e)(10)(A)) is amended in the material imme7 diately following clause (ii) by striking ‘‘the conser8 vator’’ and all that follows through the period and 

9 inserting the following: ‘‘the conservator or receiver 

10 shall notify any person who is a party to any such 

11 contract of such transfer by 5:00 p.m. (eastern time) 

12 on the business day following the date of the ap13 pointment of the receiver in the case of a receiver14 ship, or the business day following such transfer in 

15 the case of a conservatorship.’’. 

16 (3) RIGHTS AGAINST RECEIVER AND CONSER17 VATOR AND TREATMENT OF BRIDGE BANKS.—Sec18 tion 11(e)(10) of the Federal Deposit Insurance Act 

19 (12 U.S.C. 1821(e)(10)) is amended— 

20 (A) by redesignating subparagraph (B) as 

21 subparagraph (D); and 

22 (B) by inserting after subparagraph (A) 

23 the following new subparagraphs: 

24 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE25 ABLE.— 
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•S 256 RH 

1 ‘‘(i) RECEIVERSHIP.—A person who is 

2 a party to a qualified financial contract 

3 with an insured depository institution may 

4 not exercise any right that such person has 

5 to terminate, liquidate, or net such con6 tract under paragraph (8)(A) of this sub7 section or section 403 or 404 of the Fed8 eral Deposit Insurance Corporation Im9 provement Act of 1991, solely by reason of 

10 or incidental to the appointment of a re11 ceiver for the depository institution (or the 

12 insolvency or financial condition of the de13 pository institution for which the receiver 

14 has been appointed)— 

15 ‘‘(I) until 5:00 p.m. (eastern 

16 time) on the business day following 

17 the date of the appointment of the re18 ceiver; or 

19 ‘‘(II) after the person has re20 ceived notice that the contract has 

21 been transferred pursuant to para22 graph (9)(A). 

23 ‘‘(ii) CONSERVATORSHIP.—A person 

24 who is a party to a qualified financial con25 tract with an insured depository institution 
367 

•S 256 RH 

1 may not exercise any right that such per2 son has to terminate, liquidate, or net such 

3 contract under paragraph (8)(E) of this 

4 subsection or section 403 or 404 of the 

5 Federal Deposit Insurance Corporation 

6 Improvement Act of 1991, solely by reason 

7 of or incidental to the appointment of a 

8 conservator for the depository institution 

9 (or the insolvency or financial condition of 

10 the depository institution for which the 

11 conservator has been appointed). 

12 ‘‘(iii) NOTICE.—For purposes of this 

13 paragraph, the Corporation as receiver or 

14 conservator of an insured depository insti15 tution shall be deemed to have notified a 

16 person who is a party to a qualified finan17 cial contract with such depository institu18 tion if the Corporation has taken steps 

19 reasonably calculated to provide notice to 

20 such person by the time specified in sub21 paragraph (A). 

22 ‘‘(C) TREATMENT OF BRIDGE BANKS.— 

23 The following institutions shall not be consid24 ered to be a financial institution for which a 

25 conservator, receiver, trustee in bankruptcy, or 
368 

•S 256 RH 

1 other legal custodian has been appointed or 

2 which is otherwise the subject of a bankruptcy 

3 or insolvency proceeding for purposes of para4 graph (9): 

5 ‘‘(i) A bridge bank. 

6 ‘‘(ii) A depository institution orga7 nized by the Corporation, for which a con8 servator is appointed either— 

9 ‘‘(I) immediately upon the orga10 nization of the institution; or 

11 ‘‘(II) at the time of a purchase 

12 and assumption transaction between 

13 the depository institution and the Cor14 poration as receiver for a depository 

15 institution in default.’’. 

16 (b) INSURED CREDIT UNIONS.— 

17 (1) TRANSFERS OF QUALIFIED FINANCIAL CON18 TRACTS TO FINANCIAL INSTITUTIONS.—Section 

19 207(c)(9) of the Federal Credit Union Act (12 

20 U.S.C. 1787(c)(9)) is amended to read as follows: 

21 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON22 TRACTS.— 

23 ‘‘(A) IN GENERAL.—In making any trans24 fer of assets or liabilities of a credit union in 

25 default which includes any qualified financial 
369 

•S 256 RH 

1 contract, the conservator or liquidating agent 

2 for such credit union shall either— 

3 ‘‘(i) transfer to 1 financial institution, 

4 other than a financial institution for which 

5 a conservator, receiver, trustee in bank6 ruptcy, or other legal custodian has been 

7 appointed or which is otherwise the subject 

8 of a bankruptcy or insolvency proceeding— 

9 ‘‘(I) all qualified financial con10 tracts between any person or any af11 filiate of such person and the credit 

12 union in default; 

13 ‘‘(II) all claims of such person or 

14 any affiliate of such person against 

15 such credit union under any such con16 tract (other than any claim which, 

17 under the terms of any such contract, 

18 is subordinated to the claims of gen19 eral unsecured creditors of such credit 

20 union); 

21 ‘‘(III) all claims of such credit 

22 union against such person or any af23 filiate of such person under any such 

24 contract; and 
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•S 256 RH 

1 ‘‘(IV) all property securing or 

2 any other credit enhancement for any 

3 contract described in subclause (I) or 

4 any claim described in subclause (II) 

5 or (III) under any such contract; or 

6 ‘‘(ii) transfer none of the qualified fi7 nancial contracts, claims, property or other 

8 credit enhancement referred to in clause (i) 

9 (with respect to such person and any affil10 iate of such person). 

11 ‘‘(B) TRANSFER TO FOREIGN BANK, FOR12 EIGN FINANCIAL INSTITUTION, OR BRANCH OR

13 AGENCY OF A FOREIGN BANK OR FINANCIAL IN14 STITUTION.—In transferring any qualified fi15 nancial contracts and related claims and prop16 erty under subparagraph (A)(i), the conservator 

17 or liquidating agent for the credit union shall 

18 not make such transfer to a foreign bank, fi19 nancial institution organized under the laws of 

20 a foreign country, or a branch or agency of a 

21 foreign bank or financial institution unless, 

22 under the law applicable to such bank, financial 

23 institution, branch or agency, to the qualified 

24 financial contracts, and to any netting contract, 

25 any security agreement or arrangement or other 
371 

•S 256 RH 

1 credit enhancement related to 1 or more quali2 fied financial contracts, the contractual rights 

3 of the parties to such qualified financial con4 tracts, netting contracts, security agreements or 

5 arrangements, or other credit enhancements are 

6 enforceable substantially to the same extent as 

7 permitted under this section. 

8 ‘‘(C) TRANSFER OF CONTRACTS SUBJECT

9 TO THE RULES OF A CLEARING ORGANIZA10 TION.—In the event that a conservator or liqui11 dating agent transfers any qualified financial 

12 contract and related claims, property, and cred13 it enhancements pursuant to subparagraph 

14 (A)(i) and such contract is cleared by or subject 

15 to the rules of a clearing organization, the 

16 clearing organization shall not be required to 

17 accept the transferee as a member by virtue of 

18 the transfer. 

19 ‘‘(D) DEFINITIONS.—For purposes of this 

20 paragraph— 

21 ‘‘(i) the term ‘financial institution’ 

22 means a broker or dealer, a depository in23 stitution, a futures commission merchant, 

24 a credit union, or any other institution, as 
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•S 256 RH 

1 determined by the Board by regulation to 

2 be a financial institution; and 

3 ‘‘(ii) the term ‘clearing organization’ 

4 has the same meaning as in section 402 of 

5 the Federal Deposit Insurance Corporation 

6 Improvement Act of 1991.’’. 

7 (2) NOTICE TO QUALIFIED FINANCIAL CON8 TRACT COUNTERPARTIES.—Section 207(c)(10)(A) of 

9 the Federal Credit Union Act (12 U.S.C. 

10 1787(c)(10)(A)) is amended in the material imme11 diately following clause (ii) by striking ‘‘the conser12 vator’’ and all that follows through the period and 

13 inserting the following: ‘‘the conservator or liqui14 dating agent shall notify any person who is a party 

15 to any such contract of such transfer by 5:00 p.m. 

16 (eastern time) on the business day following the date 

17 of the appointment of the liquidating agent in the 

18 case of a liquidation, or the business day following 

19 such transfer in the case of a conservatorship.’’. 

20 (3) RIGHTS AGAINST LIQUIDATING AGENT AND

21 CONSERVATOR AND TREATMENT OF BRIDGE

22 BANKS.—Section 207(c)(10) of the Federal Credit 

23 Union Act (12 U.S.C. 1787(c)(10)) is amended— 

24 (A) by redesignating subparagraph (B) as 

25 subparagraph (D); and 
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1 (B) by inserting after subparagraph (A) 

2 the following new subparagraphs: 

3 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE4 ABLE.— 

5 ‘‘(i) LIQUIDATION.—A person who is 

6 a party to a qualified financial contract 

7 with an insured credit union may not exer8 cise any right that such person has to ter9 minate, liquidate, or net such contract 

10 under paragraph (8)(A) of this subsection 

11 or section 403 or 404 of the Federal De12 posit Insurance Corporation Improvement 

13 Act of 1991, solely by reason of or inci14 dental to the appointment of a liquidating 

15 agent for the credit union institution (or 

16 the insolvency or financial condition of the 

17 credit union for which the liquidating 

18 agent has been appointed)— 

19 ‘‘(I) until 5:00 p.m. (eastern 

20 time) on the business day following 

21 the date of the appointment of the liq22 uidating agent; or 

23 ‘‘(II) after the person has re24 ceived notice that the contract has 
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1 been transferred pursuant to para2 graph (9)(A). 

3 ‘‘(ii) CONSERVATORSHIP.—A person 

4 who is a party to a qualified financial con5 tract with an insured credit union may not 

6 exercise any right that such person has to 

7 terminate, liquidate, or net such contract 

8 under paragraph (8)(E) of this subsection 

9 or section 403 or 404 of the Federal De10 posit Insurance Corporation Improvement 

11 Act of 1991, solely by reason of or inci12 dental to the appointment of a conservator 

13 for the credit union or the insolvency or fi14 nancial condition of the credit union for 

15 which the conservator has been appointed). 

16 ‘‘(iii) NOTICE.—For purposes of this 

17 paragraph, the Board as conservator or 

18 liquidating agent of an insured credit 

19 union shall be deemed to have notified a 

20 person who is a party to a qualified finan21 cial contract with such credit union if the 

22 Board has taken steps reasonably cal23 culated to provide notice to such person by 

24 the time specified in subparagraph (A). 
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1 ‘‘(C) TREATMENT OF BRIDGE BANKS.— 

2 The following institutions shall not be consid3 ered to be a financial institution for which a 

4 conservator, receiver, trustee in bankruptcy, or 

5 other legal custodian has been appointed or 

6 which is otherwise the subject of a bankruptcy 

7 or insolvency proceeding for purposes of para8 graph (9): 

9 ‘‘(i) A bridge bank. 

10 ‘‘(ii) A credit union organized by the 

11 Board, for which a conservator is ap12 pointed either— 

13 ‘‘(I) immediately upon the orga14 nization of the credit union; or 

15 ‘‘(II) at the time of a purchase 

16 and assumption transaction between 

17 the credit union and the Board as re18 ceiver for a credit union in default.’’. 

19 SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR 

20 REPUDIATION OF QUALIFIED FINANCIAL 

21 CONTRACTS. 

22 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS.— 

23 Section 11(e) of the Federal Deposit Insurance Act (12 

24 U.S.C. 1821(e)) is amended— 
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1 (1) by redesignating paragraphs (11) through 

2 (15) as paragraphs (12) through (16), respectively; 

3 (2) by inserting after paragraph (10) the fol4 lowing new paragraph: 

5 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

6 QUALIFIED FINANCIAL CONTRACTS.—In exercising 

7 the rights of disaffirmance or repudiation of a con8 servator or receiver with respect to any qualified fi9 nancial contract to which an insured depository in10 stitution is a party, the conservator or receiver for 

11 such institution shall either— 

12 ‘‘(A) disaffirm or repudiate all qualified fi13 nancial contracts between— 

14 ‘‘(i) any person or any affiliate of 

15 such person; and 

16 ‘‘(ii) the depository institution in de17 fault; or 

18 ‘‘(B) disaffirm or repudiate none of the 

19 qualified financial contracts referred to in sub20 paragraph (A) (with respect to such person or 

21 any affiliate of such person).’’; and 

22 (3) by adding at the end the following new 

23 paragraph: 

24 ‘‘(17) SAVINGS CLAUSE.—The meanings of 

25 terms used in this subsection are applicable for pur-
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1 poses of this subsection only, and shall not be con2 strued or applied so as to challenge or affect the 

3 characterization, definition, or treatment of any 

4 similar terms under any other statute, regulation, or 

5 rule, including the Gramm-Leach-Bliley Act, the 

6 Legal Certainty for Bank Products Act of 2000, the 

7 securities laws (as that term is defined in section 

8 3(a)(47) of the Securities Exchange Act of 1934), 

9 and the Commodity Exchange Act.’’. 

10 (b) INSURED CREDIT UNIONS.—Section 207(c) of 

11 the Federal Credit Union Act (12 U.S.C. 1787(c)) is 

12 amended— 

13 (1) by redesignating paragraphs (11), (12), and 

14 (13) as paragraphs (12), (13), and (14), respec15 tively; 

16 (2) by inserting after paragraph (10) the fol17 lowing new paragraph: 

18 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

19 QUALIFIED FINANCIAL CONTRACTS.—In exercising 

20 the rights of disaffirmance or repudiation of a con21 servator or liquidating agent with respect to any 

22 qualified financial contract to which an insured cred23 it union is a party, the conservator or liquidating 

24 agent for such credit union shall either— 
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1 ‘‘(A) disaffirm or repudiate all qualified fi2 nancial contracts between— 

3 ‘‘(i) any person or any affiliate of 

4 such person; and 

5 ‘‘(ii) the credit union in default; or 

6 ‘‘(B) disaffirm or repudiate none of the 

7 qualified financial contracts referred to in sub8 paragraph (A) (with respect to such person or 

9 any affiliate of such person).’’; and 

10 (3) by adding at the end the following new 

11 paragraph: 

12 ‘‘(15) SAVINGS CLAUSE.—The meanings of 

13 terms used in this subsection are applicable for pur14 poses of this subsection only, and shall not be con15 strued or applied so as to challenge or affect the 

16 characterization, definition, or treatment of any 

17 similar terms under any other statute, regulation, or 

18 rule, including the Gramm-Leach-Bliley Act, the 

19 Legal Certainty for Bank Products Act of 2000, the 

20 securities laws (as that term is defined in section 

21 (a)(47) of the Securities Exchange Act of 1934), 

22 and the Commodity Exchange Act.’’. 
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1 SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER 

2 AGREEMENTS. 

3 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS.— 

4 Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance 

5 Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as 

6 follows: 

7 ‘‘(vii) TREATMENT OF MASTER

8 AGREEMENT AS ONE AGREEMENT.—Any 

9 master agreement for any contract or 

10 agreement described in any preceding 

11 clause of this subparagraph (or any master 

12 agreement for such master agreement or 

13 agreements), together with all supplements 

14 to such master agreement, shall be treated 

15 as a single agreement and a single quali16 fied financial contract. If a master agree17 ment contains provisions relating to agree18 ments or transactions that are not them19 selves qualified financial contracts, the 

20 master agreement shall be deemed to be a 

21 qualified financial contract only with re22 spect to those transactions that are them23 selves qualified financial contracts.’’. 

24 (b) INSURED CREDIT UNIONS.—Section 

25 207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C. 
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1 1787(c)(8)(D)) is amended by inserting after clause (vi) 

2 (as added by section 901(f)) the following new clause: 

3 ‘‘(vii) TREATMENT OF MASTER

4 AGREEMENT AS ONE AGREEMENT.—Any 

5 master agreement for any contract or 

6 agreement described in any preceding 

7 clause of this subparagraph (or any master 

8 agreement for such master agreement or 

9 agreements), together with all supplements 

10 to such master agreement, shall be treated 

11 as a single agreement and a single quali12 fied financial contract. If a master agree13 ment contains provisions relating to agree14 ments or transactions that are not them15 selves qualified financial contracts, the 

16 master agreement shall be deemed to be a 

17 qualified financial contract only with re18 spect to those transactions that are them19 selves qualified financial contracts.’’. 

20 SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION 

21 IMPROVEMENT ACT OF 1991. 

22 (a) DEFINITIONS.—Section 402 of the Federal De23 posit Insurance Corporation Improvement Act of 1991 (12 

24 U.S.C. 4402) is amended— 

25 (1) in paragraph (2)— 
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1 (A) in subparagraph (A)(ii), by inserting 

2 before the semicolon ‘‘, or is exempt from such 

3 registration by order of the Securities and Ex4 change Commission’’; and 

5 (B) in subparagraph (B), by inserting be6 fore the period ‘‘, that has been granted an ex7 emption under section 4(c)(1) of the Com8 modity Exchange Act, or that is a multilateral 

9 clearing organization (as defined in section 408 

10 of this Act)’’; 

11 (2) in paragraph (6)— 

12 (A) by redesignating subparagraphs (B) 

13 through (D) as subparagraphs (C) through (E), 

14 respectively; 

15 (B) by inserting after subparagraph (A) 

16 the following new subparagraph: 

17 ‘‘(B) an uninsured national bank or an un18 insured State bank that is a member of the 

19 Federal Reserve System, if the national bank or 

20 State member bank is not eligible to make ap21 plication to become an insured bank under sec22 tion 5 of the Federal Deposit Insurance Act;’’; 

23 and 

24 (C) by amending subparagraph (C), so re25 designated, to read as follows: 
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1 ‘‘(C) a branch or agency of a foreign bank, 

2 a foreign bank and any branch or agency of the 

3 foreign bank, or the foreign bank that estab4 lished the branch or agency, as those terms are 

5 defined in section 1(b) of the International 

6 Banking Act of 1978;’’; 

7 (3) in paragraph (11), by inserting before the 

8 period ‘‘and any other clearing organization with 

9 which such clearing organization has a netting con10 tract’’; 

11 (4) by amending paragraph (14)(A)(i) to read 

12 as follows: 

13 ‘‘(i) means a contract or agreement 

14 between 2 or more financial institutions, 

15 clearing organizations, or members that 

16 provides for netting present or future pay17 ment obligations or payment entitlements 

18 (including liquidation or close out values 

19 relating to such obligations or entitle20 ments) among the parties to the agree21 ment; and’’; and 

22 (5) by adding at the end the following new 

23 paragraph: 

24 ‘‘(15) PAYMENT.—The term ‘payment’ means a 

25 payment of United States dollars, another currency, 
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1 or a composite currency, and a noncash delivery, in2 cluding a payment or delivery to liquidate an 

3 unmatured obligation.’’. 

4 (b) ENFORCEABILITY OF BILATERAL NETTING CON5 TRACTS.—Section 403 of the Federal Deposit Insurance 

6 Corporation Improvement Act of 1991 (12 U.S.C. 4403) 

7 is amended— 

8 (1) by striking subsection (a) and inserting the 

9 following: 

10 ‘‘(a) GENERAL RULE.—Notwithstanding any other 

11 provision of State or Federal law (other than paragraphs 

12 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 

13 Deposit Insurance Act, paragraphs (8)(E), (8)(F), and 

14 (10)(B) of section 207(c) of the Federal Credit Union Act, 

15 or any order authorized under section 5(b)(2) of the Secu16 rities Investor Protection Act of 1970), the covered con17 tractual payment obligations and the covered contractual 

18 payment entitlements between any 2 financial institutions 

19 shall be netted in accordance with, and subject to the con20 ditions of, the terms of any applicable netting contract (ex21 cept as provided in section 561(b)(2) of title 11, United 

22 States Code).’’; and 

23 (2) by adding at the end the following new sub24 section: 
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1 ‘‘(f) ENFORCEABILITY OF SECURITY AGREE2 MENTS.—The provisions of any security agreement or ar3 rangement or other credit enhancement related to one or 

4 more netting contracts between any 2 financial institu5 tions shall be enforceable in accordance with their terms 

6 (except as provided in section 561(b)(2) of title 11, United 

7 States Code), and shall not be stayed, avoided, or other8 wise limited by any State or Federal law (other than para9 graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the 

10 Federal Deposit Insurance Act, paragraphs (8)(E), 

11 (8)(F), and (10)(B) of section 207(c) of the Federal Cred12 it Union Act, and section 5(b)(2) of the Securities Investor 

13 Protection Act of 1970).’’. 

14 (c) ENFORCEABILITY OF CLEARING ORGANIZATION

15 NETTING CONTRACTS.—Section 404 of the Federal De16 posit Insurance Corporation Improvement Act of 1991 (12 

17 U.S.C. 4404) is amended— 

18 (1) by striking subsection (a) and inserting the 

19 following: 

20 ‘‘(a) GENERAL RULE.—Notwithstanding any other 

21 provision of State or Federal law (other than paragraphs 

22 (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 

23 Deposit Insurance Act, paragraphs (8)(E), (8)(F), and 

24 (10)(B) of section 207(c) of the Federal Credit Union Act, 

25 and any order authorized under section 5(b)(2) of the Se-
385 

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1 curities Investor Protection Act of 1970), the covered con2 tractual payment obligations and the covered contractual 

3 payment entitlements of a member of a clearing organiza4 tion to and from all other members of a clearing organiza5 tion shall be netted in accordance with and subject to the 

6 conditions of any applicable netting contract (except as 

7 provided in section 561(b)(2) of title 11, United States 

8 Code).’’; and 

9 (2) by adding at the end the following new sub10 section: 

11 ‘‘(h) ENFORCEABILITY OF SECURITY AGREE12 MENTS.—The provisions of any security agreement or ar13 rangement or other credit enhancement related to one or 

14 more netting contracts between any 2 members of a clear15 ing organization shall be enforceable in accordance with 

16 their terms (except as provided in section 561(b)(2) of 

17 title 11, United States Code), and shall not be stayed, 

18 avoided, or otherwise limited by any State or Federal law 

19 (other than paragraphs (8)(E), (8)(F), and (10)(B) of sec20 tion 11(e) of the Federal Deposit Insurance Act, para21 graphs (8)(E), (8)(F), and (10)(B) of section 207(c) of 

22 the Federal Credit Union Act, and section 5(b)(2) of the 

23 Securities Investor Protection Act of 1970).’’. 

24 (d) ENFORCEABILITY OF CONTRACTS WITH UNIN25 SURED NATIONAL BANKS, UNINSURED FEDERAL
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1 BRANCHES AND AGENCIES, CERTAIN UNINSURED STATE

2 MEMBER BANKS, AND EDGE ACT CORPORATIONS.—The 

3 Federal Deposit Insurance Corporation Improvement Act 

4 of 1991 (12 U.S.C. 4401 et seq.) is amended— 

5 (1) by redesignating section 407 as section 

6 407A; and 

7 (2) by inserting after section 406 the following 

8 new section: 

9 ‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED 

10 NATIONAL BANKS, UNINSURED FEDERAL 

11 BRANCHES AND AGENCIES, CERTAIN UNIN12 SURED STATE MEMBER BANKS, AND EDGE 

13 ACT CORPORATIONS. 

14 ‘‘(a) IN GENERAL.—Notwithstanding any other pro15 vision of law, paragraphs (8), (9), (10), and (11) of section 

16 11(e) of the Federal Deposit Insurance Act shall apply 

17 to an uninsured national bank or uninsured Federal 

18 branch or Federal agency, a corporation chartered under 

19 section 25A of the Federal Reserve Act, or an uninsured 

20 State member bank which operates, or operates as, a mul21 tilateral clearing organization pursuant to section 409 of 

22 this Act, except that for such purpose— 

23 ‘‘(1) any reference to the ‘Corporation as re24 ceiver’ or ‘the receiver or the Corporation’ shall refer 

25 to the receiver appointed by the Comptroller of the 
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1 Currency in the case of an uninsured national bank 

2 or uninsured Federal branch or agency, or to the re3 ceiver appointed by the Board of Governors of the 

4 Federal Reserve System in the case of a corporation 

5 chartered under section 25A of the Federal Reserve 

6 Act or an uninsured State member bank; 

7 ‘‘(2) any reference to the ‘Corporation’ (other 

8 than in section 11(e)(8)(D) of such Act), the ‘Cor9 poration, whether acting as such or as conservator 

10 or receiver’, a ‘receiver’, or a ‘conservator’ shall refer 

11 to the receiver or conservator appointed by the 

12 Comptroller of the Currency in the case of an unin13 sured national bank or uninsured Federal branch or 

14 agency, or to the receiver or conservator appointed 

15 by the Board of Governors of the Federal Reserve 

16 System in the case of a corporation chartered under 

17 section 25A of the Federal Reserve Act or an unin18 sured State member bank; and 

19 ‘‘(3) any reference to an ‘insured depository in20 stitution’ or ‘depository institution’ shall refer to an 

21 uninsured national bank, an uninsured Federal 

22 branch or Federal agency, a corporation chartered 

23 under section 25A of the Federal Reserve Act, or an 

24 uninsured State member bank which operates, or op-
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1 erates as, a multilateral clearing organization pursu2 ant to section 409 of this Act. 

3 ‘‘(b) LIABILITY.—The liability of a receiver or conser4 vator of an uninsured national bank, uninsured Federal 

5 branch or agency, a corporation chartered under section 

6 25A of the Federal Reserve Act, or an uninsured State 

7 member bank which operates, or operates as, a multilat8 eral clearing organization pursuant to section 409 of this 

9 Act, shall be determined in the same manner and subject 

10 to the same limitations that apply to receivers and con11 servators of insured depository institutions under section 

12 11(e) of the Federal Deposit Insurance Act. 

13 ‘‘(c) REGULATORY AUTHORITY.— 

14 ‘‘(1) IN GENERAL.—The Comptroller of the 

15 Currency in the case of an uninsured national bank 

16 or uninsured Federal branch or agency and the 

17 Board of Governors of the Federal Reserve System 

18 in the case of a corporation chartered under section 

19 25A of the Federal Reserve Act, or an uninsured 

20 State member bank that operates, or operates as, a 

21 multilateral clearing organization pursuant to sec22 tion 409 of this Act, in consultation with the Fed23 eral Deposit Insurance Corporation, may each pro24 mulgate regulations solely to implement this section. 
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1 ‘‘(2) SPECIFIC REQUIREMENT.—In promul2 gating regulations, limited solely to implementing 

3 paragraphs (8), (9), (10), and (11) of section 11(e) 

4 of the Federal Deposit Insurance Act, the Comp5 troller of the Currency and the Board of Governors 

6 of the Federal Reserve System each shall ensure 

7 that the regulations generally are consistent with the 

8 regulations and policies of the Federal Deposit In9 surance Corporation adopted pursuant to the Fed10 eral Deposit Insurance Act. 

11 ‘‘(d) DEFINITIONS.—For purposes of this section, the 

12 terms ‘Federal branch’, ‘Federal agency’, and ‘foreign 

13 bank’ have the same meanings as in section 1(b) of the 

14 International Banking Act of 1978.’’. 

15 SEC. 907. BANKRUPTCY LAW AMENDMENTS. 

16 (a) DEFINITIONS OF FORWARD CONTRACT, REPUR17 CHASE AGREEMENT, SECURITIES CLEARING AGENCY, 

18 SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU19 RITIES CONTRACT.—Title 11, United States Code, is 

20 amended— 

21 (1) in section 101— 

22 (A) in paragraph (25)— 

23 (i) by striking ‘‘means a contract’’ 

24 and inserting ‘‘means— 

25 ‘‘(A) a contract’’; 
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1 (ii) by striking ‘‘, or any combination 

2 thereof or option thereon;’’ and inserting 

3 ‘‘, or any other similar agreement;’’; and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(B) any combination of agreements or 

7 transactions referred to in subparagraphs (A) 

8 and (C); 

9 ‘‘(C) any option to enter into an agreement 

10 or transaction referred to in subparagraph (A) 

11 or (B); 

12 ‘‘(D) a master agreement that provides for 

13 an agreement or transaction referred to in sub14 paragraph (A), (B), or (C), together with all 

15 supplements to any such master agreement, 

16 without regard to whether such master agree17 ment provides for an agreement or transaction 

18 that is not a forward contract under this para19 graph, except that such master agreement shall 

20 be considered to be a forward contract under 

21 this paragraph only with respect to each agree22 ment or transaction under such master agree23 ment that is referred to in subparagraph (A), 

24 (B), or (C); or 
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1 ‘‘(E) any security agreement or arrange2 ment, or other credit enhancement related to 

3 any agreement or transaction referred to in 

4 subparagraph (A), (B), (C), or (D), including 

5 any guarantee or reimbursement obligation by 

6 or to a forward contract merchant or financial 

7 participant in connection with any agreement or 

8 transaction referred to in any such subpara9 graph, but not to exceed the damages in con10 nection with any such agreement or transaction, 

11 measured in accordance with section 562;’’; 

12 (B) in paragraph (46), by striking ‘‘on any 

13 day during the period beginning 90 days before 

14 the date of’’ and inserting ‘‘at any time before’’; 

15 (C) by amending paragraph (47) to read 

16 as follows: 

17 ‘‘(47) ‘repurchase agreement’ (which definition 

18 also applies to a reverse repurchase agreement)— 

19 ‘‘(A) means— 

20 ‘‘(i) an agreement, including related 

21 terms, which provides for the transfer of 

22 one or more certificates of deposit, mort23 gage related securities (as defined in sec24 tion 3 of the Securities Exchange Act of 

25 1934), mortgage loans, interests in mort-
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1 gage related securities or mortgage loans, 

2 eligible bankers’ acceptances, qualified for3 eign government securities (defined as a 

4 security that is a direct obligation of, or 

5 that is fully guaranteed by, the central 

6 government of a member of the Organiza7 tion for Economic Cooperation and Devel8 opment), or securities that are direct obli9 gations of, or that are fully guaranteed by, 

10 the United States or any agency of the 

11 United States against the transfer of funds 

12 by the transferee of such certificates of de13 posit, eligible bankers’ acceptances, securi14 ties, mortgage loans, or interests, with a 

15 simultaneous agreement by such transferee 

16 to transfer to the transferor thereof certifi17 cates of deposit, eligible bankers’ accept18 ance, securities, mortgage loans, or inter19 ests of the kind described in this clause, at 

20 a date certain not later than 1 year after 

21 such transfer or on demand, against the 

22 transfer of funds; 

23 ‘‘(ii) any combination of agreements 

24 or transactions referred to in clauses (i) 

25 and (iii); 
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1 ‘‘(iii) an option to enter into an agree2 ment or transaction referred to in clause 

3 (i) or (ii); 

4 ‘‘(iv) a master agreement that pro5 vides for an agreement or transaction re6 ferred to in clause (i), (ii), or (iii), together 

7 with all supplements to any such master 

8 agreement, without regard to whether such 

9 master agreement provides for an agree10 ment or transaction that is not a repur11 chase agreement under this paragraph, ex12 cept that such master agreement shall be 

13 considered to be a repurchase agreement 

14 under this paragraph only with respect to 

15 each agreement or transaction under the 

16 master agreement that is referred to in 

17 clause (i), (ii), or (iii); or 

18 ‘‘(v) any security agreement or ar19 rangement or other credit enhancement re20 lated to any agreement or transaction re21 ferred to in clause (i), (ii), (iii), or (iv), in22 cluding any guarantee or reimbursement 

23 obligation by or to a repo participant or fi24 nancial participant in connection with any 

25 agreement or transaction referred to in 
394 

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1 any such clause, but not to exceed the 

2 damages in connection with any such 

3 agreement or transaction, measured in ac4 cordance with section 562 of this title; and 

5 ‘‘(B) does not include a repurchase obliga6 tion under a participation in a commercial 

7 mortgage loan;’’; 

8 (D) in paragraph (48), by inserting ‘‘, or 

9 exempt from such registration under such sec10 tion pursuant to an order of the Securities and 

11 Exchange Commission,’’ after ‘‘1934’’; and 

12 (E) by amending paragraph (53B) to read 

13 as follows: 

14 ‘‘(53B) ‘swap agreement’— 

15 ‘‘(A) means— 

16 ‘‘(i) any agreement, including the 

17 terms and conditions incorporated by ref18 erence in such agreement, which is— 

19 ‘‘(I) an interest rate swap, op20 tion, future, or forward agreement, in21 cluding a rate floor, rate cap, rate col22 lar, cross-currency rate swap, and 

23 basis swap; 

24 ‘‘(II) a spot, same day-tomorrow, 

25 tomorrow-next, forward, or other for-
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1 eign exchange or precious metals 

2 agreement; 

3 ‘‘(III) a currency swap, option, 

4 future, or forward agreement; 

5 ‘‘(IV) an equity index or equity 

6 swap, option, future, or forward 

7 agreement; 

8 ‘‘(V) a debt index or debt swap, 

9 option, future, or forward agreement; 

10 ‘‘(VI) a total return, credit 

11 spread or credit swap, option, future, 

12 or forward agreement; 

13 ‘‘(VII) a commodity index or a 

14 commodity swap, option, future, or 

15 forward agreement; or 

16 ‘‘(VIII) a weather swap, weather 

17 derivative, or weather option; 

18 ‘‘(ii) any agreement or transaction 

19 that is similar to any other agreement or 

20 transaction referred to in this paragraph 

21 and that— 

22 ‘‘(I) is of a type that has been, is 

23 presently, or in the future becomes, 

24 the subject of recurrent dealings in 

25 the swap markets (including terms 
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1 and conditions incorporated by ref2 erence therein); and 

3 ‘‘(II) is a forward, swap, future, 

4 or option on one or more rates, cur5 rencies, commodities, equity securities, 

6 or other equity instruments, debt se7 curities or other debt instruments, 

8 quantitative measures associated with 

9 an occurrence, extent of an occur10 rence, or contingency associated with 

11 a financial, commercial, or economic 

12 consequence, or economic or financial 

13 indices or measures of economic or fi14 nancial risk or value; 

15 ‘‘(iii) any combination of agreements 

16 or transactions referred to in this subpara17 graph; 

18 ‘‘(iv) any option to enter into an 

19 agreement or transaction referred to in 

20 this subparagraph; 

21 ‘‘(v) a master agreement that provides 

22 for an agreement or transaction referred to 

23 in clause (i), (ii), (iii), or (iv), together 

24 with all supplements to any such master 

25 agreement, and without regard to whether 
397 

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1 the master agreement contains an agree2 ment or transaction that is not a swap 

3 agreement under this paragraph, except 

4 that the master agreement shall be consid5 ered to be a swap agreement under this 

6 paragraph only with respect to each agree7 ment or transaction under the master 

8 agreement that is referred to in clause (i), 

9 (ii), (iii), or (iv); or 

10 ‘‘(vi) any security agreement or ar11 rangement or other credit enhancement re12 lated to any agreements or transactions re13 ferred to in clause (i) through (v), includ14 ing any guarantee or reimbursement obli15 gation by or to a swap participant or fi16 nancial participant in connection with any 

17 agreement or transaction referred to in 

18 any such clause, but not to exceed the 

19 damages in connection with any such 

20 agreement or transaction, measured in ac21 cordance with section 562; and 

22 ‘‘(B) is applicable for purposes of this title 

23 only, and shall not be construed or applied so 

24 as to challenge or affect the characterization, 

25 definition, or treatment of any swap agreement 
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1 under any other statute, regulation, or rule, in2 cluding the Securities Act of 1933, the Securi3 ties Exchange Act of 1934, the Public Utility 

4 Holding Company Act of 1935, the Trust In5 denture Act of 1939, the Investment Company 

6 Act of 1940, the Investment Advisers Act of 

7 1940, the Securities Investor Protection Act of 

8 1970, the Commodity Exchange Act, the 

9 Gramm-Leach-Bliley Act, and the Legal Cer10 tainty for Bank Products Act of 2000;’’; 

11 (2) in section 741(7), by striking paragraph (7) 

12 and inserting the following: 

13 ‘‘(7) ‘securities contract’— 

14 ‘‘(A) means— 

15 ‘‘(i) a contract for the purchase, sale, 

16 or loan of a security, a certificate of de17 posit, a mortgage loan or any interest in a 

18 mortgage loan, a group or index of securi19 ties, certificates of deposit, or mortgage 

20 loans or interests therein (including an in21 terest therein or based on the value there22 of), or option on any of the foregoing, in23 cluding an option to purchase or sell any 

24 such security, certificate of deposit, mort25 gage loan, interest, group or index, or op-
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1 tion, and including any repurchase or re2 verse repurchase transaction on any such 

3 security, certificate of deposit, mortgage 

4 loan, interest, group or index, or option; 

5 ‘‘(ii) any option entered into on a na6 tional securities exchange relating to for7 eign currencies; 

8 ‘‘(iii) the guarantee by or to any secu9 rities clearing agency of a settlement of 

10 cash, securities, certificates of deposit, 

11 mortgage loans or interests therein, group 

12 or index of securities, or mortgage loans or 

13 interests therein (including any interest 

14 therein or based on the value thereof), or 

15 option on any of the foregoing, including 

16 an option to purchase or sell any such se17 curity, certificate of deposit, mortgage 

18 loan, interest, group or index, or option; 

19 ‘‘(iv) any margin loan; 

20 ‘‘(v) any other agreement or trans21 action that is similar to an agreement or 

22 transaction referred to in this subpara23 graph; 
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1 ‘‘(vi) any combination of the agree2 ments or transactions referred to in this 

3 subparagraph; 

4 ‘‘(vii) any option to enter into any 

5 agreement or transaction referred to in 

6 this subparagraph; 

7 ‘‘(viii) a master agreement that pro8 vides for an agreement or transaction re9 ferred to in clause (i), (ii), (iii), (iv), (v), 

10 (vi), or (vii), together with all supplements 

11 to any such master agreement, without re12 gard to whether the master agreement pro13 vides for an agreement or transaction that 

14 is not a securities contract under this sub15 paragraph, except that such master agree16 ment shall be considered to be a securities 

17 contract under this subparagraph only with 

18 respect to each agreement or transaction 

19 under such master agreement that is re20 ferred to in clause (i), (ii), (iii), (iv), (v), 

21 (vi), or (vii); or 

22 ‘‘(ix) any security agreement or ar23 rangement or other credit enhancement re24 lated to any agreement or transaction re25 ferred to in this subparagraph, including 
401 

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1 any guarantee or reimbursement obligation 

2 by or to a stockbroker, securities clearing 

3 agency, financial institution, or financial 

4 participant in connection with any agree5 ment or transaction referred to in this sub6 paragraph, but not to exceed the damages 

7 in connection with any such agreement or 

8 transaction, measured in accordance with 

9 section 562; and 

10 ‘‘(B) does not include any purchase, sale, 

11 or repurchase obligation under a participation 

12 in a commercial mortgage loan;’’; and 

13 (3) in section 761(4)— 

14 (A) by striking ‘‘or’’ at the end of subpara15 graph (D); and 

16 (B) by adding at the end the following: 

17 ‘‘(F) any other agreement or transaction 

18 that is similar to an agreement or transaction 

19 referred to in this paragraph; 

20 ‘‘(G) any combination of the agreements or 

21 transactions referred to in this paragraph; 

22 ‘‘(H) any option to enter into an agree23 ment or transaction referred to in this para24 graph; 
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1 ‘‘(I) a master agreement that provides for 

2 an agreement or transaction referred to in sub3 paragraph (A), (B), (C), (D), (E), (F), (G), or 

4 (H), together with all supplements to such mas5 ter agreement, without regard to whether the 

6 master agreement provides for an agreement or 

7 transaction that is not a commodity contract 

8 under this paragraph, except that the master 

9 agreement shall be considered to be a com10 modity contract under this paragraph only with 

11 respect to each agreement or transaction under 

12 the master agreement that is referred to in sub13 paragraph (A), (B), (C), (D), (E), (F), (G), or 

14 (H); or 

15 ‘‘(J) any security agreement or arrange16 ment or other credit enhancement related to 

17 any agreement or transaction referred to in this 

18 paragraph, including any guarantee or reim19 bursement obligation by or to a commodity 

20 broker or financial participant in connection 

21 with any agreement or transaction referred to 

22 in this paragraph, but not to exceed the dam23 ages in connection with any such agreement or 

24 transaction, measured in accordance with sec25 tion 562;’’. 
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1 (b) DEFINITIONS OF FINANCIAL INSTITUTION, FI2 NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER3 CHANT.—Section 101 of title 11, United States Code, is 

4 amended— 

5 (1) by striking paragraph (22) and inserting 

6 the following: 

7 ‘‘(22) ‘financial institution’ means— 

8 ‘‘(A) a Federal reserve bank, or an entity 

9 (domestic or foreign) that is a commercial or 

10 savings bank, industrial savings bank, savings 

11 and loan association, trust company, federally12 insured credit union, or receiver, liquidating 

13 agent, or conservator for such entity and, when 

14 any such Federal reserve bank, receiver, liqui15 dating agent, conservator or entity is acting as 

16 agent or custodian for a customer in connection 

17 with a securities contract (as defined in section 

18 741) such customer; or 

19 ‘‘(B) in connection with a securities con20 tract (as defined in section 741) an investment 

21 company registered under the Investment Com22 pany Act of 1940;’’; 

23 (2) by inserting after paragraph (22) the fol24 lowing: 

25 ‘‘(22A) ‘financial participant’ means— 
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1 ‘‘(A) an entity that, at the time it enters 

2 into a securities contract, commodity contract, 

3 swap agreement, repurchase agreement, or for4 ward contract, or at the time of the date of the 

5 filing of the petition, has one or more agree6 ments or transactions described in paragraph 

7 (1), (2), (3), (4), (5), or (6) of section 561(a) 

8 with the debtor or any other entity (other than 

9 an affiliate) of a total gross dollar value of not 

10 less than $1,000,000,000 in notional or actual 

11 principal amount outstanding on any day dur12 ing the previous 15-month period, or has gross 

13 mark-to-market positions of not less than 

14 $100,000,000 (aggregated across 

15 counterparties) in one or more such agreements 

16 or transactions with the debtor or any other en17 tity (other than an affiliate) on any day during 

18 the previous 15-month period; or 

19 ‘‘(B) a clearing organization (as defined in 

20 section 402 of the Federal Deposit Insurance 

21 Corporation Improvement Act of 1991);’’; and 

22 (3) by striking paragraph (26) and inserting 

23 the following: 

24 ‘‘(26) ‘forward contract merchant’ means a 

25 Federal reserve bank, or an entity the business of 
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1 which consists in whole or in part of entering into 

2 forward contracts as or with merchants in a com3 modity (as defined in section 761) or any similar 

4 good, article, service, right, or interest which is pres5 ently or in the future becomes the subject of dealing 

6 in the forward contract trade;’’. 

7 (c) DEFINITION OF MASTER NETTING AGREEMENT

8 AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec9 tion 101 of title 11, United States Code, is amended by 

10 inserting after paragraph (38) the following new para11 graphs: 

12 ‘‘(38A) ‘master netting agreement’— 

13 ‘‘(A) means an agreement providing for 

14 the exercise of rights, including rights of net15 ting, setoff, liquidation, termination, accelera16 tion, or close out, under or in connection with 

17 one or more contracts that are described in any 

18 one or more of paragraphs (1) through (5) of 

19 section 561(a), or any security agreement or ar20 rangement or other credit enhancement related 

21 to one or more of the foregoing, including any 

22 guarantee or reimbursement obligation related 

23 to 1 or more of the foregoing; and 

24 ‘‘(B) if the agreement contains provisions 

25 relating to agreements or transactions that are 
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1 not contracts described in paragraphs (1) 

2 through (5) of section 561(a), shall be deemed 

3 to be a master netting agreement only with re4 spect to those agreements or transactions that 

5 are described in any one or more of paragraphs 

6 (1) through (5) of section 561(a); 

7 ‘‘(38B) ‘master netting agreement participant’ 

8 means an entity that, at any time before the date of 

9 the filing of the petition, is a party to an out10 standing master netting agreement with the debt11 or;’’. 

12 (d) SWAP AGREEMENTS, SECURITIES CONTRACTS, 

13 COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR14 CHASE AGREEMENTS, AND MASTER NETTING AGREE15 MENTS UNDER THE AUTOMATIC-STAY.— 

16 (1) IN GENERAL.—Section 362(b) of title 11, 

17 United States Code, as amended by sections 224, 

18 303, 311, 401, and 718, is amended— 

19 (A) in paragraph (6), by inserting ‘‘, 

20 pledged to, under the control of,’’ after ‘‘held 

21 by’’; 

22 (B) in paragraph (7), by inserting ‘‘, 

23 pledged to, under the control of,’’ after ‘‘held 

24 by’’; 
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1 (C) by striking paragraph (17) and insert2 ing the following: 

3 ‘‘(17) under subsection (a), of the setoff by a 

4 swap participant or financial participant of a mutual 

5 debt and claim under or in connection with one or 

6 more swap agreements that constitutes the setoff of 

7 a claim against the debtor for any payment or other 

8 transfer of property due from the debtor under or in 

9 connection with any swap agreement against any 

10 payment due to the debtor from the swap partici11 pant or financial participant under or in connection 

12 with any swap agreement or against cash, securities, 

13 or other property held by, pledged to, under the con14 trol of, or due from such swap participant or finan15 cial participant to margin, guarantee, secure, or set16 tle any swap agreement;’’; and 

17 (D) by inserting after paragraph (26) the 

18 following: 

19 ‘‘(27) under subsection (a), of the setoff by a 

20 master netting agreement participant of a mutual 

21 debt and claim under or in connection with one or 

22 more master netting agreements or any contract or 

23 agreement subject to such agreements that con24 stitutes the setoff of a claim against the debtor for 

25 any payment or other transfer of property due from 
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1 the debtor under or in connection with such agree2 ments or any contract or agreement subject to such 

3 agreements against any payment due to the debtor 

4 from such master netting agreement participant 

5 under or in connection with such agreements or any 

6 contract or agreement subject to such agreements or 

7 against cash, securities, or other property held by, 

8 pledged to, under the control of, or due from such 

9 master netting agreement participant to margin, 

10 guarantee, secure, or settle such agreements or any 

11 contract or agreement subject to such agreements, 

12 to the extent that such participant is eligible to exer13 cise such offset rights under paragraph (6), (7), or 

14 (17) for each individual contract covered by the mas15 ter netting agreement in issue; and’’. 

16 (2) LIMITATION.—Section 362 of title 11, 

17 United States Code, as amended by sections 106, 

18 305, 311, and 441, is amended by adding at the end 

19 the following: 

20 ‘‘(o) The exercise of rights not subject to the stay 

21 arising under subsection (a) pursuant to paragraph (6), 

22 (7), (17), or (27) of subsection (b) shall not be stayed 

23 by any order of a court or administrative agency in any 

24 proceeding under this title.’’. 
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1 (e) LIMITATION OF AVOIDANCE POWERS UNDER

2 MASTER NETTING AGREEMENT.—Section 546 of title 11, 

3 United States Code, is amended— 

4 (1) in subsection (g) (as added by section 103 

5 of Public Law 101–311)— 

6 (A) by striking ‘‘under a swap agreement’’; 

7 (B) by striking ‘‘in connection with a swap 

8 agreement’’ and inserting ‘‘under or in connec9 tion with any swap agreement’’; and 

10 (C) by inserting ‘‘or financial participant’’ 

11 after ‘‘swap participant’’; and 

12 (2) by adding at the end the following: 

13 ‘‘(j) Notwithstanding sections 544, 545, 547, 

14 548(a)(1)(B), and 548(b) the trustee may not avoid a 

15 transfer made by or to a master netting agreement partici16 pant under or in connection with any master netting 

17 agreement or any individual contract covered thereby that 

18 is made before the commencement of the case, except 

19 under section 548(a)(1)(A) and except to the extent that 

20 the trustee could otherwise avoid such a transfer made 

21 under an individual contract covered by such master net22 ting agreement.’’. 

23 (f) FRAUDULENT TRANSFERS OF MASTER NETTING

24 AGREEMENTS.—Section 548(d)(2) of title 11, United 

25 States Code, is amended— 
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1 (1) in subparagraph (C), by striking ‘‘and’’ at 

2 the end; 

3 (2) in subparagraph (D), by striking the period 

4 and inserting ‘‘; and’’; and 

5 (3) by adding at the end the following new sub6 paragraph: 

7 ‘‘(E) a master netting agreement participant 

8 that receives a transfer in connection with a master 

9 netting agreement or any individual contract covered 

10 thereby takes for value to the extent of such trans11 fer, except that, with respect to a transfer under any 

12 individual contract covered thereby, to the extent 

13 that such master netting agreement participant oth14 erwise did not take (or is otherwise not deemed to 

15 have taken) such transfer for value.’’. 

16 (g) TERMINATION OR ACCELERATION OF SECURITIES

17 CONTRACTS.—Section 555 of title 11, United States Code, 

18 is amended— 

19 (1) by amending the section heading to read as 

20 follows: 

21 ‘‘§ 555. Contractual right to liquidate, terminate, or 

22 accelerate a securities contract’’; 

23 and 
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1 (2) in the first sentence, by striking ‘‘liquida2 tion’’ and inserting ‘‘liquidation, termination, or ac3 celeration’’. 

4 (h) TERMINATION OR ACCELERATION OF COMMOD5 ITIES OR FORWARD CONTRACTS.—Section 556 of title 11, 

6 United States Code, is amended— 

7 (1) by amending the section heading to read as 

8 follows: 

9 ‘‘§ 556. Contractual right to liquidate, terminate, or 

10 accelerate a commodities contract or for11 ward contract’’; 

12 (2) in the first sentence, by striking ‘‘liquida13 tion’’ and inserting ‘‘liquidation, termination, or ac14 celeration’’; and 

15 (3) in the second sentence, by striking ‘‘As 

16 used’’ and all that follows through ‘‘right,’’ and in17 serting ‘‘As used in this section, the term ‘contrac18 tual right’ includes a right set forth in a rule or 

19 bylaw of a derivatives clearing organization (as de20 fined in the Commodity Exchange Act), a multilat21 eral clearing organization (as defined in the Federal 

22 Deposit Insurance Corporation Improvement Act of 

23 1991), a national securities exchange, a national se24 curities association, a securities clearing agency, a 

25 contract market designated under the Commodity 
412 

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1 Exchange Act, a derivatives transaction execution 

2 facility registered under the Commodity Exchange 

3 Act, or a board of trade (as defined in the Com4 modity Exchange Act) or in a resolution of the gov5 erning board thereof and a right,’’. 

6 (i) TERMINATION OR ACCELERATION OF REPUR7 CHASE AGREEMENTS.—Section 559 of title 11, United 

8 States Code, is amended— 

9 (1) by amending the section heading to read as 

10 follows: 

11 ‘‘§ 559. Contractual right to liquidate, terminate, or 

12 accelerate a repurchase agreement’’; 

13 (2) in the first sentence, by striking ‘‘liquida14 tion’’ and inserting ‘‘liquidation, termination, or ac15 celeration’’; and 

16 (3) in the third sentence, by striking ‘‘As used’’ 

17 and all that follows through ‘‘right,’’ and inserting 

18 ‘‘As used in this section, the term ‘contractual right’ 

19 includes a right set forth in a rule or bylaw of a de20 rivatives clearing organization (as defined in the 

21 Commodity Exchange Act), a multilateral clearing 

22 organization (as defined in the Federal Deposit In23 surance Corporation Improvement Act of 1991), a 

24 national securities exchange, a national securities as25 sociation, a securities clearing agency, a contract 
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1 market designated under the Commodity Exchange 

2 Act, a derivatives transaction execution facility reg3 istered under the Commodity Exchange Act, or a 

4 board of trade (as defined in the Commodity Ex5 change Act) or in a resolution of the governing 

6 board thereof and a right,’’. 

7 (j) LIQUIDATION, TERMINATION, OR ACCELERATION

8 OF SWAP AGREEMENTS.—Section 560 of title 11, United 

9 States Code, is amended— 

10 (1) by amending the section heading to read as 

11 follows: 

12 ‘‘§ 560. Contractual right to liquidate, terminate, or 

13 accelerate a swap agreement’’; 

14 (2) in the first sentence, by striking ‘‘termi15 nation of a swap agreement’’ and inserting ‘‘liquida16 tion, termination, or acceleration of one or more 

17 swap agreements’’; 

18 (3) by striking ‘‘in connection with any swap 

19 agreement’’ and inserting ‘‘in connection with the 

20 termination, liquidation, or acceleration of one or 

21 more swap agreements’’; and 

22 (4) in the second sentence, by striking ‘‘As 

23 used’’ and all that follows through ‘‘right,’’ and in24 serting ‘‘As used in this section, the term ‘contrac25 tual right’ includes a right set forth in a rule or 
414 

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1 bylaw of a derivatives clearing organization (as de2 fined in the Commodity Exchange Act), a multilat3 eral clearing organization (as defined in the Federal 

4 Deposit Insurance Corporation Improvement Act of 

5 1991), a national securities exchange, a national se6 curities association, a securities clearing agency, a 

7 contract market designated under the Commodity 

8 Exchange Act, a derivatives transaction execution 

9 facility registered under the Commodity Exchange 

10 Act, or a board of trade (as defined in the Com11 modity Exchange Act) or in a resolution of the gov12 erning board thereof and a right,’’. 

13 (k) LIQUIDATION, TERMINATION, ACCELERATION, OR

14 OFFSET UNDER A MASTER NETTING AGREEMENT AND

15 ACROSS CONTRACTS.— 

16 (1) IN GENERAL.—Title 11, United States 

17 Code, is amended by inserting after section 560 the 

18 following: 

19 ‘‘§ 561. Contractual right to terminate, liquidate, ac20 celerate, or offset under a master netting 

21 agreement and across contracts; pro22 ceedings under chapter 15 

23 ‘‘(a) Subject to subsection (b), the exercise of any 

24 contractual right, because of a condition of the kind speci25 fied in section 365(e)(1), to cause the termination, liquida-
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1 tion, or acceleration of or to offset or net termination val2 ues, payment amounts, or other transfer obligations aris3 ing under or in connection with one or more (or the termi4 nation, liquidation, or acceleration of one or more)— 

5 ‘‘(1) securities contracts, as defined in section 

6 741(7); 

7 ‘‘(2) commodity contracts, as defined in section 

8 761(4); 

9 ‘‘(3) forward contracts; 

10 ‘‘(4) repurchase agreements; 

11 ‘‘(5) swap agreements; or 

12 ‘‘(6) master netting agreements, 

13 shall not be stayed, avoided, or otherwise limited by oper14 ation of any provision of this title or by any order of a 

15 court or administrative agency in any proceeding under 

16 this title. 

17 ‘‘(b)(1) A party may exercise a contractual right de18 scribed in subsection (a) to terminate, liquidate, or accel19 erate only to the extent that such party could exercise such 

20 a right under section 555, 556, 559, or 560 for each indi21 vidual contract covered by the master netting agreement 

22 in issue. 

23 ‘‘(2) If a debtor is a commodity broker subject to sub24 chapter IV of chapter 7— 
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1 ‘‘(A) a party may not net or offset an obligation 

2 to the debtor arising under, or in connection with, 

3 a commodity contract traded on or subject to the 

4 rules of a contract market designated under the 

5 Commodity Exchange Act or a derivatives trans6 action execution facility registered under the Com7 modity Exchange Act against any claim arising 

8 under, or in connection with, other instruments, con9 tracts, or agreements listed in subsection (a) except 

10 to the extent that the party has positive net equity 

11 in the commodity accounts at the debtor, as cal12 culated under such subchapter; and 

13 ‘‘(B) another commodity broker may not net or 

14 offset an obligation to the debtor arising under, or 

15 in connection with, a commodity contract entered 

16 into or held on behalf of a customer of the debtor 

17 and traded on or subject to the rules of a contract 

18 market designated under the Commodity Exchange 

19 Act or a derivatives transaction execution facility 

20 registered under the Commodity Exchange Act 

21 against any claim arising under, or in connection 

22 with, other instruments, contracts, or agreements 

23 listed in subsection (a). 
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1 ‘‘(3) No provision of subparagraph (A) or (B) of 

2 paragraph (2) shall prohibit the offset of claims and obli3 gations that arise under— 

4 ‘‘(A) a cross-margining agreement or similar 

5 arrangement that has been approved by the Com6 modity Futures Trading Commission or submitted 

7 to the Commodity Futures Trading Commission 

8 under paragraph (1) or (2) of section 5c(c) of the 

9 Commodity Exchange Act and has not been abro10 gated or rendered ineffective by the Commodity Fu11 tures Trading Commission; or 

12 ‘‘(B) any other netting agreement between a 

13 clearing organization (as defined in section 761) and 

14 another entity that has been approved by the Com15 modity Futures Trading Commission. 

16 ‘‘(c) As used in this section, the term ‘contractual 

17 right’ includes a right set forth in a rule or bylaw of a 

18 derivatives clearing organization (as defined in the Com19 modity Exchange Act), a multilateral clearing organiza20 tion (as defined in the Federal Deposit Insurance Cor21 poration Improvement Act of 1991), a national securities 

22 exchange, a national securities association, a securities 

23 clearing agency, a contract market designated under the 

24 Commodity Exchange Act, a derivatives transaction execu25 tion facility registered under the Commodity Exchange 
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1 Act, or a board of trade (as defined in the Commodity 

2 Exchange Act) or in a resolution of the governing board 

3 thereof, and a right, whether or not evidenced in writing, 

4 arising under common law, under law merchant, or by rea5 son of normal business practice. 

6 ‘‘(d) Any provisions of this title relating to securities 

7 contracts, commodity contracts, forward contracts, repur8 chase agreements, swap agreements, or master netting 

9 agreements shall apply in a case under chapter 15, so that 

10 enforcement of contractual provisions of such contracts 

11 and agreements in accordance with their terms will not 

12 be stayed or otherwise limited by operation of any provi13 sion of this title or by order of a court in any case under 

14 this title, and to limit avoidance powers to the same extent 

15 as in a proceeding under chapter 7 or 11 of this title (such 

16 enforcement not to be limited based on the presence or 

17 absence of assets of the debtor in the United States).’’. 

18 (2) CONFORMING AMENDMENT.—The table of 

19 sections for chapter 5 of title 11, United States 

20 Code, is amended by inserting after the item relating 

21 to section 560 the following: 

‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a 

master netting agreement and across contracts; proceedings 

under chapter 15.’’. 

22 (l) COMMODITY BROKER LIQUIDATIONS.—Title 11, 

23 United States Code, is amended by inserting after section 

24 766 the following: 
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1 ‘‘§ 767. Commodity broker liquidation and forward 

2 contract merchants, commodity brokers, 

3 stockbrokers, financial institutions, fi4 nancial participants, securities clearing 

5 agencies, swap participants, repo partici6 pants, and master netting agreement par7 ticipants 

8 ‘‘Notwithstanding any other provision of this title, 

9 the exercise of rights by a forward contract merchant, 

10 commodity broker, stockbroker, financial institution, fi11 nancial participant, securities clearing agency, swap par12 ticipant, repo participant, or master netting agreement 

13 participant under this title shall not affect the priority of 

14 any unsecured claim it may have after the exercise of such 

15 rights.’’. 

16 (m) STOCKBROKER LIQUIDATIONS.—Title 11, 

17 United States Code, is amended by inserting after section 

18 752 the following: 

19 ‘‘§ 753. Stockbroker liquidation and forward contract 

20 merchants, commodity brokers, stock21 brokers, financial institutions, financial 

22 participants, securities clearing agencies, 

23 swap participants, repo participants, and 

24 master netting agreement participants 

25 ‘‘Notwithstanding any other provision of this title, 

26 the exercise of rights by a forward contract merchant, 
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1 commodity broker, stockbroker, financial institution, fi2 nancial participant, securities clearing agency, swap par3 ticipant, repo participant, or master netting agreement 

4 participant under this title shall not affect the priority of 

5 any unsecured claim it may have after the exercise of such 

6 rights.’’. 

7 (n) SETOFF.—Section 553 of title 11, United States 

8 Code, is amended— 

9 (1) in subsection (a)(2)(B)(ii), by inserting be10 fore the semicolon the following: ‘‘(except for a 

11 setoff of a kind described in section 362(b)(6), 

12 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 

13 560, or 561)’’; 

14 (2) in subsection (a)(3)(C), by inserting before 

15 the period the following: ‘‘(except for a setoff of a 

16 kind described in section 362(b)(6), 362(b)(7), 

17 362(b)(17), 362(b)(27), 555, 556, 559, 560, or 

18 561)’’; and 

19 (3) in subsection (b)(1), by striking 

20 ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 

21 362(b)(27), 555, 556, 559, 560, 561,’’. 

22 (o) SECURITIES CONTRACTS, COMMODITY CON23 TRACTS, AND FORWARD CONTRACTS.—Title 11, United 

24 States Code, is amended— 
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1 (1) in section 362(b)(6), by striking ‘‘financial 

2 institutions,’’ each place such term appears and in3 serting ‘‘financial institution, financial participant,’’; 

4 (2) in sections 362(b)(7) and 546(f), by insert5 ing ‘‘or financial participant’’ after ‘‘repo partici6 pant’’ each place such term appears; 

7 (3) in section 546(e), by inserting ‘‘financial 

8 participant,’’ after ‘‘financial institution,’’; 

9 (4) in section 548(d)(2)(B), by inserting ‘‘fi10 nancial participant,’’ after ‘‘financial institution,’’; 

11 (5) in section 548(d)(2)(C), by inserting ‘‘or fi12 nancial participant’’ after ‘‘repo participant’’; 

13 (6) in section 548(d)(2)(D), by inserting ‘‘or fi14 nancial participant’’ after ‘‘swap participant’’; 

15 (7) in section 555— 

16 (A) by inserting ‘‘financial participant,’’ 

17 after ‘‘financial institution,’’; and 

18 (B) by striking the second sentence and in19 serting the following: ‘‘As used in this section, 

20 the term ‘contractual right’ includes a right set 

21 forth in a rule or bylaw of a derivatives clearing 

22 organization (as defined in the Commodity Ex23 change Act), a multilateral clearing organiza24 tion (as defined in the Federal Deposit Insur25 ance Corporation Improvement Act of 1991), a 
422 

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1 national securities exchange, a national securi2 ties association, a securities clearing agency, a 

3 contract market designated under the Com4 modity Exchange Act, a derivatives transaction 

5 execution facility registered under the Com6 modity Exchange Act, or a board of trade (as 

7 defined in the Commodity Exchange Act), or in 

8 a resolution of the governing board thereof, and 

9 a right, whether or not in writing, arising under 

10 common law, under law merchant, or by reason 

11 of normal business practice.’’; 

12 (8) in section 556, by inserting ‘‘, financial par13 ticipant,’’ after ‘‘commodity broker’’; 

14 (9) in section 559, by inserting ‘‘or financial 

15 participant’’ after ‘‘repo participant’’ each place 

16 such term appears; and 

17 (10) in section 560, by inserting ‘‘or financial 

18 participant’’ after ‘‘swap participant’’. 

19 (p) CONFORMING AMENDMENTS.—Title 11, United 

20 States Code, is amended— 

21 (1) in the table of sections for chapter 5— 

22 (A) by amending the items relating to sec23 tions 555 and 556 to read as follows: 

‘‘555. Contractual right to liquidate, terminate, or accelerate a securities contract. 

‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract.’’; 
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1 and 

2 (B) by amending the items relating to sec3 tions 559 and 560 to read as follows: 

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase 

agreement. 

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’; 

4 and 

5 (2) in the table of sections for chapter 7— 

6 (A) by inserting after the item relating to 

7 section 766 the following: 

‘‘767. Commodity broker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, financial 

participants, securities clearing agencies, swap participants, 

repo participants, and master netting agreement participants.’’; 

8 and 

9 (B) by inserting after the item relating to 

10 section 752 the following: 

‘‘753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, financial participants, 

securities clearing agencies, swap participants, repo participants, and master netting agreement participants.’’. 

11 SEC. 908. RECORDKEEPING REQUIREMENTS. 

12 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS.— 

13 Section 11(e)(8) of the Federal Deposit Insurance Act (12 

14 U.S.C. 1821(e)(8)) is amended by adding at the end the 

15 following new subparagraph: 

16 ‘‘(H) RECORDKEEPING REQUIREMENTS.— 

17 The Corporation, in consultation with the ap18 propriate Federal banking agencies, may pre19 scribe regulations requiring more detailed rec-
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1 ordkeeping by any insured depository institu2 tion with respect to qualified financial contracts 

3 (including market valuations) only if such in4 sured depository institution is in a troubled 

5 condition (as such term is defined by the Cor6 poration pursuant to section 32).’’. 

7 (b) INSURED CREDIT UNIONS.—Section 207(c)(8) of 

8 the Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is 

9 amended by adding at the end the following new subpara10 graph: 

11 ‘‘(H) RECORDKEEPING REQUIREMENTS.— 

12 The Board, in consultation with the appropriate 

13 Federal banking agencies, may prescribe regula14 tions requiring more detailed recordkeeping by 

15 any insured credit union with respect to quali16 fied financial contracts (including market valu17 ations) only if such insured credit union is in 

18 a troubled condition (as such term is defined by 

19 the Board pursuant to section 212).’’. 

20 SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECU21 TION REQUIREMENT. 

22 Section 13(e)(2) of the Federal Deposit Insurance 

23 Act (12 U.S.C. 1823(e)(2)) is amended to read as follows: 
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1 ‘‘(2) EXEMPTIONS FROM CONTEMPORANEOUS

2 EXECUTION REQUIREMENT.—An agreement to pro3 vide for the lawful collateralization of— 

4 ‘‘(A) deposits of, or other credit extension 

5 by, a Federal, State, or local governmental enti6 ty, or of any depositor referred to in section 

7 11(a)(2), including an agreement to provide col8 lateral in lieu of a surety bond; 

9 ‘‘(B) bankruptcy estate funds pursuant to 

10 section 345(b)(2) of title 11, United States 

11 Code; 

12 ‘‘(C) extensions of credit, including any 

13 overdraft, from a Federal reserve bank or Fed14 eral home loan bank; or 

15 ‘‘(D) one or more qualified financial con16 tracts, as defined in section 11(e)(8)(D), 

17 shall not be deemed invalid pursuant to paragraph 

18 (1)(B) solely because such agreement was not exe19 cuted contemporaneously with the acquisition of the 

20 collateral or because of pledges, delivery, or substi21 tution of the collateral made in accordance with such 

22 agreement.’’. 

23 SEC. 910. DAMAGE MEASURE. 

24 (a) IN GENERAL.—Title 11, United States Code, is 

25 amended— 
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1 (1) by inserting after section 561, as added by 

2 section 907, the following: 

3 ‘‘§ 562. Timing of damage measurement in connection 

4 with swap agreements, securities con5 tracts, forward contracts, commodity con6 tracts, repurchase agreements, and mas7 ter netting agreements 

8 ‘‘(a) If the trustee rejects a swap agreement, securi9 ties contract (as defined in section 741), forward contract, 

10 commodity contract (as defined in section 761), repur11 chase agreement, or master netting agreement pursuant 

12 to section 365(a), or if a forward contract merchant, 

13 stockbroker, financial institution, securities clearing agen14 cy, repo participant, financial participant, master netting 

15 agreement participant, or swap participant liquidates, ter16 minates, or accelerates such contract or agreement, dam17 ages shall be measured as of the earlier of— 

18 ‘‘(1) the date of such rejection; or 

19 ‘‘(2) the date or dates of such liquidation, ter20 mination, or acceleration. 

21 ‘‘(b) If there are not any commercially reasonable de22 terminants of value as of any date referred to in para23 graph (1) or (2) of subsection (a), damages shall be meas24 ured as of the earliest subsequent date or dates on which 

25 there are commercially reasonable determinants of value. 
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1 ‘‘(c) For the purposes of subsection (b), if damages 

2 are not measured as of the date or dates of rejection, liq3 uidation, termination, or acceleration, and the forward 

4 contract merchant, stockbroker, financial institution, secu5 rities clearing agency, repo participant, financial partici6 pant, master netting agreement participant, or swap par7 ticipant or the trustee objects to the timing of the meas8 urement of damages— 

9 ‘‘(1) the trustee, in the case of an objection by 

10 a forward contract merchant, stockbroker, financial 

11 institution, securities clearing agency, repo partici12 pant, financial participant, master netting agree13 ment participant, or swap participant; or 

14 ‘‘(2) the forward contract merchant, stock15 broker, financial institution, securities clearing agen16 cy, repo participant, financial participant, master 

17 netting agreement participant, or swap participant, 

18 in the case of an objection by the trustee, 

19 has the burden of proving that there were no commercially 

20 reasonable determinants of value as of such date or 

21 dates.’’; and 

22 (2) in the table of sections for chapter 5, by in23 serting after the item relating to section 561 (as 

24 added by section 907) the following new item: 

‘‘562. Timing of damage measure in connection with swap agreements, securities 

contracts, forward contracts, commodity contracts, repurchase 

agreements, or master netting agreements.’’. 
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1 (b) CLAIMS ARISING FROM REJECTION.—Section 

2 502(g) of title 11, United States Code, is amended— 

3 (1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(2) A claim for damages calculated in accordance 

6 with section 562 shall be allowed under subsection (a), (b), 

7 or (c), or disallowed under subsection (d) or (e), as if such 

8 claim had arisen before the date of the filing of the peti9 tion.’’. 

10 SEC. 911. SIPC STAY. 

11 Section 5(b)(2) of the Securities Investor Protection 

12 Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding 

13 at the end the following new subparagraph: 

14 ‘‘(C) EXCEPTION FROM STAY.— 

15 ‘‘(i) Notwithstanding section 362 of 

16 title 11, United States Code, neither the 

17 filing of an application under subsection 

18 (a)(3) nor any order or decree obtained by 

19 SIPC from the court shall operate as a 

20 stay of any contractual rights of a creditor 

21 to liquidate, terminate, or accelerate a se22 curities contract, commodity contract, for23 ward contract, repurchase agreement, swap 

24 agreement, or master netting agreement, 

25 as those terms are defined in sections 101, 
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1 741, and 761 of title 11, United States 

2 Code, to offset or net termination values, 

3 payment amounts, or other transfer obliga4 tions arising under or in connection with 

5 one or more of such contracts or agree6 ments, or to foreclose on any cash collat7 eral pledged by the debtor, whether or not 

8 with respect to one or more of such con9 tracts or agreements. 

10 ‘‘(ii) Notwithstanding clause (i), such 

11 application, order, or decree may operate 

12 as a stay of the foreclosure on, or disposi13 tion of, securities collateral pledged by the 

14 debtor, whether or not with respect to one 

15 or more of such contracts or agreements, 

16 securities sold by the debtor under a repur17 chase agreement, or securities lent under a 

18 securities lending agreement. 

19 ‘‘(iii) As used in this subparagraph, 

20 the term ‘contractual right’ includes a 

21 right set forth in a rule or bylaw of a na22 tional securities exchange, a national secu23 rities association, or a securities clearing 

24 agency, a right set forth in a bylaw of a 

25 clearing organization or contract market or 
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1 in a resolution of the governing board 

2 thereof, and a right, whether or not in 

3 writing, arising under common law, under 

4 law merchant, or by reason of normal busi5 ness practice.’’. 

6 TITLE X—PROTECTION OF FAM7 ILY FARMERS AND FAMILY 

8 FISHERMEN 

9 SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12. 

10 (a) REENACTMENT.— 

11 (1) IN GENERAL.—Chapter 12 of title 11, 

12 United States Code, as reenacted by section 149 of 

13 division C of the Omnibus Consolidated and Emer14 gency Supplemental Appropriations Act, 1999 (Pub15 lic Law 105–277), and as in effect on June 30, 

16 2005, is hereby reenacted. 

17 (2) EFFECTIVE DATE OF REENACTMENT.— 

18 Paragraph (1) shall take effect on July 1, 2005. 

19 (b) AMENDMENTS—Chapter 12 of title 11, United 

20 States Code, as reenacted by subsection (a), is amended 

21 by this Act. 

22 (c) CONFORMING AMENDMENT.—Section 302 of the 

23 Bankruptcy Judges, United States Trustees, and Family 

24 Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is 

25 amended by striking subsection (f). 
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1 SEC. 1002. DEBT LIMIT INCREASE. 

2 Section 104(b) of title 11, United States Code, as 

3 amended by section 226, is amended by inserting 

4 ‘‘101(18),’’ after ‘‘101(3),’’ each place it appears. 

5 SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL 

6 UNITS. 

7 (a) CONTENTS OF PLAN.—Section 1222(a)(2) of title 

8 11, United States Code, as amended by section 213, is 

9 amended to read as follows: 

10 ‘‘(2) provide for the full payment, in deferred 

11 cash payments, of all claims entitled to priority 

12 under section 507, unless— 

13 ‘‘(A) the claim is a claim owed to a govern14 mental unit that arises as a result of the sale, 

15 transfer, exchange, or other disposition of any 

16 farm asset used in the debtor’s farming oper17 ation, in which case the claim shall be treated 

18 as an unsecured claim that is not entitled to 

19 priority under section 507, but the debt shall be 

20 treated in such manner only if the debtor re21 ceives a discharge; or 

22 ‘‘(B) the holder of a particular claim 

23 agrees to a different treatment of that claim;’’. 

24 (b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) 

25 of title 11, United States Code, as so designated by section 
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1 719, is amended by striking ‘‘a State or local govern2 mental unit’’ and inserting ‘‘any governmental unit’’. 

3 (c) EFFECTIVE DATE; APPLICATION OF AMEND4 MENTS.—This section and the amendments made by this 

5 section shall take effect on the date of the enactment of 

6 this Act and shall not apply with respect to cases com7 menced under title 11 of the United States Code before 

8 such date. 

9 SEC. 1004. DEFINITION OF FAMILY FARMER. 

10 Section 101(18) of title 11, United States Code, is 

11 amended— 

12 (1) in subparagraph (A)— 

13 (A) by striking ‘‘$1,500,000’’ and inserting 

14 ‘‘$3,237,000’’; and 

15 (B) by striking ‘‘80’’ and inserting ‘‘50’’; 

16 and 

17 (2) in subparagraph (B)(ii)— 

18 (A) by striking ‘‘$1,500,000’’ and inserting 

19 ‘‘$3,237,000’’; and 

20 (B) by striking ‘‘80’’ and inserting ‘‘50’’. 
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1 SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY 

2 FARMER AND SPOUSE RECEIVE OVER 50 PER3 CENT OF INCOME FROM FARMING OPER4 ATION IN YEAR PRIOR TO BANKRUPTCY. 

5 Section 101(18)(A) of title 11, United States Code, 

6 is amended by striking ‘‘for the taxable year preceding the 

7 taxable year’’ and inserting the following: 

8 ‘‘for— 

9 ‘‘(i) the taxable year preceding; or 

10 ‘‘(ii) each of the 2d and 3d taxable 

11 years preceding; 

12 the taxable year’’. 

13 SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF 

14 DISPOSABLE INCOME. 

15 (a) CONFIRMATION OF PLAN.—Section 1225(b)(1) of 

16 title 11, United States Code, is amended— 

17 (1) in subparagraph (A) by striking ‘‘or’’ at the 

18 end; 

19 (2) in subparagraph (B) by striking the period 

20 at the end and inserting ‘‘; or’’; and 

21 (3) by adding at the end the following: 

22 ‘‘(C) the value of the property to be distributed 

23 under the plan in the 3-year period, or such longer 

24 period as the court may approve under section 

25 1222(c), beginning on the date that the first dis26 tribution is due under the plan is not less than the 
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1 debtor’s projected disposable income for such pe2 riod.’’. 

3 (b) MODIFICATION OF PLAN.—Section 1229 of title 

4 11, United States Code, is amended by adding at the end 

5 the following: 

6 ‘‘(d) A plan may not be modified under this section— 

7 ‘‘(1) to increase the amount of any payment 

8 due before the plan as modified becomes the plan; 

9 ‘‘(2) by anyone except the debtor, based on an 

10 increase in the debtor’s disposable income, to in11 crease the amount of payments to unsecured credi12 tors required for a particular month so that the ag13 gregate of such payments exceeds the debtor’s dis14 posable income for such month; or 

15 ‘‘(3) in the last year of the plan by anyone ex16 cept the debtor, to require payments that would 

17 leave the debtor with insufficient funds to carry on 

18 the farming operation after the plan is completed.’’. 

19 SEC. 1007. FAMILY FISHERMEN. 

20 (a) DEFINITIONS.—Section 101 of title 11, United 

21 States Code, is amended— 

22 (1) by inserting after paragraph (7) the fol23 lowing: 

24 ‘‘(7A) ‘commercial fishing operation’ means— 
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1 ‘‘(A) the catching or harvesting of fish, 

2 shrimp, lobsters, urchins, seaweed, shellfish, or 

3 other aquatic species or products of such spe4 cies; or 

5 ‘‘(B) for purposes of section 109 and chap6 ter 12, aquaculture activities consisting of rais7 ing for market any species or product described 

8 in subparagraph (A); 

9 ‘‘(7B) ‘commercial fishing vessel’ means a ves10 sel used by a family fisherman to carry out a com11 mercial fishing operation;’’; and 

12 (2) by inserting after paragraph (19) the fol13 lowing: 

14 ‘‘(19A) ‘family fisherman’ means— 

15 ‘‘(A) an individual or individual and spouse 

16 engaged in a commercial fishing operation— 

17 ‘‘(i) whose aggregate debts do not ex18 ceed $1,500,000 and not less than 80 per19 cent of whose aggregate noncontingent, liq20 uidated debts (excluding a debt for the 

21 principal residence of such individual or 

22 such individual and spouse, unless such 

23 debt arises out of a commercial fishing op24 eration), on the date the case is filed, arise 

25 out of a commercial fishing operation 
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1 owned or operated by such individual or 

2 such individual and spouse; and 

3 ‘‘(ii) who receive from such commer4 cial fishing operation more than 50 percent 

5 of such individual’s or such individual’s 

6 and spouse’s gross income for the taxable 

7 year preceding the taxable year in which 

8 the case concerning such individual or such 

9 individual and spouse was filed; or 

10 ‘‘(B) a corporation or partnership— 

11 ‘‘(i) in which more than 50 percent of 

12 the outstanding stock or equity is held 

13 by— 

14 ‘‘(I) 1 family that conducts the 

15 commercial fishing operation; or 

16 ‘‘(II) 1 family and the relatives 

17 of the members of such family, and 

18 such family or such relatives conduct 

19 the commercial fishing operation; and 

20 ‘‘(ii)(I) more than 80 percent of the 

21 value of its assets consists of assets related 

22 to the commercial fishing operation; 

23 ‘‘(II) its aggregate debts do not ex24 ceed $1,500,000 and not less than 80 per25 cent of its aggregate noncontingent, liq-
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1 uidated debts (excluding a debt for 1 

2 dwelling which is owned by such corpora3 tion or partnership and which a share4 holder or partner maintains as a principal 

5 residence, unless such debt arises out of a 

6 commercial fishing operation), on the date 

7 the case is filed, arise out of a commercial 

8 fishing operation owned or operated by 

9 such corporation or such partnership; and 

10 ‘‘(III) if such corporation issues stock, 

11 such stock is not publicly traded; 

12 ‘‘(19B) ‘family fisherman with regular annual 

13 income’ means a family fisherman whose annual in14 come is sufficiently stable and regular to enable such 

15 family fisherman to make payments under a plan 

16 under chapter 12 of this title;’’. 

17 (b) WHO MAY BE A DEBTOR.—Section 109(f) of title 

18 11, United States Code, is amended by inserting ‘‘or fam19 ily fisherman’’ after ‘‘family farmer’’. 

20 (c) CHAPTER 12.—Chapter 12 of title 11, United 

21 States Code, is amended— 

22 (1) in the chapter heading, by inserting ‘‘OR 

23 FISHERMAN’’ after ‘‘FAMILY FARMER’’; 

24 (2) in section 1203, by inserting ‘‘or commer25 cial fishing operation’’ after ‘‘farm’’; and 
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1 (3) in section 1206, by striking ‘‘if the property 

2 is farmland or farm equipment’’ and inserting ‘‘if 

3 the property is farmland, farm equipment, or prop4 erty used to carry out a commercial fishing oper5 ation (including a commercial fishing vessel)’’. 

6 (d) CLERICAL AMENDMENT.—In the table of chap7 ters for title 11, United States Code, the item relating to 

8 chapter 12, is amended to read as follows: 

‘‘12. Adjustments of Debts of a Family Farmer or Family 

Fisherman with Regular Annual Income ..... 1201’’. 

9 (e) APPLICABILITY.—Nothing in this section shall 

10 change, affect, or amend the Fishery Conservation and 

11 Management Act of 1976 (16 U.S.C. 1801 et seq.). 

12 TITLE XI—HEALTH CARE AND 

13 EMPLOYEE BENEFITS 

14 SEC. 1101. DEFINITIONS. 

15 (a) HEALTH CARE BUSINESS DEFINED.—Section 

16 101 of title 11, United States Code, as amended by section 

17 306, is amended— 

18 (1) by redesignating paragraph (27A) as para19 graph (27B); and 

20 (2) by inserting after paragraph (27) the fol21 lowing: 

22 ‘‘(27A) ‘health care business’— 

23 ‘‘(A) means any public or private entity 

24 (without regard to whether that entity is orga-
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1 nized for profit or not for profit) that is pri2 marily engaged in offering to the general public 

3 facilities and services for— 

4 ‘‘(i) the diagnosis or treatment of in5 jury, deformity, or disease; and 

6 ‘‘(ii) surgical, drug treatment, psy7 chiatric, or obstetric care; and 

8 ‘‘(B) includes— 

9 ‘‘(i) any— 

10 ‘‘(I) general or specialized hos11 pital; 

12 ‘‘(II) ancillary ambulatory, emer13 gency, or surgical treatment facility; 

14 ‘‘(III) hospice; 

15 ‘‘(IV) home health agency; and 

16 ‘‘(V) other health care institution 

17 that is similar to an entity referred to 

18 in subclause (I), (II), (III), or (IV); 

19 and 

20 ‘‘(ii) any long-term care facility, in21 cluding any— 

22 ‘‘(I) skilled nursing facility; 

23 ‘‘(II) intermediate care facility; 

24 ‘‘(III) assisted living facility; 

25 ‘‘(IV) home for the aged; 
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1 ‘‘(V) domiciliary care facility; and 

2 ‘‘(VI) health care institution that 

3 is related to a facility referred to in 

4 subclause (I), (II), (III), (IV), or (V), 

5 if that institution is primarily engaged 

6 in offering room, board, laundry, or 

7 personal assistance with activities of 

8 daily living and incidentals to activi9 ties of daily living;’’. 

10 (b) PATIENT AND PATIENT RECORDS DEFINED.— 

11 Section 101 of title 11, United States Code, is amended 

12 by inserting after paragraph (40) the following: 

13 ‘‘(40A) ‘patient’ means any individual who ob14 tains or receives services from a health care busi15 ness; 

16 ‘‘(40B) ‘patient records’ means any written doc17 ument relating to a patient or a record recorded in 

18 a magnetic, optical, or other form of electronic me19 dium;’’. 

20 (c) RULE OF CONSTRUCTION.—The amendments 

21 made by subsection (a) of this section shall not affect the 

22 interpretation of section 109(b) of title 11, United States 

23 Code. 
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1 SEC. 1102. DISPOSAL OF PATIENT RECORDS. 

2 (a) IN GENERAL.—Subchapter III of chapter 3 of 

3 title 11, United States Code, is amended by adding at the 

4 end the following: 

5 ‘‘§ 351. Disposal of patient records 

6 ‘‘If a health care business commences a case under 

7 chapter 7, 9, or 11, and the trustee does not have a suffi8 cient amount of funds to pay for the storage of patient 

9 records in the manner required under applicable Federal 

10 or State law, the following requirements shall apply: 

11 ‘‘(1) The trustee shall— 

12 ‘‘(A) promptly publish notice, in 1 or more 

13 appropriate newspapers, that if patient records 

14 are not claimed by the patient or an insurance 

15 provider (if applicable law permits the insur16 ance provider to make that claim) by the date 

17 that is 365 days after the date of that notifica18 tion, the trustee will destroy the patient 

19 records; and 

20 ‘‘(B) during the first 180 days of the 365- 

21 day period described in subparagraph (A), 

22 promptly attempt to notify directly each patient 

23 that is the subject of the patient records and 

24 appropriate insurance carrier concerning the 

25 patient records by mailing to the most recent 

26 known address of that patient, or a family 
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1 member or contact person for that patient, and 

2 to the appropriate insurance carrier an appro3 priate notice regarding the claiming or dis4 posing of patient records. 

5 ‘‘(2) If, after providing the notification under 

6 paragraph (1), patient records are not claimed dur7 ing the 365-day period described under that para8 graph, the trustee shall mail, by certified mail, at 

9 the end of such 365-day period a written request to 

10 each appropriate Federal agency to request permis11 sion from that agency to deposit the patient records 

12 with that agency, except that no Federal agency is 

13 required to accept patient records under this para14 graph. 

15 ‘‘(3) If, following the 365-day period described 

16 in paragraph (2) and after providing the notification 

17 under paragraph (1), patient records are not claimed 

18 by a patient or insurance provider, or request is not 

19 granted by a Federal agency to deposit such records 

20 with that agency, the trustee shall destroy those 

21 records by— 

22 ‘‘(A) if the records are written, shredding 

23 or burning the records; or 

24 ‘‘(B) if the records are magnetic, optical, 

25 or other electronic records, by otherwise de-
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1 stroying those records so that those records 

2 cannot be retrieved.’’. 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for subchapter III of chapter 3 of title 11, United States 

5 Code, is amended by adding at the end the following: 

‘‘351. Disposal of patient records.’’. 

6 SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS 

7 OF CLOSING A HEALTH CARE BUSINESS AND 

8 OTHER ADMINISTRATIVE EXPENSES. 

9 Section 503(b) of title 11, United States Code, as 

10 amended by section 445, is amended by adding at the end 

11 the following: 

12 ‘‘(8) the actual, necessary costs and expenses of 

13 closing a health care business incurred by a trustee 

14 or by a Federal agency (as defined in section 551(1) 

15 of title 5) or a department or agency of a State or 

16 political subdivision thereof, including any cost or 

17 expense incurred— 

18 ‘‘(A) in disposing of patient records in ac19 cordance with section 351; or 

20 ‘‘(B) in connection with transferring pa21 tients from the health care business that is in 

22 the process of being closed to another health 

23 care business; and’’. 
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1 SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA2 TIENT ADVOCATE. 

3 (a) OMBUDSMAN TO ACT AS PATIENT ADVOCATE.— 

4 (1) APPOINTMENT OF OMBUDSMAN.—Title 11, 

5 United States Code, as amended by section 232, is 

6 amended by inserting after section 332 the fol7 lowing: 

8 ‘‘§ 333. Appointment of patient care ombudsman 

9 ‘‘(a)(1) If the debtor in a case under chapter 7, 9, 

10 or 11 is a health care business, the court shall order, not 

11 later than 30 days after the commencement of the case, 

12 the appointment of an ombudsman to monitor the quality 

13 of patient care and to represent the interests of the pa14 tients of the health care business unless the court finds 

15 that the appointment of such ombudsman is not necessary 

16 for the protection of patients under the specific facts of 

17 the case. 

18 ‘‘(2)(A) If the court orders the appointment of an 

19 ombudsman under paragraph (1), the United States trust20 ee shall appoint 1 disinterested person (other than the 

21 United States trustee) to serve as such ombudsman. 

22 ‘‘(B) If the debtor is a health care business that pro23 vides long-term care, then the United States trustee may 

24 appoint the State Long-Term Care Ombudsman appointed 

25 under the Older Americans Act of 1965 for the State in 
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1 which the case is pending to serve as the ombudsman re2 quired by paragraph (1). 

3 ‘‘(C) If the United States trustee does not appoint 

4 a State Long-Term Care Ombudsman under subpara5 graph (B), the court shall notify the State Long-Term 

6 Care Ombudsman appointed under the Older Americans 

7 Act of 1965 for the State in which the case is pending, 

8 of the name and address of the person who is appointed 

9 under subparagraph (A). 

10 ‘‘(b) An ombudsman appointed under subsection (a) 

11 shall— 

12 ‘‘(1) monitor the quality of patient care pro13 vided to patients of the debtor, to the extent nec14 essary under the circumstances, including inter15 viewing patients and physicians; 

16 ‘‘(2) not later than 60 days after the date of 

17 appointment, and not less frequently than at 60-day 

18 intervals thereafter, report to the court after notice 

19 to the parties in interest, at a hearing or in writing, 

20 regarding the quality of patient care provided to pa21 tients of the debtor; and 

22 ‘‘(3) if such ombudsman determines that the 

23 quality of patient care provided to patients of the 

24 debtor is declining significantly or is otherwise being 

25 materially compromised, file with the court a motion 
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1 or a written report, with notice to the parties in in2 terest immediately upon making such determination. 

3 ‘‘(c)(1) An ombudsman appointed under subsection 

4 (a) shall maintain any information obtained by such om5 budsman under this section that relates to patients (in6 cluding information relating to patient records) as con7 fidential information. Such ombudsman may not review 

8 confidential patient records unless the court approves such 

9 review in advance and imposes restrictions on such om10 budsman to protect the confidentiality of such records. 

11 ‘‘(2) An ombudsman appointed under subsection 

12 (a)(2)(B) shall have access to patient records consistent 

13 with authority of such ombudsman under the Older Amer14 icans Act of 1965 and under non-Federal laws governing 

15 the State Long-Term Care Ombudsman program.’’. 

16 (2) CLERICAL AMENDMENT.—The table of sec17 tions for subchapter II of chapter 3 of title 11, 

18 United States Code, as amended by section 232, is 

19 amended by adding at the end the following: 

‘‘333. Appointment of ombudsman.’’. 

20 (b) COMPENSATION OF OMBUDSMAN.—Section 

21 330(a)(1) of title 11, United States Code, is amended— 

22 (1) in the matter preceding subparagraph (A), 

23 by inserting ‘‘an ombudsman appointed under sec24 tion 333, or’’ before ‘‘a professional person’’; and 
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1 (2) in subparagraph (A), by inserting ‘‘ombuds2 man,’’ before ‘‘professional person’’. 

3 SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO 

4 TRANSFER PATIENTS. 

5 (a) IN GENERAL.—Section 704(a) of title 11, United 

6 States Code, as amended by sections 102, 219, and 446, 

7 is amended by adding at the end the following: 

8 ‘‘(12) use all reasonable and best efforts to 

9 transfer patients from a health care business that is 

10 in the process of being closed to an appropriate 

11 health care business that— 

12 ‘‘(A) is in the vicinity of the health care 

13 business that is closing; 

14 ‘‘(B) provides the patient with services 

15 that are substantially similar to those provided 

16 by the health care business that is in the proc17 ess of being closed; and 

18 ‘‘(C) maintains a reasonable quality of 

19 care.’’. 

20 (b) CONFORMING AMENDMENT.—Section 1106(a)(1) 

21 of title 11, United States Code, as amended by section 

22 446, is amended by striking ‘‘and (11)’’ and inserting 

23 ‘‘(11), and (12)’’. 
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1 SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION 

2 NOT SUBJECT TO AUTOMATIC STAY. 

3 Section 362(b) of title 11, United States Code, is 

4 amended by inserting after paragraph (27), as amended 

5 by sections 224, 303, 311, 401, 718, and 907, the fol6 lowing: 

7 ‘‘(28) under subsection (a), of the exclusion by 

8 the Secretary of Health and Human Services of the 

9 debtor from participation in the medicare program 

10 or any other Federal health care program (as de11 fined in section 1128B(f) of the Social Security Act 

12 pursuant to title XI or XVIII of such Act).’’. 

13 TITLE XII—TECHNICAL 

14 AMENDMENTS 

15 SEC. 1201. DEFINITIONS. 

16 Section 101 of title 11, United States Code, as 

17 amended by this Act, is further amended— 

18 (1) by striking ‘‘In this title—’’ and inserting 

19 ‘‘In this title the following definitions shall apply:’’; 

20 (2) in each paragraph (other than paragraph 

21 (54A)), by inserting ‘‘The term’’ after the paragraph 

22 designation; 

23 (3) in paragraph (35)(B), by striking ‘‘para24 graphs (21B) and (33)(A)’’ and inserting ‘‘para25 graphs (23) and (35)’’; 
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1 (4) in each of paragraphs (35A), (38), and 

2 (54A), by striking ‘‘; and’’ at the end and inserting 

3 a period; 

4 (5) in paragraph (51B)— 

5 (A) by inserting ‘‘who is not a family farm6 er’’ after ‘‘debtor’’ the first place it appears; 

7 and 

8 (B) by striking ‘‘thereto having aggregate’’ 

9 and all that follows through the end of the 

10 paragraph and inserting a semicolon; 

11 (6) by striking paragraph (54) and inserting 

12 the following: 

13 ‘‘(54) The term ‘transfer’ means— 

14 ‘‘(A) the creation of a lien; 

15 ‘‘(B) the retention of title as a security in16 terest; 

17 ‘‘(C) the foreclosure of a debtor’s equity of 

18 redemption; or 

19 ‘‘(D) each mode, direct or indirect, abso20 lute or conditional, voluntary or involuntary, of 

21 disposing of or parting with— 

22 ‘‘(i) property; or 

23 ‘‘(ii) an interest in property;’’; 

24 (7) in paragraph (54A)— 
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1 (A) by striking ‘‘the term’’ and inserting 

2 ‘‘The term’’; and 

3 (B) by indenting the left margin of para4 graph (54A) 2 ems to the right; and 

5 (8) in each of paragraphs (1) through (35), in 

6 each of paragraphs (36), (37), (38A), (38B) and 

7 (39A), and in each of paragraphs (40) through (55), 

8 by striking the semicolon at the end and inserting a 

9 period. 

10 SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS. 

11 Section 104(b) of title 11, United States Code, as 

12 amended by this Act, is further amended— 

13 (1) by inserting ‘‘101(19A),’’ after ‘‘101(18),’’ 

14 each place it appears; 

15 (2) by inserting ‘‘522(f)(3) and 522(f)(4),’’ 

16 after ‘‘522(d),’’ each place it appears; 

17 (3) by inserting ‘‘541(b), 547(c)(9),’’ after 

18 ‘‘523(a)(2)(C),’’ each place it appears; 

19 (4) in paragraph (1), by striking ‘‘and 

20 1325(b)(3)’’ and inserting ‘‘1322(d), 1325(b), and 

21 1326(b)(3) of this title and section 1409(b) of title 

22 28’’; and 

23 (5) in paragraph (2), by striking ‘‘and 

24 1325(b)(3) of this title’’ and inserting ‘‘1322(d), 
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1 1325(b), and 1326(b)(3) of this title and section 

2 1409(b) of title 28’’. 

3 SEC. 1203. EXTENSION OF TIME. 

4 Section 108(c)(2) of title 11, United States Code, is 

5 amended by striking ‘‘922’’ and all that follows through 

6 ‘‘or’’, and inserting ‘‘922, 1201, or’’. 

7 SEC. 1204. TECHNICAL AMENDMENTS. 

8 Title 11, United States Code, is amended— 

9 (1) in section 109(b)(2), by striking ‘‘subsection 

10 (c) or (d) of’’; and 

11 (2) in section 552(b)(1), by striking ‘‘product’’ 

12 each place it appears and inserting ‘‘products’’. 

13 SEC. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR 

14 FRAUDULENTLY PREPARE BANKRUPTCY PE15 TITIONS. 

16 Section 110(j)(4) of title 11, United States Code, as 

17 so redesignated by section 221, is amended by striking 

18 ‘‘attorney’s’’ and inserting ‘‘attorneys’ ’’. 

19 SEC. 1206. LIMITATION ON COMPENSATION OF PROFES20 SIONAL PERSONS. 

21 Section 328(a) of title 11, United States Code, is 

22 amended by inserting ‘‘on a fixed or percentage fee basis,’’ 

23 after ‘‘hourly basis,’’. 
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1 SEC. 1207. EFFECT OF CONVERSION. 

2 Section 348(f)(2) of title 11, United States Code, is 

3 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the 

4 first place it appears. 

5 SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES. 

6 Section 503(b)(4) of title 11, United States Code, is 

7 amended by inserting ‘‘subparagraph (A), (B), (C), (D), 

8 or (E) of’’ before ‘‘paragraph (3)’’. 

9 SEC. 1209. EXCEPTIONS TO DISCHARGE. 

10 Section 523 of title 11, United States Code, as 

11 amended by sections 215 and 314, is amended— 

12 (1) by transferring paragraph (15), as added by 

13 section 304(e) of Public Law 103–394 (108 Stat. 

14 4133), so as to insert such paragraph after sub15 section (a)(14A); 

16 (2) in subsection (a)(9), by striking ‘‘motor ve17 hicle’’ and inserting ‘‘motor vehicle, vessel, or air18 craft’’; and 

19 (3) in subsection (e), by striking ‘‘a insured’’ 

20 and inserting ‘‘an insured’’. 

21 SEC. 1210. EFFECT OF DISCHARGE. 

22 Section 524(a)(3) of title 11, United States Code, is 

23 amended by striking ‘‘section 523’’ and all that follows 

24 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1), 

25 or 1328(a)(1), or that’’. 
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1 SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREAT2 MENT. 

3 Section 525(c) of title 11, United States Code, is 

4 amended— 

5 (1) in paragraph (1), by inserting ‘‘student’’ be6 fore ‘‘grant’’ the second place it appears; and 

7 (2) in paragraph (2), by striking ‘‘the program 

8 operated under part B, D, or E of’’ and inserting 

9 ‘‘any program operated under’’. 

10 SEC. 1212. PROPERTY OF THE ESTATE. 

11 Section 541(b)(4)(B)(ii) of title 11, United States 

12 Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’. 

13 SEC. 1213. PREFERENCES. 

14 (a) IN GENERAL.—Section 547 of title 11, United 

15 States Code, as amended by section 201, is amended— 

16 (1) in subsection (b), by striking ‘‘subsection 

17 (c)’’ and inserting ‘‘subsections (c) and (i)’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(i) If the trustee avoids under subsection (b) a 

20 transfer made between 90 days and 1 year before the date 

21 of the filing of the petition, by the debtor to an entity 

22 that is not an insider for the benefit of a creditor that 

23 is an insider, such transfer shall be considered to be avoid24 ed under this section only with respect to the creditor that 

25 is an insider.’’. 
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1 (b) APPLICABILITY.—The amendments made by this 

2 section shall apply to any case that is pending or com3 menced on or after the date of enactment of this Act. 

4 SEC. 1214. POSTPETITION TRANSACTIONS. 

5 Section 549(c) of title 11, United States Code, is 

6 amended— 

7 (1) by inserting ‘‘an interest in’’ after ‘‘transfer 

8 of’’ each place it appears; 

9 (2) by striking ‘‘such property’’ and inserting 

10 ‘‘such real property’’; and 

11 (3) by striking ‘‘the interest’’ and inserting 

12 ‘‘such interest’’. 

13 SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE. 

14 Section 726(b) of title 11, United States Code, is 

15 amended by striking ‘‘1009,’’. 

16 SEC. 1216. GENERAL PROVISIONS. 

17 Section 901(a) of title 11, United States Code, is 

18 amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’. 

19 SEC. 1217. ABANDONMENT OF RAILROAD LINE. 

20 Section 1170(e)(1) of title 11, United States Code, 

21 is amended by striking ‘‘section 11347’’ and inserting 

22 ‘‘section 11326(a)’’. 
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1 SEC. 1218. CONTENTS OF PLAN. 

2 Section 1172(c)(1) of title 11, United States Code, 

3 is amended by striking ‘‘section 11347’’ and inserting 

4 ‘‘section 11326(a)’’. 

5 SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS. 

6 Section 1334(d) of title 28, United States Code, is 

7 amended— 

8 (1) by striking ‘‘made under this subsection’’ 

9 and inserting ‘‘made under subsection (c)’’; and 

10 (2) by striking ‘‘This subsection’’ and inserting 

11 ‘‘Subsection (c) and this subsection’’. 

12 SEC. 1220. KNOWING DISREGARD OF BANKRUPTCY LAW OR 

13 RULE. 

14 Section 156(a) of title 18, United States Code, is 

15 amended— 

16 (1) in the first undesignated paragraph— 

17 (A) by inserting ‘‘(1) the term’’ before 

18 ‘‘ ‘bankruptcy’’; and 

19 (B) by striking the period at the end and 

20 inserting ‘‘; and’’; and 

21 (2) in the second undesignated paragraph— 

22 (A) by inserting ‘‘(2) the term’’ before 

23 ‘‘ ‘document’’; and 

24 (B) by striking ‘‘this title’’ and inserting 

25 ‘‘title 11’’. 
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1 SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE 

2 CORPORATIONS. 

3 (a) SALE OF PROPERTY OF ESTATE.—Section 363(d) 

4 of title 11, United States Code, is amended by striking 

5 ‘‘only’’ and all that follows through the end of the sub6 section and inserting ‘‘only— 

7 ‘‘(1) in accordance with applicable nonbank8 ruptcy law that governs the transfer of property by 

9 a corporation or trust that is not a moneyed, busi10 ness, or commercial corporation or trust; and 

11 ‘‘(2) to the extent not inconsistent with any re12 lief granted under subsection (c), (d), (e), or (f) of 

13 section 362.’’. 

14 (b) CONFIRMATION OF PLAN OF REORGANIZA15 TION.—Section 1129(a) of title 11, United States Code, 

16 as amended by sections 213 and 321, is amended by add17 ing at the end the following: 

18 ‘‘(16) All transfers of property of the plan shall 

19 be made in accordance with any applicable provi20 sions of nonbankruptcy law that govern the transfer 

21 of property by a corporation or trust that is not a 

22 moneyed, business, or commercial corporation or 

23 trust.’’. 

24 (c) TRANSFER OF PROPERTY.—Section 541 of title 

25 11, United States Code, as amended by section 225, is 

26 amended by adding at the end the following: 
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1 ‘‘(f) Notwithstanding any other provision of this title, 

2 property that is held by a debtor that is a corporation de3 scribed in section 501(c)(3) of the Internal Revenue Code 

4 of 1986 and exempt from tax under section 501(a) of such 

5 Code may be transferred to an entity that is not such a 

6 corporation, but only under the same conditions as would 

7 apply if the debtor had not filed a case under this title.’’. 

8 (d) APPLICABILITY.—The amendments made by this 

9 section shall apply to a case pending under title 11, United 

10 States Code, on the date of enactment of this Act, or filed 

11 under that title on or after that date of enactment, except 

12 that the court shall not confirm a plan under chapter 11 

13 of title 11, United States Code, without considering 

14 whether this section would substantially affect the rights 

15 of a party in interest who first acquired rights with respect 

16 to the debtor after the date of the filing of the petition. 

17 The parties who may appear and be heard in a proceeding 

18 under this section include the attorney general of the State 

19 in which the debtor is incorporated, was formed, or does 

20 business. 

21 (e) RULE OF CONSTRUCTION.—Nothing in this sec22 tion shall be construed to require the court in which a 

23 case under chapter 11 of title 11, United States Code, is 

24 pending to remand or refer any proceeding, issue, or con-
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1 troversy to any other court or to require the approval of 

2 any other court for the transfer of property. 

3 SEC. 1222. PROTECTION OF VALID PURCHASE MONEY SE4 CURITY INTERESTS. 

5 Section 547(c)(3)(B) of title 11, United States Code, 

6 is amended by striking ‘‘20’’ and inserting ‘‘30’’. 

7 SEC. 1223. BANKRUPTCY JUDGESHIPS. 

8 (a) SHORT TITLE.—This section may be cited as the 

9 ‘‘Bankruptcy Judgeship Act of 2005’’. 

10 (b) TEMPORARY JUDGESHIPS.— 

11 (1) APPOINTMENTS.—The following bankruptcy 

12 judges shall be appointed in the manner prescribed 

13 in section 152(a)(1) of title 28, United States Code, 

14 for the appointment of bankruptcy judges provided 

15 for in section 152(a)(2) of such title: 

16 (A) One additional bankruptcy judge for 

17 the eastern district of California. 

18 (B) Three additional bankruptcy judges for 

19 the central district of California. 

20 (C) Four additional bankruptcy judges for 

21 the district of Delaware. 

22 (D) Two additional bankruptcy judges for 

23 the southern district of Florida. 

24 (E) One additional bankruptcy judge for 

25 the southern district of Georgia. 
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1 (F) Three additional bankruptcy judges for 

2 the district of Maryland. 

3 (G) One additional bankruptcy judge for 

4 the eastern district of Michigan. 

5 (H) One additional bankruptcy judge for 

6 the southern district of Mississippi. 

7 (I) One additional bankruptcy judge for 

8 the district of New Jersey. 

9 (J) One additional bankruptcy judge for 

10 the eastern district of New York. 

11 (K) One additional bankruptcy judge for 

12 the northern district of New York. 

13 (L) One additional bankruptcy judge for 

14 the southern district of New York. 

15 (M) One additional bankruptcy judge for 

16 the eastern district of North Carolina. 

17 (N) One additional bankruptcy judge for 

18 the eastern district of Pennsylvania. 

19 (O) One additional bankruptcy judge for 

20 the middle district of Pennsylvania. 

21 (P) One additional bankruptcy judge for 

22 the district of Puerto Rico. 

23 (Q) One additional bankruptcy judge for 

24 the western district of Tennessee. 
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1 (R) One additional bankruptcy judge for 

2 the eastern district of Virginia. 

3 (S) One additional bankruptcy judge for 

4 the district of South Carolina. 

5 (T) One additional bankruptcy judge for 

6 the district of Nevada. 

7 (2) VACANCIES.— 

8 (A) DISTRICTS WITH SINGLE APPOINT9 MENTS.—Except as provided in subparagraphs 

10 (B), (C), (D), and (E), the first vacancy occur11 ring in the office of bankruptcy judge in each 

12 of the judicial districts set forth in paragraph 

13 (1)— 

14 (i) occurring 5 years or more after the 

15 appointment date of the bankruptcy judge 

16 appointed under paragraph (1) to such of17 fice; and 

18 (ii) resulting from the death, retire19 ment, resignation, or removal of a bank20 ruptcy judge; 

21 shall not be filled. 

22 (B) CENTRAL DISTRICT OF CALIFORNIA.— 

23 The 1st, 2d, and 3d vacancies in the office of 

24 bankruptcy judge in the central district of Cali25 fornia— 
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1 (i) occurring 5 years or more after the 

2 respective 1st, 2d, and 3d appointment 

3 dates of the bankruptcy judges appointed 

4 under paragraph (1)(B); and 

5 (ii) resulting from the death, retire6 ment, resignation, or removal of a bank7 ruptcy judge; 

8 shall not be filled. 

9 (C) DISTRICT OF DELAWARE.—The 1st, 

10 2d, 3d, and 4th vacancies in the office of bank11 ruptcy judge in the district of Delaware— 

12 (i) occurring 5 years or more after the 

13 respective 1st, 2d, 3d, and 4th appoint14 ment dates of the bankruptcy judges ap15 pointed under paragraph (1)(F); and 

16 (ii) resulting from the death, retire17 ment, resignation, or removal of a bank18 ruptcy judge; 

19 shall not be filled. 

20 (D) SOUTHERN DISTRICT OF FLORIDA.— 

21 The 1st and 2d vacancies in the office of bank22 ruptcy judge in the southern district of Flor23 ida— 

24 (i) occurring 5 years or more after the 

25 respective 1st and 2d appointment dates of 
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1 the bankruptcy judges appointed under 

2 paragraph (1)(D); and 

3 (ii) resulting from the death, retire4 ment, resignation, or removal of a bank5 ruptcy judge; 

6 shall not be filled. 

7 (E) DISTRICT OF MARYLAND.—The 1st, 

8 2d, and 3d vacancies in the office of bankruptcy 

9 judge in the district of Maryland— 

10 (i) occurring 5 years or more after the 

11 respective 1st, 2d, and 3d appointment 

12 dates of the bankruptcy judges appointed 

13 under paragraph (1)(F); and 

14 (ii) resulting from the death, retire15 ment, resignation, or removal of a bank16 ruptcy judge; 

17 shall not be filled. 

18 (c) EXTENSIONS.— 

19 (1) IN GENERAL.—The temporary office of 

20 bankruptcy judges authorized for the northern dis21 trict of Alabama, the district of Delaware, the dis22 trict of Puerto Rico, and the eastern district of Ten23 nessee under paragraphs (1), (3), (7), and (9) of 

24 section 3(a) of the Bankruptcy Judgeship Act of 

25 1992 (28 U.S.C. 152 note) are extended until the 
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1 first vacancy occurring in the office of a bankruptcy 

2 judge in the applicable district resulting from the 

3 death, retirement, resignation, or removal of a bank4 ruptcy judge and occurring 5 years after the date of 

5 the enactment of this Act. 

6 (2) APPLICABILITY OF OTHER PROVISIONS.— 

7 All other provisions of section 3 of the Bankruptcy 

8 Judgeship Act of 1992 (28 U.S.C. 152 note) remain 

9 applicable to the temporary office of bankruptcy 

10 judges referred to in this subsection. 

11 (d) TECHNICAL AMENDMENTS.—Section 152(a) of 

12 title 28, United States Code, is amended— 

13 (1) in paragraph (1), by striking the first sen14 tence and inserting the following: ‘‘Each bankruptcy 

15 judge to be appointed for a judicial district, as pro16 vided in paragraph (2), shall be appointed by the 

17 court of appeals of the United States for the circuit 

18 in which such district is located.’’; and 

19 (2) in paragraph (2)— 

20 (A) in the item relating to the middle dis21 trict of Georgia, by striking ‘‘2’’ and inserting 

22 ‘‘3’’; and 

23 (B) in the collective item relating to the 

24 middle and southern districts of Georgia, by 

25 striking ‘‘Middle and Southern . . . . . . 1’’. 
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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect on the date of the enactment 

3 of this Act. 

4 SEC. 1224. COMPENSATING TRUSTEES. 

5 Section 1326 of title 11, United States Code, is 

6 amended— 

7 (1) in subsection (b)— 

8 (A) in paragraph (1), by striking ‘‘and’’; 

9 (B) in paragraph (2), by striking the pe10 riod at the end and inserting ‘‘; and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(3) if a chapter 7 trustee has been allowed 

13 compensation due to the conversion or dismissal of 

14 the debtor’s prior case pursuant to section 707(b), 

15 and some portion of that compensation remains un16 paid in a case converted to this chapter or in the 

17 case dismissed under section 707(b) and refiled 

18 under this chapter, the amount of any such unpaid 

19 compensation, which shall be paid monthly— 

20 ‘‘(A) by prorating such amount over the 

21 remaining duration of the plan; and 

22 ‘‘(B) by monthly payments not to exceed 

23 the greater of— 

24 ‘‘(i) $25; or 
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1 ‘‘(ii) the amount payable to unsecured 

2 nonpriority creditors, as provided by the 

3 plan, multiplied by 5 percent, and the re4 sult divided by the number of months in 

5 the plan.’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(d) Notwithstanding any other provision of this 

8 title— 

9 ‘‘(1) compensation referred to in subsection 

10 (b)(3) is payable and may be collected by the trustee 

11 under that paragraph, even if such amount has been 

12 discharged in a prior case under this title; and 

13 ‘‘(2) such compensation is payable in a case 

14 under this chapter only to the extent permitted by 

15 subsection (b)(3).’’. 

16 SEC. 1225. AMENDMENT TO SECTION 362 OF TITLE 11, 

17 UNITED STATES CODE. 

18 Section 362(b)(18) of title 11, United States Code, 

19 is amended to read as follows: 

20 ‘‘(18) under subsection (a) of the creation or 

21 perfection of a statutory lien for an ad valorem 

22 property tax, or a special tax or special assessment 

23 on real property whether or not ad valorem, imposed 

24 by a governmental unit, if such tax or assessment 
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1 comes due after the date of the filing of the peti2 tion;’’. 

3 SEC. 1226. JUDICIAL EDUCATION. 

4 The Director of the Federal Judicial Center, in con5 sultation with the Director of the Executive Office for 

6 United States Trustees, shall develop materials and con7 duct such training as may be useful to courts in imple8 menting this Act and the amendments made by this Act, 

9 including the requirements relating to the means test 

10 under section 707(b), and reaffirmation agreements under 

11 section 524, of title 11 of the United States Code, as 

12 amended by this Act. 

13 SEC. 1227. RECLAMATION. 

14 (a) RIGHTS AND POWERS OF THE TRUSTEE.—Sec15 tion 546(c) of title 11, United States Code, is amended 

16 to read as follows: 

17 ‘‘(c)(1) Except as provided in subsection (d) of this 

18 section and in section 507(c), and subject to the prior 

19 rights of a holder of a security interest in such goods or 

20 the proceeds thereof, the rights and powers of the trustee 

21 under sections 544(a), 545, 547, and 549 are subject to 

22 the right of a seller of goods that has sold goods to the 

23 debtor, in the ordinary course of such seller’s business, 

24 to reclaim such goods if the debtor has received such goods 

25 while insolvent, within 45 days before the date of the com-
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1 mencement of a case under this title, but such seller may 

2 not reclaim such goods unless such seller demands in writ3 ing reclamation of such goods— 

4 ‘‘(A) not later than 45 days after the date of 

5 receipt of such goods by the debtor; or 

6 ‘‘(B) not later than 20 days after the date of 

7 commencement of the case, if the 45-day period ex8 pires after the commencement of the case. 

9 ‘‘(2) If a seller of goods fails to provide notice in the 

10 manner described in paragraph (1), the seller still may 

11 assert the rights contained in section 503(b)(9).’’. 

12 (b) ADMINISTRATIVE EXPENSES.—Section 503(b) of 

13 title 11, United States Code, as amended by sections 445 

14 and 1103, is amended by adding at the end the following: 

15 ‘‘(9) the value of any goods received by the 

16 debtor within 20 days before the date of commence17 ment of a case under this title in which the goods 

18 have been sold to the debtor in the ordinary course 

19 of such debtor’s business.’’. 

20 SEC. 1228. PROVIDING REQUESTED TAX DOCUMENTS TO 

21 THE COURT. 

22 (a) CHAPTER 7 CASES.—The court shall not grant 

23 a discharge in the case of an individual who is a debtor 

24 in a case under chapter 7 of title 11, United States Code, 
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1 unless requested tax documents have been provided to the 

2 court. 

3 (b) CHAPTER 11 AND CHAPTER 13 CASES.—The 

4 court shall not confirm a plan of reorganization in the case 

5 of an individual under chapter 11 or 13 of title 11, United 

6 States Code, unless requested tax documents have been 

7 filed with the court. 

8 (c) DOCUMENT RETENTION.—The court shall de9 stroy documents submitted in support of a bankruptcy 

10 claim not sooner than 3 years after the date of the conclu11 sion of a case filed by an individual under chapter 7, 11, 

12 or 13 of title 11, United States Code. In the event of a 

13 pending audit or enforcement action, the court may extend 

14 the time for destruction of such requested tax documents. 

15 SEC. 1229. ENCOURAGING CREDITWORTHINESS. 

16 (a) SENSE OF THE CONGRESS.—It is the sense of the 

17 Congress that— 

18 (1) certain lenders may sometimes offer credit 

19 to consumers indiscriminately, without taking steps 

20 to ensure that consumers are capable of repaying 

21 the resulting debt, and in a manner which may en22 courage certain consumers to accumulate additional 

23 debt; and 

24 (2) resulting consumer debt may increasingly be 

25 a major contributing factor to consumer insolvency. 
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1 (b) STUDY REQUIRED.—The Board of Governors of 

2 the Federal Reserve System (hereafter in this section re3 ferred to as the ‘‘Board’’) shall conduct a study of— 

4 (1) consumer credit industry practices of solic5 iting and extending credit— 

6 (A) indiscriminately; 

7 (B) without taking steps to ensure that 

8 consumers are capable of repaying the resulting 

9 debt; and 

10 (C) in a manner that encourages con11 sumers to accumulate additional debt; and 

12 (2) the effects of such practices on consumer 

13 debt and insolvency. 

14 (c) REPORT AND REGULATIONS.—Not later than 12 

15 months after the date of enactment of this Act, the 

16 Board— 

17 (1) shall make public a report on its findings 

18 with respect to the indiscriminate solicitation and 

19 extension of credit by the credit industry; 

20 (2) may issue regulations that would require 

21 additional disclosures to consumers; and 

22 (3) may take any other actions, consistent with 

23 its existing statutory authority, that the Board finds 

24 necessary to ensure responsible industrywide prac-
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1 tices and to prevent resulting consumer debt and in2 solvency. 

3 SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMP4 TION. 

5 Section 541(b) of title 11, United States Code, as 

6 amended by sections 225 and 323, is amended by adding 

7 after paragraph (7), as added by section 323, the fol8 lowing: 

9 ‘‘(8) subject to subchapter III of chapter 5, any 

10 interest of the debtor in property where the debtor 

11 pledged or sold tangible personal property (other 

12 than securities or written or printed evidences of in13 debtedness or title) as collateral for a loan or ad14 vance of money given by a person licensed under law 

15 to make such loans or advances, where— 

16 ‘‘(A) the tangible personal property is in 

17 the possession of the pledgee or transferee; 

18 ‘‘(B) the debtor has no obligation to repay 

19 the money, redeem the collateral, or buy back 

20 the property at a stipulated price; and 

21 ‘‘(C) neither the debtor nor the trustee 

22 have exercised any right to redeem provided 

23 under the contract or State law, in a timely 

24 manner as provided under State law and sec25 tion 108(b); or’’. 
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1 SEC. 1231. TRUSTEES. 

2 (a) SUSPENSION AND TERMINATION OF PANEL

3 TRUSTEES AND STANDING TRUSTEES.—Section 586(d) of 

4 title 28, United States Code, is amended— 

5 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(2) A trustee whose appointment under subsection 

8 (a)(1) or under subsection (b) is terminated or who ceases 

9 to be assigned to cases filed under title 11, United States 

10 Code, may obtain judicial review of the final agency deci11 sion by commencing an action in the district court of the 

12 United States for the district for which the panel to which 

13 the trustee is appointed under subsection (a)(1), or in the 

14 district court of the United States for the district in which 

15 the trustee is appointed under subsection (b) resides, after 

16 first exhausting all available administrative remedies, 

17 which if the trustee so elects, shall also include an admin18 istrative hearing on the record. Unless the trustee elects 

19 to have an administrative hearing on the record, the trust20 ee shall be deemed to have exhausted all administrative 

21 remedies for purposes of this paragraph if the agency fails 

22 to make a final agency decision within 90 days after the 

23 trustee requests administrative remedies. The Attorney 

24 General shall prescribe procedures to implement this para25 graph. The decision of the agency shall be affirmed by 

26 the district court unless it is unreasonable and without 
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1 cause based on the administrative record before the agen2 cy.’’. 

3 (b) EXPENSES OF STANDING TRUSTEES.—Section 

4 586(e) of title 28, United States Code, is amended by add5 ing at the end the following: 

6 ‘‘(3) After first exhausting all available administra7 tive remedies, an individual appointed under subsection 

8 (b) may obtain judicial review of final agency action to 

9 deny a claim of actual, necessary expenses under this sub10 section by commencing an action in the district court of 

11 the United States for the district where the individual re12 sides. The decision of the agency shall be affirmed by the 

13 district court unless it is unreasonable and without cause 

14 based upon the administrative record before the agency. 

15 ‘‘(4) The Attorney General shall prescribe procedures 

16 to implement this subsection.’’. 

17 SEC. 1232. BANKRUPTCY FORMS. 

18 Section 2075 of title 28, United States Code, is 

19 amended by adding at the end the following: 

20 ‘‘The bankruptcy rules promulgated under this sec21 tion shall prescribe a form for the statement required 

22 under section 707(b)(2)(C) of title 11 and may provide 

23 general rules on the content of such statement.’’. 
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1 SEC. 1233. DIRECT APPEALS OF BANKRUPTCY MATTERS TO 

2 COURTS OF APPEALS. 

3 (a) APPEALS.—Section 158 of title 28, United States 

4 Code, is amended— 

5 (1) in subsection (c)(1), by striking ‘‘Subject to 

6 subsection (b),’’ and inserting ‘‘Subject to sub7 sections (b) and (d)(2),’’; and 

8 (2) in subsection (d)— 

9 (A) by inserting ‘‘(1)’’ after ‘‘(d)’’; and 

10 (B) by adding at the end the following: 

11 ‘‘(2)(A) The appropriate court of appeals shall have 

12 jurisdiction of appeals described in the first sentence of 

13 subsection (a) if the bankruptcy court, the district court, 

14 or the bankruptcy appellate panel involved, acting on its 

15 own motion or on the request of a party to the judgment, 

16 order, or decree described in such first sentence, or all the 

17 appellants and appellees (if any) acting jointly, certify 

18 that— 

19 ‘‘(i) the judgment, order, or decree involves a 

20 question of law as to which there is no controlling 

21 decision of the court of appeals for the circuit or of 

22 the Supreme Court of the United States, or involves 

23 a matter of public importance; 

24 ‘‘(ii) the judgment, order, or decree involves a 

25 question of law requiring resolution of conflicting de26 cisions; or 
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1 ‘‘(iii) an immediate appeal from the judgment, 

2 order, or decree may materially advance the progress 

3 of the case or proceeding in which the appeal is 

4 taken; 

5 and if the court of appeals authorizes the direct appeal 

6 of the judgment, order, or decree. 

7 ‘‘(B) If the bankruptcy court, the district court, or 

8 the bankruptcy appellate panel— 

9 ‘‘(i) on its own motion or on the request of a 

10 party, determines that a circumstance specified in 

11 clause (i), (ii), or (iii) of subparagraph (A) exists; or 

12 ‘‘(ii) receives a request made by a majority of 

13 the appellants and a majority of appellees (if any) 

14 to make the certification described in subparagraph 

15 (A); 

16 then the bankruptcy court, the district court, or the bank17 ruptcy appellate panel shall make the certification de18 scribed in subparagraph (A). 

19 ‘‘(C) The parties may supplement the certification 

20 with a short statement of the basis for the certification. 

21 ‘‘(D) An appeal under this paragraph does not stay 

22 any proceeding of the bankruptcy court, the district court, 

23 or the bankruptcy appellate panel from which the appeal 

24 is taken, unless the respective bankruptcy court, district 

25 court, or bankruptcy appellate panel, or the court of ap-
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1 peals in which the appeal in pending, issues a stay of such 

2 proceeding pending the appeal. 

3 ‘‘(E) Any request under subparagraph (B) for certifi4 cation shall be made not later than 60 days after the entry 

5 of the judgment, order, or decree.’’. 

6 (b) PROCEDURAL RULES.— 

7 (1) TEMPORARY APPLICATION.—A provision of 

8 this subsection shall apply to appeals under section 

9 158(d)(2) of title 28, United States Code, until a 

10 rule of practice and procedure relating to such provi11 sion and such appeals is promulgated or amended 

12 under chapter 131 of such title. 

13 (2) CERTIFICATION.—A district court, a bank14 ruptcy court, or a bankruptcy appellate panel may 

15 make a certification under section 158(d)(2) of title 

16 28, United States Code, only with respect to matters 

17 pending in the respective bankruptcy court, district 

18 court, or bankruptcy appellate panel. 

19 (3) PROCEDURE.—Subject to any other provi20 sion of this subsection, an appeal authorized by the 

21 court of appeals under section 158(d)(2)(A) of title 

22 28, United States Code, shall be taken in the man23 ner prescribed in subdivisions (a)(1), (b), (c), and 

24 (d) of rule 5 of the Federal Rules of Appellate Pro-
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1 cedure. For purposes of subdivision (a)(1) of rule 

2 5— 

3 (A) a reference in such subdivision to a 

4 district court shall be deemed to include a ref5 erence to a bankruptcy court and a bankruptcy 

6 appellate panel, as appropriate; and 

7 (B) a reference in such subdivision to the 

8 parties requesting permission to appeal to be 

9 served with the petition shall be deemed to in10 clude a reference to the parties to the judg11 ment, order, or decree from which the appeal is 

12 taken. 

13 (4) FILING OF PETITION WITH ATTACHMENT.— 

14 A petition requesting permission to appeal, that is 

15 based on a certification made under subparagraph 

16 (A) or (B) of section 158(d)(2) shall— 

17 (A) be filed with the circuit clerk not later 

18 than 10 days after the certification is entered 

19 on the docket of the bankruptcy court, the dis20 trict court, or the bankruptcy appellate panel 

21 from which the appeal is taken; and 

22 (B) have attached a copy of such certifi23 cation. 
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1 (5) REFERENCES IN RULE 5.—For purposes of 

2 rule 5 of the Federal Rules of Appellate Proce3 dure— 

4 (A) a reference in such rule to a district 

5 court shall be deemed to include a reference to 

6 a bankruptcy court and to a bankruptcy appel7 late panel; and 

8 (B) a reference in such rule to a district 

9 clerk shall be deemed to include a reference to 

10 a clerk of a bankruptcy court and to a clerk of 

11 a bankruptcy appellate panel. 

12 (6) APPLICATION OF RULES.—The Federal 

13 Rules of Appellate Procedure shall apply in the 

14 courts of appeals with respect to appeals authorized 

15 under section 158(d)(2)(A), to the extent relevant 

16 and as if such appeals were taken from final judg17 ments, orders, or decrees of the district courts or 

18 bankruptcy appellate panels exercising appellate ju19 risdiction under subsection (a) or (b) of section 158 

20 of title 28, United States Code. 

21 SEC. 1234. INVOLUNTARY CASES. 

22 (a) AMENDMENTS.—Section 303 of title 11, United 

23 States Code, is amended— 

24 (1) in subsection (b)(1), by— 
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1 (A) inserting ‘‘as to liability or amount’’ 

2 after ‘‘bona fide dispute’’; and 

3 (B) striking ‘‘if such claims’’ and inserting 

4 ‘‘if such noncontingent, undisputed claims’’; 

5 and 

6 (2) in subsection (h)(1), by inserting ‘‘as to li7 ability or amount’’ before the semicolon at the end. 

8 (b) EFFECTIVE DATE; APPLICATION OF AMEND9 MENTS.—This section and the amendments made by this 

10 section shall take effect on the date of the enactment of 

11 this Act and shall apply with respect to cases commenced 

12 under title 11 of the United States Code before, on, and 

13 after such date. 

14 SEC. 1235. FEDERAL ELECTION LAW FINES AND PENALTIES 

15 AS NONDISCHARGEABLE DEBT. 

16 Section 523(a) of title 11, United States Code, as 

17 amended by section 314, is amended by inserting after 

18 paragraph (14A) the following: 

19 ‘‘(14B) incurred to pay fines or penalties im20 posed under Federal election law;’’. 
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1 TITLE XIII—CONSUMER CREDIT 

2 DISCLOSURE 

3 SEC. 1301. ENHANCED DISCLOSURES UNDER AN OPEN END 

4 CREDIT PLAN. 

5 (a) MINIMUM PAYMENT DISCLOSURES.—Section 

6 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) 

7 is amended by adding at the end the following: 

8 ‘‘(11)(A) In the case of an open end credit plan 

9 that requires a minimum monthly payment of not 

10 more than 4 percent of the balance on which finance 

11 charges are accruing, the following statement, lo12 cated on the front of the billing statement, disclosed 

13 clearly and conspicuously: ‘Minimum Payment 

14 Warning: Making only the minimum payment will 

15 increase the interest you pay and the time it takes 

16 to repay your balance. For example, making only the 

17 typical 2% minimum monthly payment on a balance 

18 of $1,000 at an interest rate of 17% would take 88 

19 months to repay the balance in full. For an estimate 

20 of the time it would take to repay your balance, 

21 making only minimum payments, call this toll-free 

22 number: llllll.’ (the blank space to be 

23 filled in by the creditor). 

24 ‘‘(B) In the case of an open end credit plan 

25 that requires a minimum monthly payment of more 
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1 than 4 percent of the balance on which finance 

2 charges are accruing, the following statement, in a 

3 prominent location on the front of the billing state4 ment, disclosed clearly and conspicuously: ‘Minimum 

5 Payment Warning: Making only the required min6 imum payment will increase the interest you pay and 

7 the time it takes to repay your balance. Making a 

8 typical 5% minimum monthly payment on a balance 

9 of $300 at an interest rate of 17% would take 24 

10 months to repay the balance in full. For an estimate 

11 of the time it would take to repay your balance, 

12 making only minimum monthly payments, call this 

13 toll-free number: llllll.’ (the blank space to 

14 be filled in by the creditor). 

15 ‘‘(C) Notwithstanding subparagraphs (A) and 

16 (B), in the case of a creditor with respect to which 

17 compliance with this title is enforced by the Federal 

18 Trade Commission, the following statement, in a 

19 prominent location on the front of the billing state20 ment, disclosed clearly and conspicuously: ‘Minimum 

21 Payment Warning: Making only the required min22 imum payment will increase the interest you pay and 

23 the time it takes to repay your balance. For exam24 ple, making only the typical 5% minimum monthly 

25 payment on a balance of $300 at an interest rate of 
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1 17% would take 24 months to repay the balance in 

2 full. For an estimate of the time it would take to 

3 repay your balance, making only minimum monthly 

4 payments, call the Federal Trade Commission at 

5 this toll-free number: llllll.’ (the blank 

6 space to be filled in by the creditor). A creditor who 

7 is subject to this subparagraph shall not be subject 

8 to subparagraph (A) or (B). 

9 ‘‘(D) Notwithstanding subparagraph (A), (B), 

10 or (C), in complying with any such subparagraph, a 

11 creditor may substitute an example based on an in12 terest rate that is greater than 17 percent. Any 

13 creditor that is subject to subparagraph (B) may 

14 elect to provide the disclosure required under sub15 paragraph (A) in lieu of the disclosure required 

16 under subparagraph (B). 

17 ‘‘(E) The Board shall, by rule, periodically re18 calculate, as necessary, the interest rate and repay19 ment period under subparagraphs (A), (B), and (C). 

20 ‘‘(F)(i) The toll-free telephone number disclosed 

21 by a creditor or the Federal Trade Commission 

22 under subparagraph (A), (B), or (G), as appro23 priate, may be a toll-free telephone number estab24 lished and maintained by the creditor or the Federal 

25 Trade Commission, as appropriate, or may be a toll- 
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1 free telephone number established and maintained 

2 by a third party for use by the creditor or multiple 

3 creditors or the Federal Trade Commission, as ap4 propriate. The toll-free telephone number may con5 nect consumers to an automated device through 

6 which consumers may obtain information described 

7 in subparagraph (A), (B), or (C), by inputting infor8 mation using a touch-tone telephone or similar de9 vice, if consumers whose telephones are not equipped 

10 to use such automated device are provided the op11 portunity to be connected to an individual from 

12 whom the information described in subparagraph 

13 (A), (B), or (C), as applicable, may be obtained. A 

14 person that receives a request for information de15 scribed in subparagraph (A), (B), or (C) from an ob16 ligor through the toll-free telephone number dis17 closed under subparagraph (A), (B), or (C), as ap18 plicable, shall disclose in response to such request 

19 only the information set forth in the table promul20 gated by the Board under subparagraph (H)(i). 

21 ‘‘(ii)(I) The Board shall establish and maintain 

22 for a period not to exceed 24 months following the 

23 effective date of the Bankruptcy Abuse Prevention 

24 and Consumer Protection Act of 2005, a toll-free 

25 telephone number, or provide a toll-free telephone 
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1 number established and maintained by a third party, 

2 for use by creditors that are depository institutions 

3 (as defined in section 3 of the Federal Deposit In4 surance Act), including a Federal credit union or 

5 State credit union (as defined in section 101 of the 

6 Federal Credit Union Act), with total assets not ex7 ceeding $250,000,000. The toll-free telephone num8 ber may connect consumers to an automated device 

9 through which consumers may obtain information 

10 described in subparagraph (A) or (B), as applicable, 

11 by inputting information using a touch-tone tele12 phone or similar device, if consumers whose tele13 phones are not equipped to use such automated de14 vice are provided the opportunity to be connected to 

15 an individual from whom the information described 

16 in subparagraph (A) or (B), as applicable, may be 

17 obtained. A person that receives a request for infor18 mation described in subparagraph (A) or (B) from 

19 an obligor through the toll-free telephone number 

20 disclosed under subparagraph (A) or (B), as applica21 ble, shall disclose in response to such request only 

22 the information set forth in the table promulgated 

23 by the Board under subparagraph (H)(i). The dollar 

24 amount contained in this subclause shall be adjusted 
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1 according to an indexing mechanism established by 

2 the Board. 

3 ‘‘(II) Not later than 6 months prior to the expi4 ration of the 24-month period referenced in sub5 clause (I), the Board shall submit to the Committee 

6 on Banking, Housing, and Urban Affairs of the Sen7 ate and the Committee on Financial Services of the 

8 House of Representatives a report on the program 

9 described in subclause (I). 

10 ‘‘(G) The Federal Trade Commission shall es11 tablish and maintain a toll-free number for the pur12 pose of providing to consumers the information re13 quired to be disclosed under subparagraph (C). 

14 ‘‘(H) The Board shall— 

15 ‘‘(i) establish a detailed table illustrating 

16 the approximate number of months that it 

17 would take to repay an outstanding balance if 

18 a consumer pays only the required minimum 

19 monthly payments and if no other advances are 

20 made, which table shall clearly present stand21 ardized information to be used to disclose the 

22 information required to be disclosed under sub23 paragraph (A), (B), or (C), as applicable; 

24 ‘‘(ii) establish the table required under 

25 clause (i) by assuming— 
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1 ‘‘(I) a significant number of different 

2 annual percentage rates; 

3 ‘‘(II) a significant number of different 

4 account balances; 

5 ‘‘(III) a significant number of dif6 ferent minimum payment amounts; and 

7 ‘‘(IV) that only minimum monthly 

8 payments are made and no additional ex9 tensions of credit are obtained; and 

10 ‘‘(iii) promulgate regulations that provide 

11 instructional guidance regarding the manner in 

12 which the information contained in the table es13 tablished under clause (i) should be used in re14 sponding to the request of an obligor for any 

15 information required to be disclosed under sub16 paragraph (A), (B), or (C). 

17 ‘‘(I) The disclosure requirements of this para18 graph do not apply to any charge card account, the 

19 primary purpose of which is to require payment of 

20 charges in full each month. 

21 ‘‘(J) A creditor that maintains a toll-free tele22 phone number for the purpose of providing cus23 tomers with the actual number of months that it will 

24 take to repay the customer’s outstanding balance is 
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1 not subject to the requirements of subparagraph (A) 

2 or (B). 

3 ‘‘(K) A creditor that maintains a toll-free tele4 phone number for the purpose of providing cus5 tomers with the actual number of months that it will 

6 take to repay an outstanding balance shall include 

7 the following statement on each billing statement: 

8 ‘Making only the minimum payment will increase 

9 the interest you pay and the time it takes to repay 

10 your balance. For more information, call this toll11 free number: llll.’ (the blank space to be filled 

12 in by the creditor).’’. 

13 (b) REGULATORY IMPLEMENTATION.— 

14 (1) IN GENERAL.—The Board of Governors of 

15 the Federal Reserve System (hereafter in this title 

16 referred to as the ‘‘Board’’) shall promulgate regula17 tions implementing the requirements of section 

18 127(b)(11) of the Truth in Lending Act, as added 

19 by subsection (a) of this section. 

20 (2) EFFECTIVE DATE.—Section 127(b)(11) of 

21 the Truth in Lending Act, as added by subsection 

22 (a) of this section, and the regulations issued under 

23 paragraph (1) of this subsection shall not take effect 

24 until the later of— 
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1 (A) 18 months after the date of enactment 

2 of this Act; or 

3 (B) 12 months after the publication of 

4 such final regulations by the Board. 

5 (c) STUDY OF FINANCIAL DISCLOSURES.— 

6 (1) IN GENERAL.—The Board may conduct a 

7 study to determine the types of information available 

8 to potential borrowers from consumer credit lending 

9 institutions regarding factors qualifying potential 

10 borrowers for credit, repayment requirements, and 

11 the consequences of default. 

12 (2) FACTORS FOR CONSIDERATION.—In con13 ducting a study under paragraph (1), the Board 

14 should, in consultation with the other Federal bank15 ing agencies (as defined in section 3 of the Federal 

16 Deposit Insurance Act), the National Credit Union 

17 Administration, and the Federal Trade Commission, 

18 consider the extent to which— 

19 (A) consumers, in establishing new credit 

20 arrangements, are aware of their existing pay21 ment obligations, the need to consider those ob22 ligations in deciding to take on new credit, and 

23 how taking on excessive credit can result in fi24 nancial difficulty; 
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1 (B) minimum periodic payment features 

2 offered in connection with open end credit plans 

3 impact consumer default rates; 

4 (C) consumers make only the required 

5 minimum payment under open end credit plans; 

6 (D) consumers are aware that making only 

7 required minimum payments will increase the 

8 cost and repayment period of an open end cred9 it obligation; and 

10 (E) the availability of low minimum pay11 ment options is a cause of consumers experi12 encing financial difficulty. 

13 (3) REPORT TO CONGRESS.—Findings of the 

14 Board in connection with any study conducted under 

15 this subsection shall be submitted to Congress. Such 

16 report shall also include recommendations for legis17 lative initiatives, if any, of the Board, based on its 

18 findings. 

19 SEC. 1302. ENHANCED DISCLOSURE FOR CREDIT EXTEN20 SIONS SECURED BY A DWELLING. 

21 (a) OPEN END CREDIT EXTENSIONS.— 

22 (1) CREDIT APPLICATIONS.—Section 

23 127A(a)(13) of the Truth in Lending Act (15 

24 U.S.C. 1637a(a)(13)) is amended— 
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1 (A) by striking ‘‘CONSULTATION OF TAX

2 ADVISER.—A statement that the’’ and inserting 

3 the following: ‘‘TAX DEDUCTIBILITY.—A state4 ment that— 

5 ‘‘(A) the’’; and 

6 (B) by striking the period at the end and 

7 inserting the following: ‘‘; and 

8 ‘‘(B) in any case in which the extension of 

9 credit exceeds the fair market value (as defined 

10 under the Internal Revenue Code of 1986) of 

11 the dwelling, the interest on the portion of the 

12 credit extension that is greater than the fair 

13 market value of the dwelling is not tax deduct14 ible for Federal income tax purposes.’’. 

15 (2) CREDIT ADVERTISEMENTS.—Section 147(b) 

16 of the Truth in Lending Act (15 U.S.C. 1665b(b)) 

17 is amended— 

18 (A) by striking ‘‘If any’’ and inserting the 

19 following: 

20 ‘‘(1) IN GENERAL.—If any’’; and 

21 (B) by adding at the end the following: 

22 ‘‘(2) CREDIT IN EXCESS OF FAIR MARKET

23 VALUE.—Each advertisement described in subsection 

24 (a) that relates to an extension of credit that may 

25 exceed the fair market value of the dwelling, and 
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1 which advertisement is disseminated in paper form 

2 to the public or through the Internet, as opposed to 

3 by radio or television, shall include a clear and con4 spicuous statement that— 

5 ‘‘(A) the interest on the portion of the 

6 credit extension that is greater than the fair 

7 market value of the dwelling is not tax deduct8 ible for Federal income tax purposes; and 

9 ‘‘(B) the consumer should consult a tax 

10 adviser for further information regarding the 

11 deductibility of interest and charges.’’. 

12 (b) NON-OPEN END CREDIT EXTENSIONS.— 

13 (1) CREDIT APPLICATIONS.—Section 128 of the 

14 Truth in Lending Act (15 U.S.C. 1638) is amend15 ed— 

16 (A) in subsection (a), by adding at the end 

17 the following: 

18 ‘‘(15) In the case of a consumer credit trans19 action that is secured by the principal dwelling of 

20 the consumer, in which the extension of credit may 

21 exceed the fair market value of the dwelling, a clear 

22 and conspicuous statement that— 

23 ‘‘(A) the interest on the portion of the 

24 credit extension that is greater than the fair 
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1 market value of the dwelling is not tax deduct2 ible for Federal income tax purposes; and 

3 ‘‘(B) the consumer should consult a tax 

4 adviser for further information regarding the 

5 deductibility of interest and charges.’’; and 

6 (B) in subsection (b), by adding at the end 

7 the following: 

8 ‘‘(3) In the case of a credit transaction described in 

9 paragraph (15) of subsection (a), disclosures required by 

10 that paragraph shall be made to the consumer at the time 

11 of application for such extension of credit.’’. 

12 (2) CREDIT ADVERTISEMENTS.—Section 144 of 

13 the Truth in Lending Act (15 U.S.C. 1664) is 

14 amended by adding at the end the following: 

15 ‘‘(e) Each advertisement to which this section applies 

16 that relates to a consumer credit transaction that is se17 cured by the principal dwelling of a consumer in which 

18 the extension of credit may exceed the fair market value 

19 of the dwelling, and which advertisement is disseminated 

20 in paper form to the public or through the Internet, as 

21 opposed to by radio or television, shall clearly and con22 spicuously state that— 

23 ‘‘(1) the interest on the portion of the credit ex24 tension that is greater than the fair market value of 
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1 the dwelling is not tax deductible for Federal income 

2 tax purposes; and 

3 ‘‘(2) the consumer should consult a tax adviser 

4 for further information regarding the deductibility of 

5 interest and charges.’’. 

6 (c) REGULATORY IMPLEMENTATION.— 

7 (1) IN GENERAL.—The Board shall promulgate 

8 regulations implementing the amendments made by 

9 this section. 

10 (2) EFFECTIVE DATE.—Regulations issued 

11 under paragraph (1) shall not take effect until the 

12 later of— 

13 (A) 12 months after the date of enactment 

14 of this Act; or 

15 (B) 12 months after the date of publica16 tion of such final regulations by the Board. 

17 SEC. 1303. DISCLOSURES RELATED TO ‘‘INTRODUCTORY 

18 RATES’’. 

19 (a) INTRODUCTORY RATE DISCLOSURES.—Section 

20 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) 

21 is amended by adding at the end the following: 

22 ‘‘(6) ADDITIONAL NOTICE CONCERNING ‘INTRO23 DUCTORY RATES’.— 

24 ‘‘(A) IN GENERAL.—Except as provided in 

25 subparagraph (B), an application or solicitation 
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1 to open a credit card account and all pro2 motional materials accompanying such applica3 tion or solicitation for which a disclosure is re4 quired under paragraph (1), and that offers a 

5 temporary annual percentage rate of interest, 

6 shall— 

7 ‘‘(i) use the term ‘introductory’ in im8 mediate proximity to each listing of the 

9 temporary annual percentage rate applica10 ble to such account, which term shall ap11 pear clearly and conspicuously; 

12 ‘‘(ii) if the annual percentage rate of 

13 interest that will apply after the end of the 

14 temporary rate period will be a fixed rate, 

15 state in a clear and conspicuous manner in 

16 a prominent location closely proximate to 

17 the first listing of the temporary annual 

18 percentage rate (other than a listing of the 

19 temporary annual percentage rate in the 

20 tabular format described in section 

21 122(c)), the time period in which the intro22 ductory period will end and the annual 

23 percentage rate that will apply after the 

24 end of the introductory period; and 
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1 ‘‘(iii) if the annual percentage rate 

2 that will apply after the end of the tem3 porary rate period will vary in accordance 

4 with an index, state in a clear and con5 spicuous manner in a prominent location 

6 closely proximate to the first listing of the 

7 temporary annual percentage rate (other 

8 than a listing in the tabular format pre9 scribed by section 122(c)), the time period 

10 in which the introductory period will end 

11 and the rate that will apply after that, 

12 based on an annual percentage rate that 

13 was in effect within 60 days before the 

14 date of mailing the application or solicita15 tion. 

16 ‘‘(B) EXCEPTION.—Clauses (ii) and (iii) of 

17 subparagraph (A) do not apply with respect to 

18 any listing of a temporary annual percentage 

19 rate on an envelope or other enclosure in which 

20 an application or solicitation to open a credit 

21 card account is mailed. 

22 ‘‘(C) CONDITIONS FOR INTRODUCTORY

23 RATES.—An application or solicitation to open 

24 a credit card account for which a disclosure is 

25 required under paragraph (1), and that offers a 
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1 temporary annual percentage rate of interest 

2 shall, if that rate of interest is revocable under 

3 any circumstance or upon any event, clearly 

4 and conspicuously disclose, in a prominent man5 ner on or with such application or solicitation— 

6 ‘‘(i) a general description of the cir7 cumstances that may result in the revoca8 tion of the temporary annual percentage 

9 rate; and 

10 ‘‘(ii) if the annual percentage rate 

11 that will apply upon the revocation of the 

12 temporary annual percentage rate— 

13 ‘‘(I) will be a fixed rate, the an14 nual percentage rate that will apply 

15 upon the revocation of the temporary 

16 annual percentage rate; or 

17 ‘‘(II) will vary in accordance with 

18 an index, the rate that will apply after 

19 the temporary rate, based on an an20 nual percentage rate that was in ef21 fect within 60 days before the date of 

22 mailing the application or solicitation. 

23 ‘‘(D) DEFINITIONS.—In this paragraph— 

24 ‘‘(i) the terms ‘temporary annual per25 centage rate of interest’ and ‘temporary 
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1 annual percentage rate’ mean any rate of 

2 interest applicable to a credit card account 

3 for an introductory period of less than 1 

4 year, if that rate is less than an annual 

5 percentage rate that was in effect within 

6 60 days before the date of mailing the ap7 plication or solicitation; and 

8 ‘‘(ii) the term ‘introductory period’ 

9 means the maximum time period for which 

10 the temporary annual percentage rate may 

11 be applicable. 

12 ‘‘(E) RELATION TO OTHER DISCLOSURE

13 REQUIREMENTS.—Nothing in this paragraph 

14 may be construed to supersede subsection (a) of 

15 section 122, or any disclosure required by para16 graph (1) or any other provision of this sub17 section.’’. 

18 (b) REGULATORY IMPLEMENTATION.— 

19 (1) IN GENERAL.—The Board shall promulgate 

20 regulations implementing the requirements of section 

21 127(c)(6) of the Truth in Lending Act, as added by 

22 this section. 

23 (2) EFFECTIVE DATE.—Section 127(c)(6) of 

24 the Truth in Lending Act, as added by this section, 
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1 and regulations issued under paragraph (1) of this 

2 subsection shall not take effect until the later of— 

3 (A) 12 months after the date of enactment 

4 of this Act; or 

5 (B) 12 months after the date of publica6 tion of such final regulations by the Board. 

7 SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS. 

8 (a) INTERNET-BASED SOLICITATIONS.—Section 

9 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) 

10 is amended by adding at the end the following: 

11 ‘‘(7) INTERNET-BASED SOLICITATIONS.— 

12 ‘‘(A) IN GENERAL.—In any solicitation to 

13 open a credit card account for any person under 

14 an open end consumer credit plan using the 

15 Internet or other interactive computer service, 

16 the person making the solicitation shall clearly 

17 and conspicuously disclose— 

18 ‘‘(i) the information described in sub19 paragraphs (A) and (B) of paragraph (1); 

20 and 

21 ‘‘(ii) the information described in 

22 paragraph (6). 

23 ‘‘(B) FORM OF DISCLOSURE.—The disclo24 sures required by subparagraph (A) shall be— 
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1 ‘‘(i) readily accessible to consumers in 

2 close proximity to the solicitation to open 

3 a credit card account; and 

4 ‘‘(ii) updated regularly to reflect the 

5 current policies, terms, and fee amounts 

6 applicable to the credit card account. 

7 ‘‘(C) DEFINITIONS.—For purposes of this 

8 paragraph— 

9 ‘‘(i) the term ‘Internet’ means the 

10 international computer network of both 

11 Federal and non-Federal interoperable 

12 packet switched data networks; and 

13 ‘‘(ii) the term ‘interactive computer 

14 service’ means any information service, 

15 system, or access software provider that 

16 provides or enables computer access by 

17 multiple users to a computer server, in18 cluding specifically a service or system that 

19 provides access to the Internet and such 

20 systems operated or services offered by li21 braries or educational institutions.’’. 

22 (b) REGULATORY IMPLEMENTATION.— 

23 (1) IN GENERAL.—The Board shall promulgate 

24 regulations implementing the requirements of section 
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1 127(c)(7) of the Truth in Lending Act, as added by 

2 this section. 

3 (2) EFFECTIVE DATE.—The amendment made 

4 by subsection (a) and the regulations issued under 

5 paragraph (1) of this subsection shall not take effect 

6 until the later of— 

7 (A) 12 months after the date of enactment 

8 of this Act; or 

9 (B) 12 months after the date of publica10 tion of such final regulations by the Board. 

11 SEC. 1305. DISCLOSURES RELATED TO LATE PAYMENT 

12 DEADLINES AND PENALTIES. 

13 (a) DISCLOSURES RELATED TO LATE PAYMENT

14 DEADLINES AND PENALTIES.—Section 127(b) of the 

15 Truth in Lending Act (15 U.S.C. 1637(b)) is amended 

16 by adding at the end the following: 

17 ‘‘(12) If a late payment fee is to be imposed 

18 due to the failure of the obligor to make payment on 

19 or before a required payment due date, the following 

20 shall be stated clearly and conspicuously on the bill21 ing statement: 

22 ‘‘(A) The date on which that payment is 

23 due or, if different, the earliest date on which 

24 a late payment fee may be charged. 
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1 ‘‘(B) The amount of the late payment fee 

2 to be imposed if payment is made after such 

3 date.’’. 

4 (b) REGULATORY IMPLEMENTATION.— 

5 (1) IN GENERAL.—The Board shall promulgate 

6 regulations implementing the requirements of section 

7 127(b)(12) of the Truth in Lending Act, as added 

8 by this section. 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by subsection (a) and regulations issued under para11 graph (1) of this subsection shall not take effect 

12 until the later of— 

13 (A) 12 months after the date of enactment 

14 of this Act; or 

15 (B) 12 months after the date of publica16 tion of such final regulations by the Board. 

17 SEC. 1306. PROHIBITION ON CERTAIN ACTIONS FOR FAIL18 URE TO INCUR FINANCE CHARGES. 

19 (a) PROHIBITION ON CERTAIN ACTIONS FOR FAIL20 URE TO INCUR FINANCE CHARGES.—Section 127 of the 

21 Truth in Lending Act (15 U.S.C. 1637) is amended by 

22 adding at the end the following: 

23 ‘‘(h) PROHIBITION ON CERTAIN ACTIONS FOR FAIL24 URE TO INCUR FINANCE CHARGES.—A creditor of an ac25 count under an open end consumer credit plan may not 
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1 terminate an account prior to its expiration date solely be2 cause the consumer has not incurred finance charges on 

3 the account. Nothing in this subsection shall prohibit a 

4 creditor from terminating an account for inactivity in 3 

5 or more consecutive months.’’. 

6 (b) REGULATORY IMPLEMENTATION.— 

7 (1) IN GENERAL.—The Board shall promulgate 

8 regulations implementing the requirements of section 

9 127(h) of the Truth in Lending Act, as added by 

10 this section. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by subsection (a) and regulations issued under para13 graph (1) of this subsection shall not take effect 

14 until the later of— 

15 (A) 12 months after the date of enactment 

16 of this Act; or 

17 (B) 12 months after the date of publica18 tion of such final regulations by the Board. 

19 SEC. 1307. DUAL USE DEBIT CARD. 

20 (a) REPORT.—The Board may conduct a study of, 

21 and present to Congress a report containing its analysis 

22 of, consumer protections under existing law to limit the 

23 liability of consumers for unauthorized use of a debit card 

24 or similar access device. Such report, if submitted, shall 
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1 include recommendations for legislative initiatives, if any, 

2 of the Board, based on its findings. 

3 (b) CONSIDERATIONS.—In preparing a report under 

4 subsection (a), the Board may include— 

5 (1) the extent to which section 909 of the Elec6 tronic Fund Transfer Act (15 U.S.C. 1693g), as in 

7 effect at the time of the report, and the imple8 menting regulations promulgated by the Board to 

9 carry out that section provide adequate unauthorized 

10 use liability protection for consumers; 

11 (2) the extent to which any voluntary industry 

12 rules have enhanced or may enhance the level of pro13 tection afforded consumers in connection with such 

14 unauthorized use liability; and 

15 (3) whether amendments to the Electronic 

16 Fund Transfer Act (15 U.S.C. 1693 et seq.), or re17 visions to regulations promulgated by the Board to 

18 carry out that Act, are necessary to further address 

19 adequate protection for consumers concerning unau20 thorized use liability. 

21 SEC. 1308. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX22 TENDED TO DEPENDENT STUDENTS. 

23 (a) STUDY.— 

24 (1) IN GENERAL.—The Board shall conduct a 

25 study regarding the impact that the extension of 
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1 credit described in paragraph (2) has on the rate of 

2 cases filed under title 11 of the United States Code. 

3 (2) EXTENSION OF CREDIT.—The extension of 

4 credit described in this paragraph is the extension of 

5 credit to individuals who are— 

6 (A) claimed as dependents for purposes of 

7 the Internal Revenue Code of 1986; and 

8 (B) enrolled within 1 year of successfully 

9 completing all required secondary education re10 quirements and on a full-time basis, in postsec11 ondary educational institutions. 

12 (b) REPORT.—Not later than 1 year after the date 

13 of enactment of this Act, the Board shall submit to the 

14 Senate and the House of Representatives a report summa15 rizing the results of the study conducted under subsection 

16 (a). 

17 SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS. 

18 (a) REGULATIONS.—Not later than 6 months after 

19 the date of enactment of this Act, the Board, in consulta20 tion with the other Federal banking agencies (as defined 

21 in section 3 of the Federal Deposit Insurance Act), the 

22 National Credit Union Administration Board, and the 

23 Federal Trade Commission, shall promulgate regulations 

24 to provide guidance regarding the meaning of the term 

25 ‘‘clear and conspicuous’’, as used in subparagraphs (A), 
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1 (B), and (C) of section 127(b)(11) and clauses (ii) and 

2 (iii) of section 127(c)(6)(A) of the Truth in Lending Act. 

3 (b) EXAMPLES.—Regulations promulgated under 

4 subsection (a) shall include examples of clear and con5 spicuous model disclosures for the purposes of disclosures 

6 required by the provisions of the Truth in Lending Act 

7 referred to in subsection (a). 

8 (c) STANDARDS.—In promulgating regulations under 

9 this section, the Board shall ensure that the clear and con10 spicuous standard required for disclosures made under the 

11 provisions of the Truth in Lending Act referred to in sub12 section (a) can be implemented in a manner which results 

13 in disclosures which are reasonably understandable and 

14 designed to call attention to the nature and significance 

15 of the information in the notice. 

16 TITLE XIV—PREVENTING COR17 PORATE BANKRUPTCY ABUSE 

18 SEC. 1401. EMPLOYEE WAGE AND BENEFIT PRIORITIES. 

19 Section 507(a) of title 11, United States Code, as 

20 amended by section 212, is amended— 

21 (1) in paragraph (4) by striking ‘‘90’’ and in22 serting ‘‘180’’, and 

23 (2) in paragraphs (4) and (5) by striking 

24 ‘‘$4,000’’ and inserting ‘‘$10,000’’. 
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1 SEC. 1402. FRAUDULENT TRANSFERS AND OBLIGATIONS. 

2 Section 548 of title 11, United States Code, is 

3 amended— 

4 (1) in subsections (a) and (b) by striking ‘‘one 

5 year’’ and inserting ‘‘2 years’’, 

6 (2) in subsection (a)— 

7 (A) by inserting ‘‘(including any transfer 

8 to or for the benefit of an insider under an em9 ployment contract)’’ after ‘‘transfer’’ the 1st 

10 place it appears, and 

11 (B) by inserting ‘‘(including any obligation 

12 to or for the benefit of an insider under an em13 ployment contract)’’ after ‘‘obligation’’ the 1st 

14 place it appears, and 

15 (3) in subsection (a)(1)(B)(ii)— 

16 (A) in subclause (II) by striking ‘‘or’’ at 

17 the end, 

18 (B) in subclause (III) by striking the pe19 riod at the end and inserting ‘‘; or’’, and 

20 (C) by adding at the end the following: 

21 ‘‘(IV) made such transfer to or for the benefit 

22 of an insider, or incurred such obligation to or for 

23 the benefit of an insider, under an employment con24 tract and not in the ordinary course of business.’’. 

25 (4) by adding at the end the following: 
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1 ‘‘(e)(1) In addition to any transfer that the trustee 

2 may otherwise avoid, the trustee may avoid any transfer 

3 of an interest of the debtor in property that was made 

4 on or within 10 years before the date of the filing of the 

5 petition, if— 

6 ‘‘(A) such transfer was made to a self-settled 

7 trust or similar device; 

8 ‘‘(B) such transfer was by the debtor; 

9 ‘‘(C) the debtor is a beneficiary of such trust or 

10 similar device; and 

11 ‘‘(D) the debtor made such transfer with actual 

12 intent to hinder, delay, or defraud any entity to 

13 which the debtor was or became, on or after the date 

14 that such transfer was made, indebted. 

15 ‘‘(2) For the purposes of this subsection, a transfer 

16 includes a transfer made in anticipation of any money 

17 judgment, settlement, civil penalty, equitable order, or 

18 criminal fine incurred by, or which the debtor believed 

19 would be incurred by— 

20 ‘‘(A) any violation of the securities laws (as de21 fined in section 3(a)(47) of the Securities Exchange 

22 Act of 1934 (15 U.S.C. 78c(a)(47))), any State se23 curities laws, or any regulation or order issued 

24 under Federal securities laws or State securities 

25 laws; or 
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1 ‘‘(B) fraud, deceit, or manipulation in a fidu2 ciary capacity or in connection with the purchase or 

3 sale of any security registered under section 12 or 

4 15(d) of the Securities Exchange Act of 1934 (15 

5 U.S.C. 78l and 78o(d)) or under section 6 of the Se6 curities Act of 1933 (15 U.S.C. 77f).’’. 

7 SEC. 1403. PAYMENT OF INSURANCE BENEFITS TO RETIRED 

8 EMPLOYEES. 

9 Section 1114 of title 11, United States Code, is 

10 amended— 

11 (1) by redesignating subsection (l) as subsection 

12 (m), and 

13 (2) by inserting after subsection (k) the fol14 lowing: 

15 ‘‘(l) If the debtor, during the 180-day period ending 

16 on the date of the filing of the petition— 

17 ‘‘(1) modified retiree benefits; and 

18 ‘‘(2) was insolvent on the date such benefits 

19 were modified; 

20 the court, on motion of a party in interest, and after notice 

21 and a hearing, shall issue an order reinstating as of the 

22 date the modification was made, such benefits as in effect 

23 immediately before such date unless the court finds that 

24 the balance of the equities clearly favors such modifica25 tion.’’. 
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1 SEC. 1404. DEBTS NONDISCHARGEABLE IF INCURRED IN 

2 VIOLATION OF SECURITIES FRAUD LAWS. 

3 (a) PREPETITION AND POSTPETITION EFFECT.— 

4 Section 523(a)(19)(B) of title 11, United States Code, is 

5 amended by inserting ‘‘, before, on, or after the date on 

6 which the petition was filed,’’ after ‘‘results’’. 

7 (b) EFFECTIVE DATE UPON ENACTMENT OF SAR8 BANES-OXLEY ACT.—The amendment made by subsection 

9 (a) is effective beginning July 30, 2002. 

10 SEC. 1405. APPOINTMENT OF TRUSTEE IN CASES OF SUS11 PECTED FRAUD. 

12 Section 1104 of title 11, United States Code, is 

13 amended by adding at the end the following: 

14 ‘‘(e) The United States trustee shall move for the ap15 pointment of a trustee under subsection (a) if there are 

16 reasonable grounds to suspect that current members of 

17 the governing body of the debtor, the debtor’s chief execu18 tive or chief financial officer, or members of the governing 

19 body who selected the debtor’s chief executive or chief fi20 nancial officer, participated in actual fraud, dishonesty, or 

21 criminal conduct in the management of the debtor or the 

22 debtor’s public financial reporting.’’. 

23 SEC. 1406. EFFECTIVE DATE; APPLICATION OF AMEND24 MENTS. 

25 (a) EFFECTIVE DATE.—Except as provided in sub26 section (b), this title and the amendments made by this 
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1 title shall take effect on the date of the enactment of this 

2 Act. 

3 (b) APPLICATION OF AMENDMENTS.— 

4 (1) IN GENERAL.—cept as provided in para5 graph (2), the amendments made by this title shall 

6 apply only with respect to cases commenced under 

7 title 11 of the United States Code on or after the 

8 date of the enactment of this Act. 

9 (2) AVOIDANCE PERIOD.—The amendment 

10 made by section 1402(1) shall apply only with re11 spect to cases commenced under title 11 of the 

12 United States Code more than 1 year after the date 

13 of the enactment of this Act. 

14 TITLE XV—GENERAL EFFECTIVE 

15 DATE; APPLICATION OF 

16 AMENDMENTS 

17 SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMEND18 MENTS. 

19 (a) EFFECTIVE DATE.—Except as otherwise provided 

20 in this Act, this Act and the amendments made by this 

21 Act shall take effect 180 days after the date of enactment 

22 of this Act. 

23 (b) APPLICATION OF AMENDMENTS.— 

24 (1) IN GENERAL.—Except as otherwise pro25 vided in this Act and paragraph (2), the amend-
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1 ments made by this Act shall not apply with respect 

2 to cases commenced under title 11, United States 

3 Code, before the effective date of this Act. 

4 (2) CERTAIN LIMITATIONS APPLICABLE TO

5 DEBTORS.—The amendments made by sections 308, 

6 322, and 330 shall apply with respect to cases com7 menced under title 11, United States Code, on or 

8 after the date of the enactment of this Act. 

9 SEC. 1502. TECHNICAL CORRECTIONS. 

10 (a) CONFORMING AMENDMENTS TO TITLE 11 OF

11 THE UNITED STATES CODE.—Title 11 of the United 

12 States Code, as amended by the preceding provisions of 

13 this Act, is amended— 

14 (1) in section 507— 

15 (A) in subsection (a)— 

16 (i) in paragraph (5)(B)(ii) by striking 

17 ‘‘paragraph (3)’’ and inserting ‘‘paragraph 

18 (4)’’; and 

19 (ii) in paragraph (8)(D) by striking 

20 ‘‘paragraph (3)’’ and inserting ‘‘paragraph 

21 (4)’’; 

22 (B) in subsection (b) by striking ‘‘sub23 section (a)(1)’’ and inserting ‘‘subsection 

24 (a)(2)’’; and 
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1 (C) in subsection (d) by striking ‘‘sub2 section (a)(3)’’ and inserting ‘‘subsection 

3 (a)(1)’’; 

4 (2) in section 523(a)(1)(A) by striking 

5 ‘‘507(a)(2)’’ and inserting ‘‘507(a)(3)’’; 

6 (3) in section 752(a) by striking ‘‘507(a)(1)’’ 

7 and inserting ‘‘507(a)(2)’’; 

8 (4) in section 766— 

9 (A) in subsection (h) by striking 

10 ‘‘507(a)(1)’’ and inserting ‘‘507(a)(2)’’; and 

11 (B) in subsection (i) by striking 

12 ‘‘507(a)(1)’’ each place it appears and inserting 

13 ‘‘507(a)(2)’’; 

14 (5) in section 901(a) by striking ‘‘507(a)(1)’’ 

15 and inserting ‘‘507(a)(2)’’; 

16 (6) in section 943(b)(5) by striking ‘‘507(a)(1)’’ 

17 and inserting ‘‘507(a)(2)’’; 

18 (7) in section 1123(a)(1) by striking 

19 ‘‘507(a)(1), 507(a)(2)’’ and inserting ‘‘507(a)(2), 

20 507(a)(3)’’; 

21 (8) in section 1129(a)(9)— 

22 (A) in subparagraph (A) by striking 

23 ‘‘507(a)(1) or 507(a)(2)’’ and inserting 

24 ‘‘507(a)(2) or 507(a)(3)’’; and 
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1 (B) in subparagraph (B) by striking 

2 ‘‘507(a)(3)’’ and inserting ‘‘507(a)(1)’’; 

3 (9) in section 1226(b)(1) by striking 

4 ‘‘507(a)(1)’’ and inserting ‘‘507(a)(2)’’; and 

5 (10) in section 1326(b)(1) by striking 

6 ‘‘507(a)(1)’’ and inserting ‘‘507(a)(2)’’. 

7 (b) RELATED CONFORMING AMENDMENT.—Section 

8 6(e) of the Securities Investor Protection Act of 1970 (15 

9 U.S.C. 78fff(e)) is amended by striking ‘‘507(a)(1)’’ and 

10 inserting ‘‘507(a)(2)’’. 

Union Calendar No. 14 

109TH CONGRESS 

1ST SESSION H. R. 256 

AN ACT 

To amend title 11 of the United States Code, and 

for other purposes. 

APRIL 8, 2005 

Committee on Financial Services discharged; committed 

the Union and ordered to be printed to the Committee of the Whole House on the State of