II

106TH CONGRESS

1ST SESSION S. 945

To amend title 11, United States Code, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 3, 1999

Mr. DURBIN (for himself, Mr. LEAHY, Mr. KENNEDY, Mr. FEINGOLD, and

Mr. SARBANES) introduced the following bill; which was read twice and

referred to the Committee on the Judiciary

A BILL

To amend title 11, 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,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Consumer Bankruptcy Reform Act of 1999’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—NEEDS-BASED BANKRUPTCY

Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.
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TITLE II—ENHANCED PROCEDURAL PROTECTIONS FOR

CONSUMERS

Sec. 201. Allowance of claims or interests.

Sec. 202. Exceptions to discharge.

Sec. 203. Effect of discharge.

Sec. 204. Automatic stay.

Sec. 205. Discharge.

Sec. 206. Discouraging predatory lending practices.

Sec. 207. Enhanced disclosure for credit extensions secured by dwelling.

Sec. 208. Dual-use debit card.

Sec. 209. Enhanced disclosures under an open end credit plan.

Sec. 210. Violations of the automatic stay.

Sec. 211. Discouraging abusive reaffirmation practices.

Sec. 212. Sense of Congress regarding the homestead exemption.

Sec. 213. Encouraging creditworthiness.

Sec. 214. Treasury Department study regarding security interests under an

open end credit plan.

TITLE III—IMPROVED PROCEDURES FOR EFFICIENT

ADMINISTRATION OF THE BANKRUPTCY SYSTEM

Sec. 301. Notice of alternatives.

Sec. 302. Fair treatment of secured creditors under chapter 13.

Sec. 303. Discouragement of bad faith repeat filings.

Sec. 304. Timely filing and confirmation of plans under chapter 13.

Sec. 305. Application of the codebtor stay only when the stay protects the debtor.

Sec. 306. Improved bankruptcy statistics.

Sec. 307. Audit procedures.

Sec. 308. Creditor representation at first meeting of creditors.

Sec. 309. Fair notice for creditors in chapter 7 and 13 cases.

Sec. 310. Stopping abusive conversions from chapter 13.

Sec. 311. Prompt relief from stay in individual cases.

Sec. 312. Dismissal for failure to timely file schedules or provide required information.

Sec. 313. Adequate time for preparation for a hearing on confirmation of the

plan.

Sec. 314. Discharge under chapter 13.

Sec. 315. Nondischargeable debts.

Sec. 316. Credit extensions on the eve of bankruptcy presumed nondischargeable.

Sec. 317. Definition of household goods and antiques.

Sec. 318. Relief from stay when the debtor does not complete intended surrender of consumer debt collateral.

Sec. 319. Adequate protection of lessors and purchase money secured creditors.

Sec. 320. Limitation.

Sec. 321. Miscellaneous improvements.

Sec. 322. Bankruptcy judgeships.

Sec. 323. Definition of domestic support obligation.

Sec. 324. Priorities for claims for domestic support obligations.

Sec. 325. Requirements to obtain confirmation and discharge in cases involving

domestic support obligations.

Sec. 326. Exceptions to automatic stay in domestic support obligation proceedings.
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Sec. 327. Nondischargeability of certain debts for alimony, maintenance, and

support.

Sec. 328. Continued liability of property.

Sec. 329. Protection of domestic support claims against preferential transfer

motions.

Sec. 330. Protection of retirement savings in bankruptcy.

Sec. 331. Additional amendments to title 11, United States Code.

Sec. 332. Debt limit increase.

Sec. 333. Elimination of requirement that family farmer and spouse receive

over 50 percent of income from farming operation in year prior

to bankruptcy.

Sec. 334. Prohibition of retroactive assessment of disposable income.

Sec. 335. Amendment to section 1325 of title 11, United States Code.

Sec. 336. Protection of savings earmarked for the postsecondary education of

children.

TITLE IV—FINANCIAL INSTRUMENTS

Sec. 401. Bankruptcy Code amendments.

Sec. 402. Damage measure.

Sec. 403. Asset-backed securitizations.

Sec. 404. Prohibition on certain actions for failure to incur finance charges.

Sec. 405. Fees arising from certain ownership interests.

Sec. 406. Bankruptcy fees.

Sec. 407. Applicability.

TITLE V—ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 501. Amendment to add chapter 6 to title 11, United States Code.

Sec. 502. Amendments to other chapters in title 11, United States Code.

TITLE VI—MISCELLANEOUS

Sec. 601. Executory contracts and unexpired leases.

Sec. 602. Expedited appeals of bankruptcy cases to courts of appeals.

Sec. 603. Creditors and equity security holders committees.

Sec. 604. Repeal of sunset provision.

Sec. 605. Cases ancillary to foreign proceedings.

Sec. 606. Limitation.

Sec. 607. Amendment to section 546 of title 11, United States Code.

Sec. 608. Amendment to section 330(a) of title 11, United States Code.

TITLE VII—TECHNICAL CORRECTIONS

Sec. 701. Adjustment of dollar amounts.

Sec. 702. Extension of time.

Sec. 703. Who may be a debtor.

Sec. 704. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions.

Sec. 705. Limitation on compensation of professional persons.

Sec. 706. Special tax provisions.

Sec. 707. Effect of conversion.

Sec. 708. Automatic stay.

Sec. 709. Allowance of administrative expenses.

Sec. 710. Priorities.

Sec. 711. Exemptions.

Sec. 712. Exceptions to discharge.
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Sec. 713. Effect of discharge.

Sec. 714. Protection against discriminatory treatment.

Sec. 715. Property of the estate.

Sec. 716. Preferences.

Sec. 717. Postpetition transactions.

Sec. 718. Technical amendment.

Sec. 719. Disposition of property of the estate.

Sec. 720. General provisions.

Sec. 721. Appointment of elected trustee.

Sec. 722. Abandonment of railroad line.

Sec. 723. Contents of plan.

Sec. 724. Discharge under chapter 12.

Sec. 725. Extensions.

Sec. 726. Bankruptcy cases and proceedings.

Sec. 727. Knowing disregard of bankruptcy law or rule.

Sec. 728. Rolling stock equipment.

Sec. 729. Curbing abusive filings.

Sec. 730. Study of operation of title 11 of the United States Code with respect

to small businesses.

Sec. 731. Transfers made by nonprofit charitable corporations.

Sec. 732. Effective date; application of amendments.

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 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 redesignated by

2 subparagraph (A) of this paragraph—

3 (i) in the first sentence—

4 (I) by striking ‘‘but not’’ and in5 serting ‘‘or’’;

6 (II) by inserting ‘‘, or, with the

7 debtor’s consent, convert such a case

8 to a case under chapter 13,’’ after

9 ‘‘consumer debts’’; and

10 (III) by striking ‘‘substantial

11 abuse’’ and inserting ‘‘abuse’’; and

12 (ii) by striking ‘‘There shall be a pre13 sumption in favor of granting the relief re14 quested by the debtor.’’; and

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

16 ‘‘(2) In considering under paragraph (1) whether the

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

18 this chapter, the court shall consider whether—

19 ‘‘(A) under section 1325(b)(1), on the basis of

20 the current income of the debtor, the debtor could

21 pay an amount greater than or equal to 30 percent

22 of unsecured claims that are not considered to be

23 priority claims (as determined under subchapter I of

24 chapter 5); or
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1 ‘‘(B) the debtor filed a petition for the relief in

2 bad faith.

3 ‘‘(3)(A) If a panel trustee appointed under section

4 586(a)(1) of title 28 brings a motion for dismissal or con5 version under this subsection and the court grants that

6 motion and finds that the action of the counsel for the

7 debtor in filing under this chapter was not substantially

8 justified, the court shall order the counsel for the debtor

9 to reimburse the trustee for all reasonable costs in pros10 ecuting the motion, including reasonable attorneys’ fees.

11 ‘‘(B) If the court finds that the attorney for the debt12 or violated Rule 9011, at a minimum, the court shall

13 order—

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

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

17 panel trustee or the United States trustee.

18 ‘‘(C) In the case of a petition referred to in subpara19 graph (B), the signature of an attorney shall constitute

20 a certificate that the attorney has—

21 ‘‘(i) performed a reasonable investigation into

22 the circumstances that gave rise to the petition; and

23 ‘‘(ii) determined that the petition—

24 ‘‘(I) is well grounded in fact; and
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1 ‘‘(II) is warranted by existing law or a

2 good faith argument for the extension, modi3 fication, or reversal of existing law and does not

4 constitute an abuse under paragraph (1).

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

6 paragraph (5), the court may award a debtor all reason7 able costs in contesting a motion brought by a party in

8 interest (other than a panel trustee or United States trust9 ee) under this subsection (including reasonable attorneys’

10 fees) if—

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

12 ‘‘(ii) the court finds that—

13 ‘‘(I) the position of the party that brought

14 the motion was not substantially justified; or

15 ‘‘(II) the party brought the motion solely

16 for the purpose of coercing a debtor into

17 waiving a right guaranteed to the debtor under

18 this title.

19 ‘‘(B) A party in interest that has a claim of an aggre20 gate amount less than $1,000 shall not be subject to sub21 paragraph (A).

22 ‘‘(5)(A) Only the judge, United States trustee, bank23 ruptcy administrator, or panel trustee may bring a motion

24 under this subsection if the debtor and the debtor’s spouse

25 combined, as of the date of the order for relief, have cur-
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1 rent monthly total income equal to or less than the na2 tional median household monthly income calculated on a

3 monthly basis for a household of equal size.

4 ‘‘(B) For purposes of subparagraph (A), for a house5 hold of more than 4 individuals, the median monthly in6 come for that household shall be—

7 ‘‘(1) the median monthly income of a household

8 of 4 individuals; plus

9 ‘‘(2) $583 for each additional member of that

10 household.’’.

11 (b) CLERICAL AMENDMENT.—The table of sections

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

13 by striking the item relating to section 707 and inserting

14 the following:

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

15 TITLE II—ENHANCED PROCE16 DURAL PROTECTIONS FOR

17 CONSUMERS

18 SEC. 201. ALLOWANCE OF CLAIMS OR INTERESTS.

19 Section 502 of title 11, United States Code, is

20 amended by adding at the end the following:

21 ‘‘(k)(1) The court may award the debtor reasonable

22 attorneys’ fees and costs if, after an objection is filed by

23 a debtor, the court—

24 ‘‘(A)(i) disallows the claim; or
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1 ‘‘(ii) reduces the claim by an amount greater

2 than 20 percent of the amount of the initial claim

3 filed by a party in interest; and

4 ‘‘(B) finds the position of the party filing the

5 claim is not substantially justified.

6 ‘‘(2) If the court finds that the position of a claimant

7 under this section is not substantially justified, the court

8 may, in addition to awarding a debtor reasonable attor9 neys’ fees and costs under paragraph (1), award such

10 damages as may be required by the equities of the case.’’.

11 SEC. 202. EXCEPTIONS TO DISCHARGE.

12 Section 523 of title 11, United States Code, is

13 amended—

14 (1) in subsection (a)(2)(A), by striking ‘‘a false

15 representation’’ and inserting ‘‘a material false rep16 resentation upon which the defrauded person justifi17 ably relied’’; and

18 (2) by striking subsection (d) and inserting the

19 following:

20 ‘‘(d)(1) Subject to paragraph (3), if a creditor re21 quests a determination of dischargeability of a consumer

22 debt under this section and that debt is discharged, the

23 court shall award the debtor reasonable attorneys’ fees

24 and costs.
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1 ‘‘(2) In addition to making an award to a debtor

2 under paragraph (1), if the court finds that the position

3 of a creditor in a proceeding covered under this section

4 is not substantially justified, the court may award reason5 able attorneys’ fees and costs under paragraph (1) and

6 such damages as may be required by the equities of the

7 case.

8 ‘‘(3)(A) A creditor may not request a determination

9 of dischargeability of a consumer debt under subsection

10 (a)(2) if—

11 ‘‘(i) before the filing of the petition, the debtor

12 made a good faith effort to negotiate a reasonable

13 alternative repayment schedule (including making an

14 offer of a reasonable alternative repayment sched15 ule); and

16 ‘‘(ii) that creditor refused to negotiate an alter17 native payment schedule, and that refusal was not

18 reasonable.

19 ‘‘(B) For purposes of this paragraph, the debtor shall

20 have the burden of proof of establishing that—

21 ‘‘(i) an offer made by that debtor under sub22 paragraph (A)(i) was reasonable; and

23 ‘‘(ii) the refusal to negotiate by the creditor in24 volved to was not reasonable.’’.
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1 SEC. 203. EFFECT OF DISCHARGE.

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

3 amended by adding at the end the following:

4 ‘‘(i) The willful failure of a creditor to credit pay5 ments received under a plan confirmed under this title (in6 cluding a plan of reorganization confirmed under chapter

7 11) in the manner required by the plan (including cred8 iting the amounts required under the plan) shall constitute

9 a violation of an injunction under subsection (a)(2).

10 ‘‘(j) An individual who is injured by the failure of

11 a creditor to comply with the requirements for a reaffirma12 tion agreement under subsections (c) and (d), or by any

13 willful violation of the injunction under subsection (a)(2),

14 shall be entitled to recover—

15 ‘‘(1) the greater of—

16 ‘‘(A)(i) the amount of actual damages;

17 multiplied by

18 ‘‘(ii) 3; or

19 ‘‘(B) $5,000; and

20 ‘‘(2) costs and attorneys’ fees.’’.

21 SEC. 204. AUTOMATIC STAY.

22 Section 362(h) of title 11, United States Code, is

23 amended to read as follows:

24 ‘‘(h)(1) An individual who is injured by any willful

25 violation of a stay provided in this section shall be entitled

26 to recover—
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1 ‘‘(A) actual damages; and

2 ‘‘(B) reasonable costs, including attorneys’ fees.

3 ‘‘(2) In addition to recovering actual damages, costs,

4 and attorneys’ fees under paragraph (1), an individual de5 scribed in paragraph (1) may recover punitive damages

6 in appropriate circumstances.’’.

7 SEC. 205. DISCHARGE.

8 Section 727 of title 11, United States Code, is

9 amended—

10 (1) in subsection (c), by adding at the end the

11 following:

12 ‘‘(3)(A) A creditor may not request a determination

13 of dischargeability of a consumer debt under subsection

14 (a) if—

15 ‘‘(i) before the filing of the petition, the debtor

16 made a good faith effort to negotiate a reasonable

17 alternative repayment schedule (including making an

18 offer of a reasonable alternative repayment sched19 ule); and

20 ‘‘(ii) that creditor refused to negotiate an alter21 native payment schedule, and that refusal was not

22 reasonable.

23 ‘‘(B) For purposes of this paragraph, the debtor shall

24 have the burden of proof of establishing that—
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1 ‘‘(i) an offer made by that debtor under sub2 paragraph (A)(i) was reasonable; and

3 ‘‘(ii) the refusal to negotiate by the creditor in4 volved to was not reasonable.’’; and

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

6 ‘‘(f)(1) The court may award the debtor reasonable

7 attorneys’ fees and costs in any case in which a creditor

8 files a motion to deny relief to a debtor under this section

9 and that motion—

10 ‘‘(A) is denied; or

11 ‘‘(B) is withdrawn after the debtor has replied.

12 ‘‘(2) If the court finds that the position of a party

13 filing a motion under this section is not substantially justi14 fied, the court may assess against the creditor such dam15 ages as may be required by the equities of the case.’’.

16 SEC. 206. DISCOURAGING PREDATORY LENDING PRAC17 TICES.

18 Section 502(b) of title 11, United States Code, is

19 amended—

20 (1) in paragraph (8), by striking ‘‘or’’ at the

21 end;

22 (2) in paragraph (9), 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 ‘‘(10) the claim is based on a secured debt if

2 the creditor has failed to comply with the require3 ments of subsection (a), (b), (c), (d), (e), (f), (g),

4 (h), or (i) of section 129 of the Truth in Lending

5 Act (15 U.S.C. 1639).’’.

6 SEC. 207. ENHANCED DISCLOSURE FOR CREDIT EXTEN7 SIONS SECURED BY DWELLING.

8 (a) OPEN-END CREDIT EXTENSIONS.—

9 (1) CREDIT APPLICATIONS.—Section

10 127A(a)(13) of the Truth in Lending Act (15

11 U.S.C. 1637a(a)(13)) is amended—

12 (A) by striking ‘‘CONSULTATION OF TAX

13 ADVISOR.—A statement that the’’ and inserting

14 the following: ‘‘TAX DEDUCTIBILITY.—A state15 ment that—

16 ‘‘(A) the’’; and

17 (B) by striking the period at the end and

18 inserting the following: ‘‘; and

19 ‘‘(B) in any case in which the extension of

20 credit exceeds the fair market value of the

21 dwelling, the interest on the portion of the cred22 it extension that is greater than the fair market

23 value of the dwelling is not tax deductible for

24 Federal income tax purposes.’’.
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1 (2) CREDIT ADVERTISEMENTS.—Section 147(b)

2 of the Truth in Lending Act (15 U.S.C. 1665b(b))

3 is amended—

4 (A) by striking ‘‘If any’’ and inserting the

5 following:

6 ‘‘(1) IN GENERAL.—If any’’; and

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

8 ‘‘(2) CREDIT IN EXCESS OF FAIR MARKET

9 VALUE.—Each advertisement described in subsection

10 (a) that relates to an extension of credit that may

11 exceed the fair market value of the dwelling shall in12 clude a clear and conspicuous statement that—

13 ‘‘(A) the interest on the portion of the

14 credit extension that is greater than the fair

15 market value of the dwelling is not tax deduct16 ible for Federal income tax purposes; and

17 ‘‘(B) the consumer may want to consult a

18 tax advisor for further information regarding

19 the deductibility of interest and charges.’’.

20 (b) NON-OPEN END CREDIT EXTENSIONS.—

21 (1) CREDIT APPLICATIONS.—Section 128 of the

22 Truth in Lending Act (15 U.S.C. 1638) is

23 amended—

24 (A) in subsection (a), by adding at the end

25 the following:
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1 ‘‘(15) In the case of a consumer credit trans2 action that is secured by the principal dwelling of

3 the consumer, in which the extension of credit may

4 exceed the fair market value of the dwelling, a clear

5 and conspicuous statement that—

6 ‘‘(A) the interest on the portion of the

7 credit extension that is greater than the fair

8 market value of the dwelling is not tax deduct9 ible for Federal income tax purposes; and

10 ‘‘(B) the consumer should consult a tax

11 advisor for further information regarding the

12 deductibility of interest and charges.’’; and

13 (B) in subsection (b), by adding at the end

14 the following:

15 ‘‘(3) In the case of a credit transaction described in

16 paragraph (15) of subsection (a), disclosures required by

17 that paragraph shall be made to the consumer at the time

18 of application for such extension of credit.’’.

19 (2) CREDIT ADVERTISEMENTS.—Section 144 of

20 the Truth in Lending Act (15 U.S.C. 1664) is

21 amended by adding at the end the following:

22 ‘‘(e) Each advertisement to which this section applies

23 that relates to a consumer credit transaction that is se24 cured by the principal dwelling of a consumer in which
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1 the extension of credit may exceed the fair market value

2 of the dwelling shall clearly and conspicuously state that—

3 ‘‘(1) the interest on the portion of the credit ex4 tension that is greater than the fair market value of

5 the dwelling is not tax deductible for Federal income

6 tax purposes; and

7 ‘‘(2) the consumer may want to consult a tax

8 advisor for further information regarding the de9 ductibility of interest and charges.’’.

10 (c) EFFECTIVE DATE.—This section and the amend11 ments made by this section shall take effect 1 year after

12 the date of enactment of this Act.

13 SEC. 208. DUAL-USE DEBIT CARD.

14 (a) CONSUMER LIABILITY.—

15 (1) IN GENERAL.—Section 909 of the Elec16 tronic Fund Transfer Act (15 U.S.C. 1693g) is

17 amended—

18 (A) by redesignating subsections (b)

19 through (e) as subsections (d) through (g), re20 spectively;

21 (B) in subsection (a)—

22 (i) by redesignating paragraphs (1)

23 and (2) as subparagraphs (A) and (B), re24 spectively, and indenting appropriately;
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1 (ii) by inserting ‘‘CARDS NECESSI2 TATING UNIQUE IDENTIFIER.—

3 ‘‘(1) IN GENERAL.—’’ after ‘‘(a)’’;

4 (iii) by striking ‘‘other means of ac5 cess can be identified as the person author6 ized to use it, such as by signature, photo7 graph,’’ and inserting ‘‘other means of ac8 cess can be identified as the person author9 ized to use it by a unique identifier, such

10 as a photograph, retina scan,’’; and

11 (iv) by striking ‘‘Notwithstanding the

12 foregoing,’’ and inserting the following:

13 ‘‘(2) NOTIFICATION.—Notwithstanding para14 graph (1),’’; and

15 (C) by inserting after subsection (a) the

16 following new subsections:

17 ‘‘(b) CARDS NOT NECESSITATING UNIQUE IDENTI18 FIER.—A consumer shall be liable for an unauthorized

19 electronic fund transfer only if—

20 ‘‘(1) the liability is not in excess of $50;

21 ‘‘(2) the unauthorized electronic fund transfer

22 is initiated by the use of a card that has been prop23 erly issued to a consumer other than the person

24 making the unauthorized transfer as a means of ac-
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1 cess to the account of that consumer for the purpose

2 of initiating an electronic fund transfer;

3 ‘‘(3) the unauthorized electronic fund transfer

4 occurs before the card issuer has been notified that

5 an unauthorized use of the card has occurred or may

6 occur as the result of loss, theft, or otherwise; and

7 ‘‘(4) such unauthorized electronic fund transfer

8 did not require the use of a code or other unique

9 identifier (other than a signature), such as a photo10 graph, fingerprint, or retina scan.

11 ‘‘(c) NOTICE OF LIABILITY AND RESPONSIBILITY TO

12 REPORT LOSS OF CARD, CODE, OR OTHER MEANS OF AC13 CESS.—No consumer shall be liable under this title for any

14 unauthorized electronic fund transfer unless the consumer

15 has received in a timely manner the notice required under

16 section 905(a)(1), and any subsequent notice required

17 under section 905(b) with regard to any change in the

18 information which is the subject of the notice required

19 under section 905(a)(1).’’.

20 (2) CONFORMING AMENDMENT.—Section

21 905(a)(1) of the Electronic Fund Transfer Act (15

22 U.S.C. 1693c(a)(1)) is amended to read as follows:

23 ‘‘(1) the liability of the consumer for any unau24 thorized electronic fund transfer and the require25 ment for promptly reporting any loss, theft, or unau-
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1 thorized use of a card, code, or other means of ac2 cess in order to limit the liability of the consumer

3 for any such unauthorized transfer;’’.

4 (b) VALIDATION REQUIREMENT FOR DUAL-USE

5 DEBIT CARDS.—

6 (1) IN GENERAL.—Section 911 of the Elec7 tronic Fund Transfer Act (15 U.S.C. 1693i) is

8 amended—

9 (A) by redesignating subsection (c) as sub10 section (d); and

11 (B) by inserting after subsection (b) the

12 following new subsection:

13 ‘‘(c) VALIDATION REQUIREMENT.—No person may

14 issue a card described in subsection (a), the use of which

15 to initiate an electronic fund transfer does not require the

16 use of a code or other unique identifier other than a signa17 ture (such as a fingerprint or retina scan), unless—

18 ‘‘(1) the requirements of paragraphs (1)

19 through (4) of subsection (b) are met; and

20 ‘‘(2) the issuer has provided to the consumer a

21 clear and conspicuous disclosure that use of the card

22 may not require the use of such code or other unique

23 identifier.’’.

24 (2) TECHNICAL AND CONFORMING AMEND25 MENT.—Section 911(d) of the Electronic Fund
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1 Transfer Act (15 U.S.C. 1993i(d)) (as redesignated

2 by subsection (a)(1) of this section) is amended by

3 striking ‘‘For the purpose of subsection (b)’’ and in4 serting ‘‘For purposes of subsections (b) and (c)’’.

5 SEC. 209. ENHANCED DISCLOSURES UNDER AN OPEN END

6 CREDIT PLAN.

7 (a) AMENDMENTS TO THE TRUTH IN LENDING

8 ACT.—

9 (1) ENHANCED DISCLOSURE OF REPAYMENT

10 TERMS.—

11 (A) IN GENERAL.—Section 127(b) of the

12 Truth in Lending Act (15 U.S.C. 1637(b)) is

13 amended by adding at the end the following:

14 ‘‘(11)(A) In a clear and conspicuous manner,

15 repayment information that would apply to the out16 standing balance of the consumer under the credit

17 plan, including—

18 ‘‘(i) the required minimum monthly pay19 ment on that balance, represented as both a

20 dollar figure and a percentage of that balance;

21 ‘‘(ii) the number of months (rounded to

22 the nearest month) that it would take to pay

23 the entire amount of that current balance if the

24 consumer pays only the required minimum
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1 monthly payments and if no further advances

2 are made;

3 ‘‘(iii) the total cost to the consumer, in4 cluding interest and principal payments, of pay5 ing that balance in full if the consumer pays

6 only the required minimum monthly payments

7 and if no further advances are made; and

8 ‘‘(iv) the following statement: ‘If your cur9 rent rate is a temporary introductory rate, your

10 total costs may be higher.’.

11 ‘‘(B) In making the disclosures under subpara12 graph (A) the creditor shall apply the annual inter13 est rate that applies to that balance with respect to

14 the current billing cycle for that consumer in effect

15 on the date on which the disclosure is made.’’.

16 (B) PUBLICATION OF MODEL FORMS.—Not

17 later than 180 days after the date of enactment

18 of this Act, the Board of Governors of the Fed19 eral Reserve System shall publish model disclo20 sure forms in accordance with section 105 of

21 the Truth in Lending Act for the purpose of

22 compliance with section 127(b)(11) of the

23 Truth in Lending Act, as added by this para24 graph.
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1 (C) CIVIL LIABILITY.—Section 130(a) of

2 the Truth in Lending Act (15 U.S.C. 1640(a))

3 is amended, in the undesignated paragraph fol4 lowing paragraph (4), by striking the second

5 sentence and inserting the following: ‘‘In con6 nection with the disclosures referred to in sub7 sections (a) and (b) of section 127, a creditor

8 shall have a liability determined under para9 graph (2) of this subsection only for failing to

10 comply with the requirements of section 125,

11 127(a), or of paragraph (4), (5), (6), (7), (8),

12 (9), (10), or (11) of section 127(b), or for fail13 ing to comply with disclosure requirements

14 under State law for any term or item that the

15 Board has determined to be substantially the

16 same in meaning under section 111(a)(2) as

17 any of the terms or items referred to in section

18 127(a), or paragraph (4), (5), (6), (7), (8), (9),

19 (10), or (11) of section 127(b).’’.

20 (2) DISCLOSURES IN CONNECTION WITH SO21 LICITATIONS.—

22 (A) IN GENERAL.—Section 127(c)(1)(B) of

23 the Truth in Lending Act (15 U.S.C.

24 1637(c)(1)(B)) is amended by adding at the

25 end the following:
24

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1 ‘‘(iv) CREDIT WORKSHEET.—An easily

2 understandable credit worksheet designed

3 to aid consumers in determining their abil4 ity to assume more debt, including consid5 eration of the personal expenses of the con6 sumer and a simple formula for the con7 sumer to determine whether the assump8 tion of additional debt is advisable.

9 ‘‘(v) BASIS OF PREAPPROVAL.—In

10 any case in which the application or solici11 tation states that the consumer has been

12 preapproved for an account under an open

13 end consumer credit plan, the following

14 statement must appear in a clear and con15 spicuous manner: ‘Your preapproval for

16 this credit card does not mean that we

17 have reviewed your individual financial cir18 cumstances. You should review your own

19 budget before accepting this offer of cred20 it.’.

21 ‘‘(vi) AVAILABILITY OF CREDIT RE22 PORT.—That the consumer is entitled to a

23 copy of his or her credit report in accord24 ance with the Fair Credit Reporting Act.’’.
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1 (B) PUBLICATION OF MODEL FORMS.—Not

2 later than 180 days after the date of enactment

3 of this Act, the Board of Governors of the Fed4 eral Reserve System shall publish model disclo5 sure forms in accordance with section 105 of

6 the Truth in Lending Act for the purpose of

7 compliance with section 127(c)(1)(B) of the

8 Truth in Lending Act, as amended by this

9 paragraph.

10 (b) EFFECTIVE DATE.—This section and the amend11 ments made by this section shall take effect on January

12 1, 2001.

13 SEC. 210. VIOLATIONS OF THE AUTOMATIC STAY.

14 Section 362(a) of title 11, United States Code, is

15 amended—

16 (1) in paragraph (7), by striking ‘‘and’’ at the

17 end;

18 (2) in paragraph (8), by striking the period and

19 inserting ‘‘; and’’;

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

21 ‘‘(9) any communication threatening a debtor,

22 at any time after the commencement and before the

23 granting of a discharge in a case under this title, of

24 an intention—
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1 ‘‘(A) to file a motion to determine the

2 dischargeability of a debt;

3 ‘‘(B) to file a motion under section 707(b)

4 to dismiss or convert the case; or

5 ‘‘(C) to repossess collateral from the debt6 or to which the stay applies.’’.

7 SEC. 211. DISCOURAGING ABUSIVE REAFFIRMATION PRAC8 TICES.

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

10 amended—

11 (1) in subsection (c)—

12 (A) in paragraph (2)—

13 (i) in subparagraph (A), by striking

14 ‘‘and’’ at the end;

15 (ii) in subparagraph (B), by adding

16 ‘‘and’’ after the semicolon; and

17 (iii) by adding at the end the fol18 lowing:

19 ‘‘(C) such agreement contains a clear and con20 spicuous statement that advises the debtor which

21 portion of the debt to be reaffirmed is attributable

22 to—

23 ‘‘(i) principal;

24 ‘‘(ii) interest;

25 ‘‘(iii) late fees;
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•S 945 IS

1 ‘‘(iv) creditor’s attorneys fees; or

2 ‘‘(v) expenses or other costs relating to the

3 collection of the debt;’’;

4 (B) in paragraph (5), by striking ‘‘and’’

5 after the semicolon;

6 (C) in paragraph (6)—

7 (i) in subparagraph (A), by striking

8 the period and inserting ‘‘ ; except that’’;

9 and

10 (ii) by striking subparagraph (B) and

11 inserting the following:

12 ‘‘(B) to the extent that the debt is a consumer

13 debt secured by real property or is a debt described

14 in paragraph (7), subparagraph (A) shall not apply;

15 and’’;

16 (E) by adding at the end the following:

17 ‘‘(7) in a case concerning an individual—

18 ‘‘(A)(i) if the consideration for such agree19 ment is based in whole or in part—

20 ‘‘(I) on an unsecured consumer debt;

21 or

22 ‘‘(II) on a debt for an item of person23 alty with a value of $250 or less at the

24 point of purchase; and
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1 ‘‘(ii) in which the creditor asserts a pur2 chase money security interest; and

3 ‘‘(B) if the court, approves such agreement

4 as—

5 ‘‘(i) in the best interest of the debtor

6 in light of the debtor’s income and ex7 penses;

8 ‘‘(ii) not imposing an undue hardship

9 on the future ability of the debtor to pay

10 for the needs of children and other depend11 ents (including court ordered support);

12 ‘‘(iii) not requiring the debtor to pay

13 the creditor’s attorney’s fees, expenses or

14 other costs relating to the collection of the

15 debt;

16 ‘‘(iv) not entered into to protect prop17 erty that is necessary for the care and

18 maintenance of children or other depend19 ents that would have nominal value on re20 possession;

21 ‘‘(v) not entered into after coercive

22 threats or actions by the creditor in the

23 creditor’s course of dealings with the debt24 or; and
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1 ‘‘(vi) not unfair because excessive in

2 amount based upon the value of the collateral.’’;

3 and

4 (2) in subsection (d)(2), by striking ‘‘require5 ments of subsection (c)(6) of this section if the con6 sideration for such agreement is based in whole or

7 in part on a consumer debt that is not secured by

8 real property of the debtor’’ and inserting ‘‘applica9 ble requirements of paragraphs (6) and (7) of sub10 section (c)’’.

11 SEC. 212. SENSE OF CONGRESS REGARDING THE HOME12 STEAD EXEMPTION.

13 (a) FINDINGS.—The Congress finds that—

14 (1) one of the most flagrant abuses of the

15 bankruptcy system involves misuse of the homestead

16 exemption under section 522 of title 11, United

17 States Code, which allows a debtor to exempt the

18 debtor’s home, up to a certain value, as established

19 by State law, from being sold off to satisfy debts;

20 (2) while the vast majority of States responsibly

21 cap the exemption at not more than $40,000, 5

22 States exempt homes regardless of their value;

23 (3) in the few States with unlimited homestead

24 exemptions, debtors can shield their assets in luxury
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1 homes, while legitimate creditors receive little or

2 nothing;

3 (4) beneficiaries of the homestead exemption in4 clude convicted insider traders and savings and loan

5 criminals, while shortchanged creditors include chil6 dren, spouses, governments, and banks; and

7 (5) the homestead exemption should be capped

8 at $100,000 to prevent such high-profile abuses.

9 (b) SENSE OF THE CONGRESS.—It is the sense of

10 the Congress that—

11 (1) meaningful bankruptcy reform cannot be

12 achieved without capping the homestead exemption;

13 and

14 (2) bankruptcy reform legislation should include

15 a cap of $100,000 on the homestead exemption

16 under title 11, United States Code.

17 SEC. 213. ENCOURAGING CREDITWORTHINESS.

18 (a) SENSE OF THE CONGRESS.—It is the sense of the

19 Congress that—

20 (1) certain lenders may sometimes offer credit

21 to consumers indiscriminately, without taking steps

22 to ensure that consumers are capable of repaying

23 the resulting debt, and in a manner which may en24 courage certain consumers to accumulate additional

25 debt; and
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1 (2) resulting consumer debt may increasingly be

2 a major contributing factor to consumer insolvency.

3 (b) STUDY REQUIRED.—The Board of Governors of

4 the Federal Reserve System (referred to in this section

5 as the ‘‘Board’’) shall conduct a study of—

6 (1) consumer credit industry practices of solic7 iting and extending credit—

8 (A) indiscriminately;

9 (B) without taking steps to ensure that

10 consumers are capable of repaying the resulting

11 debt; and

12 (C) in a manner that encourages con13 sumers to accumulate additional debt; and

14 (2) the effects of such practices on consumer

15 debt and insolvency.

16 (c) REPORT AND REGULATIONS.—Not later than 24

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

18 Board—

19 (1) shall make public a report on its findings

20 with respect to the indiscriminate solicitation and

21 extension of credit by the credit industry;

22 (2) may issue regulations that would require

23 additional disclosures to consumers in connection

24 with extensions of credit; and
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1 (3) may take any other actions, consistent with

2 its existing statutory authority, that the Board finds

3 necessary to ensure responsible industrywide prac4 tices and to prevent resulting consumer debt and in5 solvency.

6 SEC. 214. TREASURY DEPARTMENT STUDY REGARDING SE7 CURITY INTERESTS UNDER AN OPEN END

8 CREDIT PLAN.

9 (a) STUDY.—The Board of Governors of the Federal

10 Reserve System (hereafter in this section referred to as

11 the ‘‘Board’’), in consultation with the Secretary of the

12 Treasury, the general credit industry, and consumer

13 groups, shall conduct a study of the adequacy of informa14 tion received by consumers regarding the creation of secu15 rity interests under open end credit plans (as defined in

16 the Truth in Lending Act).

17 (b) FINDINGS.—The study required under subsection

18 (a) shall include the findings of the Board regarding—

19 (1) whether consumers understand at the time

20 of purchase of property under an open end credit

21 plan that such property may serve as collateral

22 under that credit plan;

23 (2) whether consumers understand at the time

24 of purchase the legal consequences of disposing of

25 property that is purchased under an open end credit
33

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1 plan and is subject to a security interest under that

2 plan; and

3 (3) whether creditors holding security interests

4 in property purchased under an open end credit plan

5 use such security interests to coerce reaffirmations

6 of existing debts under section 524 of title 11,

7 United States Code.

8 (c) CONSIDERATIONS.—In formulating the findings

9 under subsection (b), the Board shall consider, among

10 other factors the Board determines relevant, prevailing in11 dustry practices in this area.

12 (d) DISCLOSURE RECOMMENDATIONS.—The study

13 required under subsection (a) shall include the rec14 ommendations of the Board regarding the utility and prac15 ticality of additional disclosures by credit card issuers at

16 the time of purchase regarding security interests under

17 open end credit plans, including—

18 (1) disclosures of the specific property in which

19 the creditor will receive a security interest;

20 (2) disclosures of the consequences of non21 payment of the credit card balance, including how

22 the security interest may be enforced; and

23 (3) disclosures of the process by which pay24 ments made under the plan will be credited with re-
34

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1 spect to the lien created by the security contract and

2 other debts under the plan.

3 (e) SUBMISSION OF REPORT.—Not later than 180

4 days after the date of enactment of this Act, the Board

5 shall submit a report of its findings under the study re6 quired by this section to the Committee on the Judiciary

7 of the Senate, the Committee on Banking, Housing, and

8 Urban Affairs of the Senate, the Committee on the Judici9 ary of the House of Representatives, and the Committee

10 on Banking and Financial Services of the House of Rep11 resentatives.

12 TITLE III—IMPROVED PROCE13 DURES FOR EFFICIENT AD14 MINISTRATION OF THE BANK15 RUPTCY SYSTEM

16 SEC. 301. NOTICE OF ALTERNATIVES.

17 (a) IN GENERAL.—Section 342 of title 11, United

18 States Code, is amended by striking subsection (b) and

19 inserting the following:

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

21 title by an individual whose debts are primarily consumer

22 debts, that individual shall be given or obtain (as required

23 in section 521(a)(1), as part of the certification process

24 under subchapter 1 of chapter 5) a written notice pre25 scribed by the United States trustee for the district in
35

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1 which the petition is filed under section 586 of title 28.

2 The notice shall contain the following:

3 ‘‘(1) A brief description of chapters 7, 11, 12,

4 and 13 and the general purpose, benefits, and costs

5 of proceeding under each of those chapters.

6 ‘‘(2) A brief description of services that may be

7 available to that individual from a credit counseling

8 service that is approved by the United States trustee

9 or the bankruptcy administrator for that district.’’.

10 (b) DEBTOR’S DUTIES.—Section 521 of title 11,

11 United States Code, is amended—

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

13 shall—’’;

14 (2) by striking paragraph (1) and inserting the

15 following:

16 ‘‘(1) file—

17 ‘‘(A) a list of creditors; and

18 ‘‘(B) unless the court orders otherwise—

19 ‘‘(i) a schedule of assets and liabil20 ities;

21 ‘‘(ii) a schedule of current income and

22 current expenditures;

23 ‘‘(iii) a statement of the debtor’s fi24 nancial affairs and, if applicable, a

25 certificate—
36

•S 945 IS

1 ‘‘(I) of an attorney whose name

2 is on the petition as the attorney for

3 the debtor or any bankruptcy petition

4 preparer signing the petition under

5 section 110(b)(1) indicating that such

6 attorney or bankruptcy petition pre7 parer delivered to the debtor any no8 tice required by section 342(b); or

9 ‘‘(II) if no attorney for the debt10 or is indicated and no bankruptcy pe11 tition preparer signed the petition, of

12 the debtor that such notice was ob13 tained and read by the debtor;

14 ‘‘(iv) copies of any Federal tax re15 turns, including any schedules or attach16 ments, filed by the debtor for the 3-year

17 period preceding the order for relief;

18 ‘‘(v) copies of all payment advices or

19 other evidence of payment, if any, received

20 by the debtor from any employer of the

21 debtor in the period 60 days prior to the

22 filing of the petition;

23 ‘‘(vi) a statement of the amount of

24 projected monthly net income, itemized to

25 show how calculated; and
37

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1 ‘‘(vii) a statement disclosing any rea2 sonably anticipated increase in income or

3 expenditures over the 12-month period fol4 lowing the date of filing;’’; and

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

6 ‘‘(b)(1) At any time, a creditor, in the case of an indi7 vidual under chapter 7 or 13, may file with the court no8 tice that the creditor requests the petition, schedules, and

9 a statement of affairs filed by the debtor in the case and

10 the court shall make those documents available to the

11 creditor who requests those documents.

12 ‘‘(2) At any time, a creditor, in a case under chapter

13 13, may file with the court notice that the creditor re14 quests the plan filed by the debtor in the case and the

15 court shall make that plan available to the creditor who

16 requests that plan.

17 ‘‘(c) An individual debtor in a case under chapter 7

18 or 13 shall file with the court—

19 ‘‘(1) at the time filed with the taxing authority,

20 all tax returns, including any schedules or attach21 ments, with respect to the period from the com22 mencement of the case until such time as the case

23 is closed;

24 ‘‘(2) at the time filed with the taxing authority,

25 all tax returns, including any schedules or attach-
38

•S 945 IS

1 ments, that were not filed with the taxing authority

2 when the schedules under subsection (a)(1) were

3 filed with respect to the period that is 3 years before

4 the order for relief;

5 ‘‘(3) any amendments to any of the tax returns,

6 including schedules or attachments, described in

7 paragraph (1) or (2); and

8 ‘‘(4) in a case under chapter 13, a statement

9 subject to the penalties of perjury by the debtor of

10 the debtor’s income and expenditures in the pre11 ceding tax year and monthly income, that shows how

12 the amounts are calculated—

13 ‘‘(A) beginning on the date that is the

14 later of 90 days after the close of the debtor’s

15 tax year or 1 year after the order for relief, un16 less a plan has been confirmed; and

17 ‘‘(B) thereafter, on or before the date that

18 is 45 days before each anniversary of the con19 firmation of the plan until the case is closed.

20 ‘‘(d)(1) A statement referred to in subsection (c)(4)

21 shall disclose—

22 ‘‘(A) the amount and sources of income of the

23 debtor;
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•S 945 IS

1 ‘‘(B) the identity of any persons responsible

2 with the debtor for the support of any dependents of

3 the debtor; and

4 ‘‘(C) the identity of any persons who contrib5 uted, and the amount contributed, to the household

6 in which the debtor resides.

7 ‘‘(2) The tax returns, amendments, and statement of

8 income and expenditures described in paragraph (1) shall

9 be available to the United States trustee, any bankruptcy

10 administrator, any trustee, and any party in interest for

11 inspection and copying, subject to the requirements of

12 subsection (e).

13 ‘‘(e)(1) Not later than 30 days after the date of en14 actment of the Consumer Bankruptcy Reform Act of

15 1999, the Director of the Administrative Office of the

16 United States Courts shall establish procedures for safe17 guarding the confidentiality of any tax information re18 quired to be provided under this section.

19 ‘‘(2) The procedures under paragraph (1) shall in20 clude restrictions on creditor access to tax information

21 that is required to be provided under this section.

22 ‘‘(3) Not later than 1 year after the date of enact23 ment of the Consumer Bankruptcy Reform Act of 1999,

24 the Director of the Administrative Office of the United
40

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1 States Courts shall prepare, and submit to Congress a re2 port that—

3 ‘‘(A) assesses the effectiveness of the proce4 dures under paragraph (1); and

5 ‘‘(B) if appropriate, includes proposed

6 legislation—

7 ‘‘(i) to further protect the confidentiality of

8 tax information; and

9 ‘‘(ii) to provide penalties for the improper

10 use by any person of the tax information re11 quired to be provided under this section.

12 ‘‘(f) If requested by the United States trustee or a

13 trustee serving in the case, the debtor provides a document

14 that establishes the identity of the debtor, including a

15 driver’s license, passport, or other document that contains

16 a photograph of the debtor and such other personal identi17 fying information relating to the debtor that establishes

18 the identity of the debtor.’’.

19 (c) TITLE 28.—Section 586(a) of title 28, United

20 States Code, is amended—

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

22 end;

23 (2) in paragraph (6), by striking the period at

24 the end and inserting ‘‘; and’’; and

25 (3) by adding at the end the following:
41

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1 ‘‘(7) on or before January 1 of each calendar

2 year, and also not later than 30 days after any

3 change in the nonprofit debt counseling services reg4 istered with the bankruptcy court, prescribe and

5 make available on request the notice described in

6 section 342(b)(3) of title 11 for each district in7 cluded in the region.’’.

8 SEC. 302. FAIR TREATMENT OF SECURED CREDITORS

9 UNDER CHAPTER 13.

10 (a) RESTORING THE FOUNDATION FOR SECURED

11 CREDIT.—Section 1325(a) of title 11, United States Code,

12 is amended—

13 (1) in paragraph (5), by striking the matter

14 preceding subparagraph (A) and inserting the fol15 lowing:

16 ‘‘(5) with respect to an allowed claim provided

17 for by the plan that is secured under applicable non18 bankruptcy law by reason of a lien on property in

19 which the estate has an interest or is subject to a

20 setoff under section 553—’’; and

21 (2) by adding at the end of the subsection the

22 following flush sentence:

23 ‘‘For purposes of paragraph (5), section 506 shall not

24 apply to a claim described in that paragraph.’’.
42

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1 (b) PAYMENT OF HOLDERS OF CLAIMS SECURED BY

2 LIENS.—Section 1325(a)(5)(B)(i) of title 11, United

3 States Code, is amended to read as follows:

4 ‘‘(B)(i) the plan provides that the holder of

5 such claim retain the lien securing such claim

6 until the debt that is the subject of the claim

7 is fully paid for, as provided under the plan;

8 and’’.

9 (c) DETERMINATION OF SECURED STATUS.—Section

10 506 of title 11, United States Code, is amended by adding

11 at the end the following:

12 ‘‘(e) Subsection (a) shall not apply to an allowed

13 claim to the extent attributable in whole or in part to the

14 purchase price of personal property acquired by the debtor

15 during the 90-day period preceding the date of filing of

16 the petition.’’.

17 SEC. 303. DISCOURAGEMENT OF BAD FAITH REPEAT FIL18 INGS.

19 Section 362(c) of title 11, United States Code, is

20 amended—

21 (1) by inserting ‘‘(1)’’ before ‘‘Except as’’;

22 (2) by striking ‘‘(1) the stay’’ and inserting

23 ‘‘(A) the stay’’;

24 (3) by striking ‘‘(2) the stay’’ and inserting

25 ‘‘(B) the stay’’;
43

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1 (4) by striking ‘‘(A) the time’’ and inserting

2 ‘‘(i) the time’’;

3 (5) by striking ‘‘(B) the time’’ and inserting

4 ‘‘(ii) the time’’; and

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

6 ‘‘(2) Except as provided in subsections (d) through

7 (f), the stay under subsection (a) with respect to any ac8 tion taken with respect to a debt or property securing such

9 debt or with respect to any lease shall terminate with re10 spect to the debtor on the 30th day after the filing of the

11 later case if—

12 ‘‘(A) a single or joint case is filed by or against

13 an individual debtor under chapter 7, 11, or 13; and

14 ‘‘(B) a single or joint case of that debtor (other

15 than a case refiled under a chapter other than chap16 ter 7 after dismissal under section 707(b)) was

17 pending during the preceding year but was dis18 missed.

19 ‘‘(3) If a party in interest so requests, the court may

20 extend the stay in a particular case with respect to 1 or

21 more creditors (subject to such conditions or limitations

22 as the court may impose) after providing notice and a

23 hearing completed before the expiration of the 30-day pe24 riod described in paragraph (2) only if the party in inter-
44

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1 est demonstrates that the filing of the later case is in good

2 faith with respect to the creditors to be stayed.

3 ‘‘(4) A case shall be presumed to have not been filed

4 in good faith (except that such presumption may be rebut5 ted by clear and convincing evidence to the contrary)—

6 ‘‘(A) with respect to the creditors involved, if—

7 ‘‘(i) more than 1 previous case under any

8 of chapters 7, 11, or 13 in which the individual

9 was a debtor was pending during the 1-year pe10 riod described in paragraph (1);

11 ‘‘(ii) a previous case under any of chapters

12 7, 11, or 13 in which the individual was a debt13 or was dismissed within the period specified in

14 paragraph (2) after—

15 ‘‘(I) the debtor, after having received

16 from the court a request to do so, failed to

17 file or amend the petition or other docu18 ments as required by this title; or

19 ‘‘(II) the debtor, without substantial

20 excuse, failed to perform the terms of a

21 plan that was confirmed by the court; or

22 ‘‘(iii)(I) during the period commencing

23 with the dismissal of the next most previous

24 case under chapter 7, 11, or 13 there has not
45

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1 been a substantial change in the financial or

2 personal affairs of the debtor;

3 ‘‘(II) if the case is a chapter 7 case, there

4 is no other reason to conclude that the later

5 case will be concluded with a discharge; or

6 ‘‘(III) if the case is a chapter 11 or 13

7 case, there is not a confirmed plan that will be

8 fully performed; and

9 ‘‘(B) with respect to any creditor that com10 menced an action under subsection (d) in a previous

11 case in which the individual was a debtor, if, as of

12 the date of dismissal of that case, that action was

13 still pending or had been resolved by terminating,

14 conditioning, or limiting the stay with respect to ac15 tions of that creditor.

16 ‘‘(5)(A) If a request is made for relief from the stay

17 under subsection (a) with respect to real or personal prop18 erty of any kind, and the request is granted in whole or

19 in part, the court may, in addition to making any other

20 order under this subsection, order that the relief so grant21 ed shall be in rem either—

22 ‘‘(i) for a definite period of not less than 1

23 year; or

24 ‘‘(ii) indefinitely.
46

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1 ‘‘(B)(i) After an order is issued under subparagraph

2 (A), the stay under subsection (a) shall not apply to any

3 property subject to such an in rem order in any case of

4 the debtor.

5 ‘‘(ii) If an in rem order issued under subparagraph

6 (A) so provides, the stay shall, in addition to being inappli7 cable to the debtor involved, not apply with respect to an

8 entity under this title if—

9 ‘‘(I) the entity had reason to know of the order

10 at the time that the entity obtained an interest in

11 the property affected; or

12 ‘‘(II) the entity was notified of the commence13 ment of the proceeding for relief from the stay, and

14 at the time of the notification, no case in which the

15 entity was a debtor was pending.

16 ‘‘(6) For purposes of this section, a case is pending

17 during the period beginning with the issuance of the order

18 for relief and ending at such time as the case involved

19 is closed.’’.

20 SEC. 304. TIMELY FILING AND CONFIRMATION OF PLANS

21 UNDER CHAPTER 13.

22 (a) FILING OF PLAN.—Section 1321 of title 11,

23 United States Code, is amended to read as follows:
47

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1 ‘‘§ 1321. Filing of plan

2 ‘‘The debtor shall file a plan not later than 90 days

3 after the order for relief under this chapter, except that

4 the court may extend such period if the need for an exten5 sion is attributable to circumstances for which the debtor

6 should not justly be held accountable.’’.

7 (b) CONFIRMATION OF HEARING.—Section 1324 of

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

9 end the following: ‘‘That hearing shall be held not later

10 than 45 days after the filing of the plan, unless the court,

11 after providing notice and a hearing, orders otherwise.’’.

12 SEC. 305. APPLICATION OF THE CODEBTOR STAY ONLY

13 WHEN THE STAY PROTECTS THE DEBTOR.

14 Section 1301(b) of title 11, United States Code, is

15 amended—

16 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

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

18 ‘‘(2)(A) Notwithstanding subsection (c) and except as

19 provided in subparagraph (B), in any case in which the

20 debtor did not receive the consideration for the claim held

21 by a creditor, the stay provided by subsection (a) shall

22 apply to that creditor for a period not to exceed 30 days

23 beginning on the date of the order for relief, to the extent

24 the creditor proceeds against—

25 ‘‘(i) the individual that received that consider26 ation; or
48

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1 ‘‘(ii) property not in the possession of the debt2 or that secures that claim.

3 ‘‘(B) Notwithstanding subparagraph (A), the stay

4 provided by subsection (a) shall apply in any case in which

5 the debtor is primarily obligated to pay the creditor in

6 whole or in part with respect to a claim described in sub7 paragraph (A) under a legally binding separation or prop8 erty settlement agreement or divorce or dissolution decree

9 with respect to—

10 ‘‘(i) an individual described in subparagraph

11 (A)(i); or

12 ‘‘(ii) property described in subparagraph (A)(ii).

13 ‘‘(3) Notwithstanding subsection (c), the stay pro14 vided by subsection (a) shall terminate as of the date of

15 confirmation of the plan, in any case in which the plan

16 of the debtor provides that the debtor’s interest in per17 sonal property subject to a lease with respect to which the

18 debtor is the lessee will be surrendered or abandoned or

19 no payments will be made under the plan on account of

20 the debtor’s obligations under the lease.’’.

21 SEC. 306. IMPROVED BANKRUPTCY STATISTICS.

22 (a) AMENDMENT.—Chapter 6 of part I of title 28,

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

24 following:
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1 ‘‘§ 159. Bankruptcy statistics

2 ‘‘(a) The clerk of each district shall compile statistics

3 regarding individual debtors with primarily consumer

4 debts seeking relief under chapters 7, 11, and 13 of title

5 11. Those statistics shall be in a form prescribed by the

6 Director of the Administrative Office of the United States

7 Courts (referred to in this section as the ‘Office’).

8 ‘‘(b) The Director shall—

9 ‘‘(1) compile the statistics referred to in sub10 section (a);

11 ‘‘(2) make the statistics available to the public;

12 and

13 ‘‘(3) not later than October 31, 1999, and an14 nually thereafter, prepare, and submit to Congress a

15 report concerning the information collected under

16 subsection (a) that contains an analysis of the infor17 mation.

18 ‘‘(c) The compilation required under subsection (b)

19 shall—

20 ‘‘(1) be itemized, by chapter, with respect to

21 title 11;

22 ‘‘(2) be presented in the aggregate and for each

23 district; and

24 ‘‘(3) include information concerning—

25 ‘‘(A) the total assets and total liabilities of

26 the debtors described in subsection (a), and in
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1 each category of assets and liabilities, as re2 ported in the schedules prescribed under section

3 2075 of this title and filed by those debtors;

4 ‘‘(B) the current total monthly income,

5 projected monthly net income, and average in6 come and average expenses of those debtors as

7 reported on the schedules and statements that

8 each such debtor files under sections 111, 521,

9 and 1322 of title 11;

10 ‘‘(C) the aggregate amount of debt dis11 charged in the reporting period, determined as

12 the difference between the total amount of debt

13 and obligations of a debtor reported on the

14 schedules and the amount of such debt reported

15 in categories which are predominantly non16 dischargeable;

17 ‘‘(D) the average period of time between

18 the filing of the petition and the closing of the

19 case;

20 ‘‘(E) for the reporting period—

21 ‘‘(i) the number of cases in which a

22 reaffirmation was filed; and

23 ‘‘(ii)(I) the total number of reaffirma24 tions filed;
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1 ‘‘(II) of those cases in which a reaffir2 mation was filed, the number in which the

3 debtor was not represented by an attorney;

4 and

5 ‘‘(III) of those cases, the number of

6 cases in which the reaffirmation was ap7 proved by the court;

8 ‘‘(F) with respect to cases filed under

9 chapter 13 of title 11, for the reporting

10 period—

11 ‘‘(i)(I) the number of cases in which a

12 final order was entered determining the

13 value of property securing a claim in an

14 amount less than the amount of the claim;

15 and

16 ‘‘(II) the number of final orders deter17 mining the value of property securing a

18 claim issued;

19 ‘‘(ii) the number of cases dismissed

20 for failure to make payments under the

21 plan; and

22 ‘‘(iii) the number of cases in which

23 the debtor filed another case within the 6

24 years previous to the filing; and
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1 ‘‘(G) the extent of creditor misconduct and

2 any amount of punitive damages awarded by

3 the court for creditor misconduct.’’.

4 (b) CLERICAL AMENDMENT.—The table of sections

5 for chapter 6 of title 28, United States Code, is amended

6 by adding at the end the following:

‘‘159. Bankruptcy statistics.’’.

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section shall take effect 18 months after the date of

9 enactment of this Act.

10 SEC. 307. AUDIT PROCEDURES.

11 (a) AMENDMENTS.—Section 586 of title 28, United

12 States Code, is amended—

13 (1) in subsection (a), as amended by section

14 301 of this Act, by striking paragraph (6) and in15 serting the following:

16 ‘‘(6) make such reports as the Attorney General

17 directs, including the results of audits performed

18 under subsection (f); and’’; and

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

20 ‘‘(f)(1)(A) The Attorney General shall establish pro21 cedures to determine the accuracy and completeness of pe22 titions, schedules, and other information which the debtor

23 is required to provide under sections 521 and 1322 of title

24 11, and, if applicable, section 111 of title 11, in individual

25 cases filed under chapter 7 or 13 of such title.
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1 ‘‘(B) Those procedures shall—

2 ‘‘(i) establish a method of selecting appropriate

3 qualified persons to contract to perform those au4 dits;

5 ‘‘(ii) establish a method of randomly selecting

6 cases to be audited, except that not less than 1 out

7 of every 500 cases in each Federal judicial district

8 shall be selected for audit;

9 ‘‘(iii) require audits for schedules of income and

10 expenses which reflect greater than average

11 variances from the statistical norm of the district in

12 which the schedules were filed; and

13 ‘‘(iv) establish procedures for providing, not less

14 frequently than annually, public information con15 cerning the aggregate results of such audits includ16 ing the percentage of cases, by district, in which a

17 material misstatement of income or expenditures is

18 reported.

19 ‘‘(2) The United States trustee for each district is

20 authorized to contract with auditors to perform audits in

21 cases designated by the United States trustee according

22 to the procedures established under paragraph (1).

23 ‘‘(3)(A) The report of each audit conducted under

24 this subsection shall be filed with the court and trans25 mitted to the United States trustee. Each report shall
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1 clearly and conspicuously specify any material

2 misstatement of income or expenditures or of assets iden3 tified by the person performing the audit. In any case

4 where a material misstatement of income or expenditures

5 or of assets has been reported, the clerk of the bankruptcy

6 court shall give notice of the misstatement to the creditors

7 in the case.

8 ‘‘(B) If a material misstatement of income or expend9 itures or of assets is reported the United States trustee

10 shall—

11 ‘‘(i) report the material misstatement, if appro12 priate, to the United States Attorney under section

13 3057 of title 18; and

14 ‘‘(ii) if advisable, take appropriate action, in15 cluding but not limited to commencing an adversary

16 proceeding to revoke the debtor’s discharge under

17 section 727(d) of title 11.’’.

18 (b) AMENDMENTS TO SECTION 521 OF TITLE 11,

19 UNITED STATES CODE.—Section 521(a) of title 11,

20 United States Code, as amended by section 301(b) of this

21 Act, is amended in paragraphs (3) and (4) by inserting

22 ‘‘or an auditor appointed under section 586 of title 28’’

23 after ‘‘serving in the case’’ each place it appears.
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1 (c) AMENDMENTS TO SECTION 727 OF TITLE 11,

2 UNITED STATES CODE.—Section 727(d) of title 11,

3 United States Code, is amended—

4 (1) in paragraph (2), by striking ‘‘or’’ at the

5 end;

6 (2) in paragraph (3), by striking the period and

7 inserting ‘‘; or’’; and

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

9 ‘‘(4) the debtor has failed to explain

10 satisfactorily—

11 ‘‘(A) a material misstatement in an audit

12 performed under section 586(f) of title 28; or

13 ‘‘(B) a failure to make available for inspec14 tion all necessary accounts, papers, documents,

15 financial records, files and all other papers,

16 things, or property belonging to the debtor that

17 are requested for an audit conducted under sec18 tion 586(f) of title 28.’’.

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall take effect 18 months after the date of

21 enactment of this Act.

22 SEC. 308. CREDITOR REPRESENTATION AT FIRST MEETING

23 OF CREDITORS.

24 Section 341(c) of title 11, United States Code, is

25 amended—
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1 (1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and

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

3 ‘‘(2) Notwithstanding any local court rule, pro4 vision of a State constitution, any other Federal or

5 State law that is not a bankruptcy law, or other re6 quirement that representation at the meeting of

7 creditors under subsection (a) be by an attorney, a

8 creditor holding a consumer debt or any representa9 tive of the creditor (which may include an entity or

10 an employee of an entity and may be a representa11 tive for more than 1 creditor) shall be permitted to

12 appear at and participate in the meeting of creditors

13 in a case under chapter 7 or 13, either alone or in

14 conjunction with an attorney for the creditor.

15 ‘‘(3) Nothing in this subsection shall be con16 strued to require any creditor to be represented by

17 an attorney at any meeting of creditors.’’.

18 SEC. 309. FAIR NOTICE FOR CREDITORS IN CHAPTER 7 AND

19 13 CASES.

20 Section 342 of title 11, United States Code, is

21 amended—

22 (1) in subsection (c), by striking ‘‘, but the fail23 ure of such notice to contain such information shall

24 not invalidate the legal effect of such notice’’; and

25 (2) by adding at the end the following:
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1 ‘‘(d)(1) If the credit agreement between the debtor

2 and the creditor or the last communication before the fil3 ing of the petition in a voluntary case from the creditor

4 to a debtor who is an individual states an account number

5 of the debtor that is the current account number of the

6 debtor with respect to any debt held by the creditor

7 against the debtor, the debtor shall include that account

8 number in any notice to the creditor required to be given

9 under this title.

10 ‘‘(2) If the creditor has specified to the debtor, in

11 the last communication before the filing of the petition,

12 an address at which the creditor wishes to receive cor13 respondence regarding the debtor’s account, any notice to

14 the creditor required to be given by the debtor under this

15 title shall be given at such address.

16 ‘‘(3) For purposes of this section, the term ‘notice’

17 includes—

18 ‘‘(A) any correspondence from the debtor to the

19 creditor after the commencement of the case;

20 ‘‘(B) any statement of the debtor’s intention

21 under section 521(a)(2);

22 ‘‘(C) notice of the commencement of any pro23 ceeding in the case to which the creditor is a party;

24 and
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1 ‘‘(D) any notice of a hearing under section

2 1324.

3 ‘‘(e)(1) At any time, a creditor, in a case of an indi4 vidual under chapter 7 or 13, may file with the court and

5 serve on the debtor a notice of the address to be used to

6 notify the creditor in that case.

7 ‘‘(2) If the court or the debtor is required to give

8 the creditor notice, not later than 5 days after receipt of

9 the notice under paragraph (1), that notice shall be given

10 at that address.

11 ‘‘(f) An entity may file with the court a notice stating

12 its address for notice in cases under chapter 7 or 13. After

13 the date that is 30 days following the filing of that notice,

14 any notice in any case filed under chapter 7 or 13 given

15 by the court shall be to that address unless specific notice

16 is given under subsection (e) with respect to a particular

17 case.

18 ‘‘(g)(1) Notice given to a creditor other than as pro19 vided in this section shall not be effective notice until that

20 notice has been brought to the attention of the creditor.

21 ‘‘(2) If the creditor has designated a person or de22 partment to be responsible for receiving notices concerning

23 bankruptcy cases and has established reasonable proce24 dures so that bankruptcy notices received by the creditor

25 will be delivered to that department or person, notice shall
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1 not be brought to the attention of the creditor until that

2 notice is received by that person or department.’’.

3 SEC. 310. STOPPING ABUSIVE CONVERSIONS FROM CHAP4 TER 13.

5 Section 348(f)(1) of title 11, United States Code, is

6 amended—

7 (1) in subparagraph (A), by striking ‘‘and’’ at

8 the end;

9 (2) in subparagraph (B)—

10 (A) by striking ‘‘in the converted case,

11 with allowed secured claims’’ and inserting

12 ‘‘only in a case converted to chapter 11 or 12

13 but not in a case converted to chapter 7, with

14 allowed secured claims in cases under chapters

15 11 and 12’’; and

16 (B) by striking the period and inserting ‘‘;

17 and’’; and

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

19 ‘‘(C) with respect to cases converted from chap20 ter 13, the claim of any creditor holding security as

21 of the date of the petition shall continue to be se22 cured by that security unless the full amount of that

23 claim determined under applicable nonbankruptcy

24 law has been paid in full as of the date of conver25 sion, notwithstanding any valuation or determination
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1 of the amount of an allowed secured claim made for

2 the purposes of the chapter 13 proceeding.’’.

3 SEC. 311. PROMPT RELIEF FROM STAY IN INDIVIDUAL

4 CASES.

5 Section 362(e) of title 11, United States Code, is

6 amended—

7 (1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and

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

9 ‘‘(2) Notwithstanding paragraph (1), in the case of

10 an individual filing under chapter 7, 11, or 13, the stay

11 under subsection (a) shall terminate on the date that is

12 60 days after a request is made by a party in interest

13 under subsection (d), unless—

14 ‘‘(A) a final decision is rendered by the court

15 during the 60-day period beginning on the date of

16 the request; or

17 ‘‘(B) that 60-day period is extended—

18 ‘‘(i) by agreement of all parties in interest;

19 or

20 ‘‘(ii) by the court for such specific period

21 of time as the court finds is required for good

22 cause.’’.
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1 SEC. 312. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED2 ULES OR PROVIDE REQUIRED INFORMATION.

3 Section 707 of title 11, United States Code, as

4 amended by section 102 of this Act, is amended by adding

5 at the end the following:

6 ‘‘(c)(1) Notwithstanding subsection (a), and subject

7 to paragraph (2), if an individual debtor in a voluntary

8 case under chapter 7 or 13 fails to file all of the informa9 tion required under section 521(a)(1) within 45 days after

10 the filing of the petition commencing the case, the case

11 shall be automatically dismissed effective on the 46th day

12 after the filing of the petition.

13 ‘‘(2) With respect to a case described in paragraph

14 (1), any party in interest may request the court to enter

15 an order dismissing the case. The court shall, if so re16 quested, enter an order of dismissal not later than 5 days

17 after that request.

18 ‘‘(3) Upon request of the debtor made within 45 days

19 after the filing of the petition commencing a case de20 scribed in paragraph (1), the court may allow the debtor

21 an additional period of not to exceed 50 days to file the

22 information required under section 521(a)(1) if the court

23 finds justification for extending the period for the filing.’’.
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1 SEC. 313. ADEQUATE TIME FOR PREPARATION FOR A HEAR2 ING ON CONFIRMATION OF THE PLAN.

3 Section 1324 of title 11, United States Code, as

4 amended by section 304 of this Act, is 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) If not later than 5 days after receiving notice

11 of a hearing on confirmation of the plan, a creditor objects

12 to the confirmation of the plan, the hearing on confirma13 tion of the plan may be held no earlier than 20 days after

14 the first meeting of creditors under section 341(a).’’.

15 SEC. 314. DISCHARGE UNDER CHAPTER 13.

16 Section 1328(a) of title 11, United States Code, is

17 amended by striking paragraphs (1) through (3) and in18 serting the following:

19 ‘‘(1) provided for under section 1322(b)(5);

20 ‘‘(2) of the kind specified in paragraph (2), (4),

21 (5), (8), or (9) of section 523(a);

22 ‘‘(3) for restitution, or a criminal fine, included

23 in a sentence on the debtor’s conviction of a crime;

24 or

25 ‘‘(4) for restitution, or damages, awarded in a

26 civil action against the debtor as a result of willful
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1 or malicious injury by the debtor that caused per2 sonal injury to an individual or the death of an indi3 vidual.’’.

4 SEC. 315. NONDISCHARGEABLE DEBTS.

5 Section 523(a) of title 11, United States Code, is

6 amended by inserting after paragraph (14) the following:

7 ‘‘(14A) incurred to pay a debt that is non8 dischargeable by reason of section 727, 1141, 1228

9 (a) or (b), or 1328(b), or any other provision of this

10 subsection, if the debtor incurred the debt to pay

11 such a nondischargeable debt with the intent to dis12 charge in bankruptcy the newly created debt.’’.

13 SEC. 316. CREDIT EXTENSIONS ON THE EVE OF BANK14 RUPTCY PRESUMED NONDISCHARGEABLE.

15 Section 523(a)(2) of title 11, United States Code, as

16 amended by section 202 of this Act, is amended—

17 (1) in subparagraph (A), by striking the semi18 colon at the end and inserting the following: ‘‘(and,

19 for purposes of this subparagraph, consumer debts

20 owed in an aggregate amount greater than or equal

21 to $400 incurred for goods or services not reason22 ably necessary for the maintenance or support of the

23 debtor or a dependent child of the debtor to a single

24 creditor that are incurred during the 90-day period

25 preceding the date of the order for relief shall be
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1 presumed to be nondischargeable under this sub2 paragraph); or’’;

3 (2) in subparagraph (B), by striking ‘‘or’’ at

4 the end; and

5 (3) by striking subparagraph (C).

6 SEC. 317. DEFINITION OF HOUSEHOLD GOODS AND AN7 TIQUES.

8 (a) IN GENERAL.—Not later than 180 days after the

9 date of enactment of this Act, the Federal Trade Commis10 sion shall promulgate regulations defining the term

11 ‘‘household goods’’, to be applied to section 522(d)(3) of

12 title 11, United States Code, in a manner suitable and

13 appropriate for cases under that title.

14 (b) ABSENCE OF FINAL REGULATIONS.—If final reg15 ulations are not promulgated under subsection (a) and in

16 effect by the date that is 180 days after the date enact17 ment of this Act, then, for purposes of section 522(d)(3)

18 of title 11, United States Code, the term ‘‘household

19 goods’’ shall have the meaning given that term in section

20 444.1(i) of title 16, Code of Federal Regulations, except

21 that the term shall also include any tangible personal

22 property reasonably necessary for the maintenance or sup23 port of a dependent child.
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1 SEC. 318. RELIEF FROM STAY WHEN THE DEBTOR DOES

2 NOT COMPLETE INTENDED SURRENDER OF

3 CONSUMER DEBT COLLATERAL.

4 (a) AUTOMATIC STAY.—Section 362 of title 11,

5 United States Code, as amended by section 303 of this

6 Act, is amended—

7 (1) in subsection (c)(1), in the matter preceding

8 subparagraph (A), by striking ‘‘(e) and (f)’’ and in9 serting ‘‘(e), (f), and (h)’’;

10 (2) by redesignating subsection (h) as sub11 section (i); and

12 (3) by inserting after subsection (g) the fol13 lowing:

14 ‘‘(h) In an individual case under chapter 7, 11, or

15 13 the stay provided by subsection (a) is terminated with

16 respect to property of the estate securing in whole or in

17 part a claim that is in an amount greater than $3,000,

18 or subject to an unexpired lease with a remaining term

19 of at least 1 year (in any case in which the debtor owes

20 at least $3,000 for a 1-year period), if within 30 days after

21 the expiration of the applicable period under section

22 521(a)(2)—

23 ‘‘(1)(A) the debtor fails to timely file a state24 ment of intention to surrender or retain the prop25 erty; or
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1 ‘‘(B) if the debtor indicates in the filing that

2 the debtor will retain the property, the debtor fails

3 to meet an applicable requirement to—

4 ‘‘(i) either—

5 ‘‘(I) redeem the property pursuant to

6 section 722; or

7 ‘‘(II) reaffirm the debt the property

8 secures pursuant to section 524(c); or

9 ‘‘(ii) assume the unexpired lease pursuant

10 to section 365(d) if the trustee does not do so;

11 or

12 ‘‘(2) the debtor fails to timely take the action

13 specified in a statement of intention referred to in

14 paragraph (1)(A) (as amended, if that statement is

15 amended before expiration of the period for taking

16 action), unless—

17 ‘‘(A) the statement of intention specifies

18 reaffirmation; and

19 ‘‘(B) the creditor refuses to reaffirm the

20 debt on the original contract terms for the

21 debt.’’.

22 (b) DEBTOR’S DUTIES.—Section 521(a)(2) of title

23 11, United States Code, as redesignated by section 301(b)

24 of this Act, is amended—
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1 (1) in the matter preceding subparagraph (A),

2 by striking ‘‘consumer’’;

3 (2) in subparagraph (B)—

4 (A) by striking ‘‘forty-five days after the

5 filing of a notice of intent under this section’’

6 and inserting ‘‘30 days after the first meeting

7 of creditors under section 341(a)’’; and

8 (B) by striking ‘‘forty-five-day period’’ and

9 inserting ‘‘30-day period’’; and

10 (3) in subparagraph (C), by inserting ‘‘, except

11 as provided in section 362(h)’’ before the semicolon.

12 SEC. 319. ADEQUATE PROTECTION OF LESSORS AND PUR13 CHASE MONEY SECURED CREDITORS.

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

15 States Code, is amended by adding after section 1307 the

16 following:

17 ‘‘§ 1307A. Adequate protection in chapter 13 cases

18 ‘‘(a)(1)(A) On or before the date that is 30 days after

19 the filing of a case under this chapter, the debtor shall

20 make cash payments in an amount determined under

21 paragraph (2)(A), to—

22 ‘‘(i) any lessor of personal property; and

23 ‘‘(ii) any creditor holding a claim secured by

24 personal property to the extent that the claim is at-
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1 tributable to the purchase of that property by the

2 debtor.

3 ‘‘(B) The debtor or the plan shall continue making

4 the adequate protection payments until the earlier of the

5 date on which—

6 ‘‘(i) the creditor begins to receive actual pay7 ments under the plan; or

8 ‘‘(ii) the debtor relinquishes possession of the

9 property referred to in subparagraph (A) to—

10 ‘‘(I) the lessor or creditor; or

11 ‘‘(II) any third party acting under claim of

12 right, as applicable.

13 ‘‘(2) The payments referred to in paragraph (1)(A)

14 shall be determined by the court.

15 ‘‘(b)(1) Subject to the limitations under paragraph

16 (2), the court may, after notice and hearing, change the

17 amount and timing of the dates of payment of payments

18 made under subsection (a).

19 ‘‘(2)(A) The payments referred to in paragraph (1)

20 shall be payable not less frequently than monthly.

21 ‘‘(B) The amount of a payment referred to in para22 graph (1) shall not be less than the reasonable deprecia23 tion of the personal property described in subsection

24 (a)(1), determined on a month-to-month basis.
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1 ‘‘(c) Notwithstanding section 1326(b), the payments

2 referred to in subsection (a)(1)(A) shall be continued in

3 addition to plan payments under a confirmed plan until

4 actual payments to the creditor begin under that plan, if

5 the confirmed plan provides—

6 ‘‘(1) for payments to a creditor or lessor de7 scribed in subsection (a)(1); and

8 ‘‘(2) for the deferral of payments to such cred9 itor or lessor under the plan until the payment of

10 amounts described in section 1326(b).

11 ‘‘(d) Notwithstanding sections 362, 542, and 543, a

12 lessor or creditor described in subsection (a) may retain

13 possession of property described in that subsection that

14 was obtained in accordance with applicable law before the

15 date of filing of the petition until the first payment under

16 subsection (a)(1)(A) is received by the lessor or creditor.’’.

17 (b) CLERICAL AMENDMENT.—The table of sections

18 for chapter 13 of title 11, United States Code, is amended

19 by inserting after the item relating to section 1307 the

20 following:

‘‘1307A. Adequate protection in chapter 13 cases.’’.

21 SEC. 320. LIMITATION.

22 Section 522 of title 11, United States Code, is

23 amended—

24 (1) in subsection (b)(2)(A), by inserting ‘‘sub25 ject to subsection (n),’’ before ‘‘any property’’; and
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1 (2) by adding at the end the following new sub2 section:

3 ‘‘(n)(1) Except as provided in paragraph (2), as a

4 result of electing under subsection (b)(2)(A) to exempt

5 property under State or local law, a debtor may not ex6 empt any amount of interest that exceeds in the aggregate

7 $100,000 in value in—

8 ‘‘(A) real or personal property that the debtor

9 or a dependent of the debtor uses as a residence;

10 ‘‘(B) a cooperative that owns property that the

11 debtor or a dependent of the debtor uses as a resi12 dence; or

13 ‘‘(C) a burial plot for the debtor or a dependent

14 of the debtor.

15 ‘‘(2) The limitation under paragraph (1) shall not

16 apply to an exemption claimed under subsection (b)(2)(A)

17 by a family farmer for the principal residence of that

18 farmer.’’.

19 SEC. 321. MISCELLANEOUS IMPROVEMENTS.

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

21 11, United States Code, is amended by adding at the end

22 the following:

23 ‘‘(h)(1) Subject to paragraphs (2) and (3) and not24 withstanding any other provision of this section, an indi25 vidual may not be a debtor under this title unless that
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1 individual has, during the 90-day period preceding the

2 date of filing of the petition of that individual, received

3 credit counseling, including, at a minimum, participation

4 in an individual or group briefing that outlined the oppor5 tunities for available credit counseling and assisted that

6 individual in performing an initial budget analysis,

7 through a credit counseling program (offered through an

8 approved credit counseling service described in section

9 111(a)) that has been approved by—

10 ‘‘(A) the United States trustee; or

11 ‘‘(B) the bankruptcy administrator for the dis12 trict in which the petition is filed.’’.

13 ‘‘(2)(A) Paragraph (1) shall not apply with respect

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

15 States trustee or bankruptcy administrator of the bank16 ruptcy court of that district determines that the approved

17 credit counseling services for that district are not reason18 ably able to provide adequate services to the additional

19 individuals who would otherwise seek credit counseling

20 from those programs by reason of the requirements of

21 paragraph (1).

22 ‘‘(B) Each United States trustee or bankruptcy ad23 ministrator that makes a determination under subpara24 graph (A) shall review that determination not later than
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1 1 year after the date of that determination, and not less

2 frequently than annually thereafter.

3 ‘‘(3)(A) Subject to subparagraph (B), the require4 ments of paragraph (1) shall not apply with respect to

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

6 ‘‘(i) describes exigent circumstances that merit

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

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

9 counseling services from an approved credit coun10 seling service, but was unable to obtain the services

11 referred to in paragraph (1) during the 5-day period

12 beginning on the date on which the debtor made

13 that request; and

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

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

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

17 the date on which the debtor meets the requirements of

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

19 to that debtor after the date that is 30 days after the debt20 or files a petition.’’.

21 (b) CHAPTER 7 DISCHARGE.—Section 727(a) of title

22 11, United States Code, is amended—

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

24 end;
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1 (2) in paragraph (10), by striking the period

2 and inserting ‘‘; or’’; and

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

4 ‘‘(11) after the filing of the petition, the debtor

5 failed to complete an instructional course concerning

6 personal financial management described in section

7 111 that was administered or approved by—

8 ‘‘(A) the United States trustee; or

9 ‘‘(B) the bankruptcy administrator for the

10 district in which the petition is filed.’’.

11 (c) CHAPTER 13 DISCHARGE.—Section 1328 of title

12 11, United States Code, is amended by adding at the end

13 the following:

14 ‘‘(f) The court shall not grant a discharge under this

15 section to a debtor, unless after filing a petition the debtor

16 has completed an instructional course concerning personal

17 financial management described in section 111 that was

18 administered or approved by—

19 ‘‘(1) the United States trustee; or

20 ‘‘(2) the bankruptcy administrator for the dis21 trict in which the petition is filed.’’.

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

23 United States Code, as amended by section 318(b) of this

24 Act, is amended by adding at the end the following:
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1 ‘‘(e) In addition to the requirements under subsection

2 (a), an individual debtor shall file with the court—

3 ‘‘(1) a certificate from the credit counseling

4 service that provided the debtor services under sec5 tion 109(h); and

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

7 developed under section 109(h) through the credit

8 counseling service referred to in paragraph (1).’’.

9 (e) EXCEPTIONS TO DISCHARGE.—Section 523(d) of

10 title 11, United States Code, as amended by section 202

11 of this Act, is amended by striking paragraph (3)(A)(i)

12 and inserting the following:

13 ‘‘(i) within the applicable period of time pre14 scribed under section 109(h), the debtor received

15 credit counseling through a credit counseling pro16 gram in accordance with section 109(h); and’’.

17 (f) GENERAL PROVISIONS.—

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

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

20 following:

21 ‘‘§ 111. Credit counseling services; financial manage22 ment instructional courses

23 ‘‘(a) The clerk of each district shall maintain a list

24 of credit counseling services that provide one or more pro-
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1 grams described in section 109(h) and that have been ap2 proved by—

3 ‘‘(1) the United States trustee; or

4 ‘‘(2) the bankruptcy administrator for the dis5 trict.

6 ‘‘(b) The United States trustee or each bankruptcy

7 administrator referred to in subsection (a)(1) shall—

8 ‘‘(1) make available to debtors who are individ9 uals an instructional course concerning personal fi10 nancial management, under the direction of the

11 bankruptcy court; and

12 ‘‘(2) maintain a list of instructional courses

13 concerning personal financial management that are

14 operated by a private entity and that have been ap15 proved by the United States trustee or that bank16 ruptcy administrator.’’.

17 (2) CLERICAL AMENDMENT.—The table of sec18 tions for chapter 1 of title 11, United States Code,

19 is amended by adding at the end the following:

‘‘111. Credit counseling services; financial management instructional courses.’’.

20 (g) DEFINITIONS.—Section 101 of title 11, United

21 States Code, is amended—

22 (1) by inserting after paragraph (13) the fol23 lowing:

24 ‘‘(13A) ‘debtor’s principal residence’—
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1 ‘‘(A) means a residential structure, includ2 ing incidental property, without regard to

3 whether that structure is attached to real prop4 erty; and

5 ‘‘(B) includes an individual condominium

6 or co-operative unit;’’; and

7 (2) by inserting after paragraph (27), the fol8 lowing:

9 ‘‘(27A) ‘incidental property’ means, with re10 spect to a debtor’s principal residence—

11 ‘‘(A) property commonly conveyed with a

12 principal residence in the area where the real

13 estate is located;

14 ‘‘(B) all easements, rights, appurtenances,

15 fixtures, rents, royalties, mineral rights, oil or

16 gas rights or profits, water rights, escrow

17 funds, or insurance proceeds; and

18 ‘‘(C) all replacements or additions;’’.

19 SEC. 322. BANKRUPTCY JUDGESHIPS.

20 (a) SHORT TITLE.—This section may be cited as the

21 ‘‘Bankruptcy Judgeship Act of 1999’’.

22 (b) TEMPORARY JUDGESHIPS.—

23 (1) APPOINTMENTS.—The following judgeship

24 positions shall be filled in the manner prescribed in

25 section 152(a)(1) of title 28, United States Code, for
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1 the appointment of bankruptcy judges provided for

2 in section 152(a)(2) of such title:

3 (A) One additional bankruptcy judgeship

4 for the eastern district of California.

5 (B) Four additional bankruptcy judgeships

6 for the central district of California.

7 (C) One additional bankruptcy judgeship

8 for the southern district of Florida.

9 (D) Two additional bankruptcy judgeships

10 for the district of Maryland.

11 (E) One additional bankruptcy judgeship

12 for the eastern district of Michigan.

13 (F) One additional bankruptcy judgeship

14 for the southern district of Mississippi.

15 (G) One additional bankruptcy judgeship

16 for the district of New Jersey.

17 (H) One additional bankruptcy judgeship

18 for the eastern district of New York.

19 (I) One additional bankruptcy judgeship

20 for the northern district of New York.

21 (J) One additional bankruptcy judgeship

22 for the southern district of New York.

23 (K) One additional bankruptcy judgeship

24 for the eastern district of Pennsylvania.
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1 (L) One additional bankruptcy judgeship

2 for the middle district of Pennsylvania.

3 (M) One additional bankruptcy judgeship

4 for the western district of Tennessee.

5 (N) One additional bankruptcy judgeship

6 for the eastern district of Virginia.

7 (2) VACANCIES.—The first vacancy occurring in

8 the office of a bankruptcy judge in each of the judi9 cial districts set forth in paragraph (1) that—

10 (A) results from the death, retirement, res11 ignation, or removal of a bankruptcy judge; and

12 (B) occurs 5 years or more after the ap13 pointment date of a bankruptcy judge ap14 pointed under paragraph (1);

15 shall not be filled.

16 (c) EXTENSIONS.—

17 (1) IN GENERAL.—The temporary bankruptcy

18 judgeship positions authorized for the northern dis19 trict of Alabama, the district of Delaware, the dis20 trict of Puerto Rico, the district of South Carolina,

21 and the eastern district of Tennessee under section

22 3(a) (1), (3), (7), (8), and (9) of the Bankruptcy

23 Judgeship Act of 1992 (28 U.S.C. 152 note) are ex24 tended until the first vacancy occurring in the office

25 of a bankruptcy judge in the applicable district re-
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1 sulting from the death, retirement, resignation, or

2 removal of a bankruptcy judge and occurring—

3 (A) 8 years or more after November 8,

4 1993, with respect to the northern district of

5 Alabama;

6 (B) 10 years or more after October 28,

7 1993, with respect to the district of Delaware;

8 (C) 8 years or more after August 29,

9 1994, with respect to the district of Puerto

10 Rico;

11 (D) 8 years or more after June 27, 1994,

12 with respect to the district of South Carolina;

13 and

14 (E) 8 years or more after November 23,

15 1993, with respect to the eastern district of

16 Tennessee.

17 (2) APPLICABILITY OF OTHER PROVISIONS.—

18 All other provisions of section 3 of the Bankruptcy

19 Judgeship Act of 1992 remain applicable to such

20 temporary judgeship position.

21 (d) TECHNICAL AMENDMENT.—The first sentence of

22 section 152(a)(1) of title 28, United States Code, is

23 amended to read as follows: ‘‘Each bankruptcy judge to

24 be appointed for a judicial district as provided in para25 graph (2) shall be appointed by the United States court
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1 of appeals for the circuit in which such district is lo2 cated.’’.

3 (e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—

4 Section 156 of title 28, United States Code, is amended

5 by adding at the end the following new subsection:

6 ‘‘(g)(1) In this subsection, the term ‘travel

7 expenses’—

8 ‘‘(A) means the expenses incurred by a bank9 ruptcy judge for travel that is not directly related to

10 any case assigned to such bankruptcy judge; and

11 ‘‘(B) shall not include the travel expenses of a

12 bankruptcy judge if—

13 ‘‘(i) the payment for the travel expenses is

14 paid by such bankruptcy judge from the per15 sonal funds of such bankruptcy judge; and

16 ‘‘(ii) such bankruptcy judge does not re17 ceive funds (including reimbursement) from the

18 United States or any other person or entity for

19 the payment of such travel expenses.

20 ‘‘(2) Each bankruptcy judge shall annually submit

21 the information required under paragraph (3) to the chief

22 bankruptcy judge for the district in which the bankruptcy

23 judge is assigned.

24 ‘‘(3)(A) Each chief bankruptcy judge shall submit an

25 annual report to the Director of the Administrative Office
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1 of the United States Courts on the travel expenses of each

2 bankruptcy judge assigned to the applicable district (in3 cluding the travel expenses of the chief bankruptcy judge

4 of such district).

5 ‘‘(B) The annual report under this paragraph shall

6 include—

7 ‘‘(i) the travel expenses of each bankruptcy

8 judge, with the name of the bankruptcy judge to

9 whom the travel expenses apply;

10 ‘‘(ii) a description of the subject matter and

11 purpose of the travel relating to each travel expense

12 identified under clause (i), with the name of the

13 bankruptcy judge to whom the travel applies; and

14 ‘‘(iii) the number of days of each travel de15 scribed under clause (ii), with the name of the bank16 ruptcy judge to whom the travel applies.

17 ‘‘(4)(A) The Director of the Administrative Office of

18 the United States Courts shall—

19 ‘‘(i) consolidate the reports submitted under

20 paragraph (3) into a single report; and

21 ‘‘(ii) annually submit such consolidated report

22 to Congress.

23 ‘‘(B) The consolidated report submitted under this

24 paragraph shall include the specific information required

25 under paragraph (3)(B), including the name of each bank-
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1 ruptcy judge with respect to clauses (i), (ii), and (iii) of

2 paragraph (3)(B).’’.

3 SEC. 323. DEFINITION OF DOMESTIC SUPPORT OBLIGA4 TION.

5 Section 101 of title 11, United States Code, as

6 amended by section 321(g) of this Act, is amended—

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

8 (2) by inserting after paragraph (14) the fol9 lowing:

10 ‘‘(14A) ‘domestic support obligation’ means a

11 debt that accrues before or after the entry of an

12 order for relief under this title that is—

13 ‘‘(A) owed to or recoverable by—

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

15 of the debtor or that child’s legal guardian;

16 or

17 ‘‘(ii) a governmental unit;

18 ‘‘(B) in the nature of alimony, mainte19 nance, or support (including assistance provided

20 by a governmental unit) of such spouse, former

21 spouse, or child, without regard to whether such

22 debt is expressly so designated;

23 ‘‘(C) established or subject to establish24 ment before or after entry of an order for relief
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1 under this title, by reason of applicable provi2 sions of—

3 ‘‘(i) a separation agreement, divorce

4 decree, or property settlement agreement;

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

6 ‘‘(iii) a determination made in accord7 ance with applicable nonbankruptcy law by

8 a governmental unit; and

9 ‘‘(D) not assigned to a nongovernmental

10 entity, unless that obligation is assigned volun11 tarily by the spouse, former spouse, child, or

12 parent solely for the purpose of collecting the

13 debt.’’.

14 SEC. 324. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP15 PORT OBLIGATIONS.

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

17 amended—

18 (1) by striking paragraph (7);

19 (2) by redesignating paragraphs (1) through

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

21 (3) in paragraph (2), as redesignated, by strik22 ing ‘‘First’’ and inserting ‘‘Second’’;

23 (4) in paragraph (3), as redesignated, by strik24 ing ‘‘Second’’ and inserting ‘‘Third’’;
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1 (5) in paragraph (4), as redesignated, by strik2 ing ‘‘Third’’ and inserting ‘‘Fourth’’;

3 (6) in paragraph (5), as redesignated, by strik4 ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;

5 (7) in paragraph (6), as redesignated, by strik6 ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;

7 (8) in paragraph (7), as redesignated, by strik8 ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and

9 (9) by inserting before paragraph (2), as redes10 ignated, the following:

11 ‘‘(1) First, allowed claims for domestic support obli12 gations to be paid in the following order on the condition

13 that funds received under this paragraph by a govern14 mental unit in a case under this title be applied:

15 ‘‘(A) Claims that, as of the date of entry of the

16 order for relief, are owed directly to a spouse, former

17 spouse, or child of the debtor, or the parent of such

18 child, without regard to whether the claim is filed by

19 the spouse, former spouse, child, or parent, or is

20 filed by a governmental unit on behalf of that per21 son.

22 ‘‘(B) Claims that, as of the date of entry of the

23 order for relief, are assigned by a spouse, former

24 spouse, child of the debtor, or the parent of that

25 child to a governmental unit or are owed directly to
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1 a governmental unit under applicable nonbankruptcy

2 law.’’.

3 SEC. 325. REQUIREMENTS TO OBTAIN CONFIRMATION AND

4 DISCHARGE IN CASES INVOLVING DOMESTIC

5 SUPPORT OBLIGATIONS.

6 Title 11, United States Code, is amended—

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

8 following:

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

10 administrative order or statute to pay a domestic

11 support obligation, the debtor has paid all amounts

12 payable under such order or statute for such obliga13 tion that become payable after the date on which the

14 petition is filed.’’;

15 (2) in section 1325(a)—

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

17 the end;

18 (B) in paragraph (6), by striking the pe19 riod at the end and inserting ‘‘; and’’; and

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

21 ‘‘(7) if the debtor is required by a judicial or

22 administrative order or statute to pay a domestic

23 support obligation, the debtor has paid all amounts

24 payable under such order for such obligation that
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1 become payable after the date on which the petition

2 is filed.’’; and

3 (3) in section 1328(a), as amended by section

4 314 of this Act, in the matter preceding paragraph

5 (1), by inserting ‘‘, and with respect to a debtor who

6 is required by a judicial or administrative order to

7 pay a domestic support obligation, certifies that all

8 amounts payable under such order or statute that

9 are due on or before the date of the certification (in10 cluding amounts due before or after the petition was

11 filed) have been paid’’ after ‘‘completion by the debt12 or of all payments under the plan’’.

13 SEC. 326. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC

14 SUPPORT OBLIGATION PROCEEDINGS.

15 Section 362(b) of title 11, United States Code, is

16 amended—

17 (1) by striking paragraph (2) and inserting the

18 following:

19 ‘‘(2) under subsection (a)—

20 ‘‘(A) of the commencement or continuation

21 of an action or proceeding for—

22 ‘‘(i) the establishment of paternity as

23 a part of an effort to collect domestic sup24 port obligations; or
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1 ‘‘(ii) the establishment or modification

2 of an order for domestic support obliga3 tions; or

4 ‘‘(B) the collection of a domestic support

5 obligation from property that is not property of

6 the estate;’’;

7 (2) by inserting after paragraph (4) the fol8 lowing:

9 ‘‘(5) under subsection (a) with respect to the

10 withholding of income pursuant to an order as speci11 fied in section 466(b) of the Social Security Act (42

12 U.S.C. 666(b));

13 (3) in paragraph (17), by striking ‘‘or’’ at the

14 end;

15 (4) in paragraph (18), by striking the period

16 and inserting ‘‘; or’’; and

17 (5) by inserting after paragraph (18) the fol18 lowing:

19 ‘‘(19) under subsection (a) with respect to—

20 ‘‘(A) the withholding, suspension, or re21 striction of drivers’ licenses, professional and

22 occupational licenses, and recreational licenses

23 pursuant to State law, as specified in section

24 466(a)(16) of the Social Security Act (42

25 U.S.C. 666(a)(16)) or with respect to the re-
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1 porting of overdue support owed by an absent

2 parent to any consumer reporting agency as

3 specified in section 466(a)(7) of the Social Se4 curity Act (42 U.S.C. 666(a)(7));

5 ‘‘(B) the interception of tax refunds, as

6 specified in sections 464 and 466(a)(3) of the

7 Social Security Act (42 U.S.C. 664 and

8 666(a)(3)); or

9 ‘‘(C) the enforcement of medical obliga10 tions as specified under title IV of the Social

11 Security Act (42 U.S.C. 601 et seq.).’’.

12 SEC. 327. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR

13 ALIMONY, MAINTENANCE, AND SUPPORT.

14 Section 523 of title 11, United States Code, as

15 amended by section 202 of this Act, is amended—

16 (1) in subsection (a), by striking paragraph (5)

17 and inserting the following:

18 ‘‘(5) for a domestic support obligation;’’;

19 (2) in subsection (c), by striking ‘‘(6), or (15)’’

20 and inserting ‘‘or (6)’’; and

21 (3) in paragraph (15), by striking ‘‘govern22 mental unit’’ and all through the end of the para23 graph and inserting a semicolon.
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1 SEC. 328. CONTINUED LIABILITY OF PROPERTY.

2 Section 522 of title 11, United States Code, as

3 amended by section 320 of this Act, is amended—

4 (1) in subsection (c), by striking paragraph (1)

5 and inserting the following:

6 ‘‘(1) a debt of a kind specified in paragraph (1)

7 or (5) of section 523(a) (in which case, notwith8 standing any provision of applicable nonbankruptcy

9 law to the contrary, such property shall be liable for

10 a debt of a kind specified in section 523(a)(5));’’;

11 and

12 (2) in subsection (f)(1)(A), by striking the dash

13 and all that follows through the end of the subpara14 graph and inserting ‘‘of a kind that is specified in

15 section 523(a)(5); or’’.

16 SEC. 329. PROTECTION OF DOMESTIC SUPPORT CLAIMS

17 AGAINST PREFERENTIAL TRANSFER MO18 TIONS.

19 Section 547(c) of title 11, United States Code, is

20 amended by striking paragraph (7) and inserting the fol21 lowing:

22 ‘‘(7) to the extent such transfer was a bona fide

23 payment of a debt for a domestic support obligation;

24 or’’.
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1 SEC. 330. PROTECTION OF RETIREMENT SAVINGS IN BANK2 RUPTCY.

3 (a) IN GENERAL.—Section 522 of title 11, United

4 States Code, as amended by section 328 of this Act, is

5 amended—

6 (1) in subsection (b)—

7 (A) in paragraph (2)—

8 (i) by striking ‘‘(2)(A) subject to sub9 section (n), any property’’ and inserting:

10 ‘‘(3) Subject to subsection (n), property listed in this

11 paragraph is—

12 ‘‘(A) any property’’;

13 (ii) in subparagraph (A), by striking

14 ‘‘and’’ at the end;

15 (iii) in subparagraph (B), by striking

16 the period at the end and inserting ‘‘;

17 and’’; and

18 (iv) by adding at the end the fol19 lowing:

20 ‘‘(C) retirement funds to the extent that those

21 funds are in a fund or account that is exempt from

22 taxation under section 401, 403, 408, 408A, 414,

23 457, or 501(a) of the Internal Revenue Code of

24 1986 and which has not been pledged or promised

25 to any person in connection with any extension of

26 credit.’’;
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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) of this section, un5 less the State law that is applicable to the debtor under

6 paragraph (3)(A) of this subsection specifically does not

7 so authorize.’’;

8 (C) in the matter preceding paragraph

9 (2)—

10 (i) by striking ‘‘(b)’’ and inserting

11 ‘‘(b)(1)’’;

12 (ii) by striking ‘‘paragraph (2)’’ both

13 places it appears and inserting ‘‘paragraph

14 (3)’’;

15 (iii) by striking ‘‘paragraph (1)’’ each

16 place it appears and inserting ‘‘paragraph

17 (2)’’; and

18 (iv) by striking ‘‘Such property is—’’;

19 and

20 (D) by adding at the end of the subsection

21 the following:

22 ‘‘(4) For purposes of paragraph (3)(C), the following

23 shall apply:

24 ‘‘(A) If the retirement funds are in a retirement

25 fund that has received a favorable determination
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1 pursuant to section 7805 of the Internal Revenue

2 Code of 1986, and that determination is in effect as

3 of the date of the commencement of the case under

4 section 301, 302, or 303, those funds shall be pre5 sumed to be exempt from the estate.

6 ‘‘(B) If the retirement funds are in a retirement

7 fund that has not received a favorable determination

8 pursuant to such section 7805, those funds are ex9 empt from the estate if the debtor demonstrates

10 that—

11 ‘‘(i) no prior determination to the contrary

12 has been made by a court or the Internal Rev13 enue Service; and

14 ‘‘(ii)(I) the retirement fund is in substan15 tial compliance with the applicable requirements

16 of the Internal Revenue Code of 1986; or

17 ‘‘(II) the retirement fund fails to be in

18 substantial compliance with such applicable re19 quirements, the debtor is not materially respon20 sible for that failure.

21 ‘‘(C) A direct transfer of retirement funds from

22 1 fund or account that is exempt from taxation

23 under section 401, 403, 408, 408A, 414, 457, or

24 501(a) of the Internal Revenue Code of 1986, pur25 suant to section 401(a)(31) of the Internal Revenue
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1 Code of 1986, or otherwise, shall not cease to qualify

2 for exemption under paragraph (3)(C) by reason of

3 that direct transfer.

4 ‘‘(D)(i) Any distribution that qualifies as an eli5 gible rollover distribution within the meaning of sec6 tion 402(c) of the Internal Revenue Code of 1986 or

7 that is described in clause (ii) shall not cease to

8 qualify for exemption under paragraph (3)(C) by

9 reason of that distribution.

10 ‘‘(ii) A distribution described in this clause is

11 an amount that—

12 ‘‘(I) has been distributed from a fund or

13 account that is exempt from taxation under sec14 tion 401, 403, 408, 408A, 414, 457, or 501(a)

15 of the Internal Revenue Code of 1986; and

16 ‘‘(II) to the extent allowed by law, is de17 posited in such a fund or account not later than

18 60 days after the distribution of that amount.’’;

19 and

20 (2) in subsection (d)—

21 (A) in the matter preceding paragraph (1),

22 by striking ‘‘subsection (b)(1)’’ and inserting

23 ‘‘subsection (b)(2)’’; and

24 (B) by adding at the end the following:
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1 ‘‘(12) Retirement funds to the extent that those

2 funds are in a fund or account that is exempt from tax3 ation under section 401, 403, 408, 408A, 414, 457, or

4 501(a) of the Internal Revenue Code of 1986.’’.

5 (b) AUTOMATIC STAY.—Section 362(b) of title 11,

6 United States Code, as amended by section 326 of this

7 Act, is amended—

8 (1) in paragraph (18), by striking ‘‘or’’ at the

9 end;

10 (2) in paragraph (19), by striking the period

11 and inserting ‘‘; or’’;

12 (3) by inserting after paragraph (19) the fol13 lowing:

14 ‘‘(20) under subsection (a), of withholding of

15 income from a debtor’s wages and collection of

16 amounts withheld, pursuant to the debtor’s agree17 ment authorizing that withholding and collection for

18 the benefit of a pension, profit-sharing, stock bonus,

19 or other plan established under section 401, 403,

20 408, 408A, 414, 457, or 501(a) of the Internal Rev21 enue Code of 1986 that is sponsored by the em22 ployer of the debtor, or an affiliate, successor, or

23 predecessor of such employer—

24 ‘‘(A) to the extent that the amounts with25 held and collected are used solely for payments
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1 relating to a loan from a plan that satisfies the

2 requirements of section 408(b)(1) of the Em3 ployee Retirement Income Security Act of 1974

4 (29 U.S.C. 1108(b)(1)); or

5 ‘‘(B) in the case of a loan from a thrift

6 savings plan described in subchapter III of title

7 5, that satisfies the requirements of section

8 8433(g) of that title.’’; and

9 (4) by adding at the end of the flush material

10 following paragraph (20) the following: ‘‘Paragraph

11 (20) does not apply to any amount owed to a plan

12 referred to in that paragraph that is incurred under

13 a loan made during the 1-year period preceding the

14 filing of a petition. Nothing in paragraph (20) may

15 be construed to provide that any loan made under

16 a governmental plan under section 414(d) of the In17 ternal Revenue Code of 1986 constitutes a claim or

18 a debt under this title.’’.

19 (c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of

20 title 11, United States Code, as amended by section 202

21 of this Act, is amended—

22 (1) by striking ‘‘or’’ at the end of paragraph

23 (17);

24 (2) by striking the period at the end of para25 graph (18) and inserting ‘‘; or’’; and
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1 (3) by adding at the end the following:

2 ‘‘(19) owed to a pension, profit-sharing, stock

3 bonus, or other plan established under section 401,

4 403, 408, 408A, 414, 457, or 501(c) of the Internal

5 Revenue Code of 1986, pursuant to—

6 ‘‘(A) a loan permitted under section

7 408(b)(1) of the Employee Retirement Income

8 Security Act of 1974 (29 U.S.C. 1108(b)(1));

9 or

10 ‘‘(B) a loan from the thrift savings plan

11 described in subchapter III of title 5, that satis12 fies the requirements of section 8433(g) of that

13 title.

14 Paragraph (19) does not apply to any amount owed to

15 a plan referred to in that paragraph that is incurred under

16 a loan made during the 1-year period preceding the filing

17 of a petition. Nothing in paragraph (19) may be construed

18 to provide that any loan made under a governmental plan

19 under section 414(d) of the Internal Revenue Code of

20 1986 constitutes a claim or a debt under this title.’’.

21 (d) PLAN CONTENTS.—Section 1322 of title 11,

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

23 following:

24 ‘‘(f) A plan may not materially alter the terms of a

25 loan described in section 362(b)(20).’’.
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1 SEC. 331. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED

2 STATES CODE.

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

4 is amended by inserting after paragraph (7) the following:

5 ‘‘(8) Eighth, allowed claims for death or per6 sonal injuries resulting from the operation of a

7 motor vehicle or vessel if such operation was unlaw8 ful because the debtor was intoxicated from using al9 cohol, a drug or another substance.’’.

10 (b) Section 523(a)(9) of title 11, United States Code,

11 is amended by inserting ‘‘or vessel’’ after ‘‘vehicle’’.

12 SEC. 332. DEBT LIMIT INCREASE.

13 Section 104(b) of title 11, United States Code, is

14 amended by adding at the end the following:

15 ‘‘(4) The dollar amount in section 101(18) shall be

16 adjusted at the same times and in the same manner as

17 the dollar amounts in paragraph (1) of this subsection,

18 beginning with the adjustment to be made on April 1,

19 2001.’’.

20 SEC. 333. ELIMINATION OF REQUIREMENT THAT FAMILY

21 FARMER AND SPOUSE RECEIVE OVER 50 PER22 CENT OF INCOME FROM FARMING OPER23 ATION IN YEAR PRIOR TO BANKRUPTCY.

24 Section 101(18)(A) of title 11, United States Code,

25 is amended by striking ‘‘the taxable year preceding the
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1 taxable year’’ and inserting ‘‘at least 1 of the 3 calendar

2 years preceding the year’’.

3 SEC. 334. PROHIBITION OF RETROACTIVE ASSESSMENT OF

4 DISPOSABLE INCOME.

5 (a) IN GENERAL.—Section 1225(b) of title 11,

6 United States Code, is amended—

7 (1) by redesignating paragraph (2) as para8 graph (3) and by inserting after paragraph (1) the

9 following:

10 ‘‘(2) The plan shall be confirmed if—

11 ‘‘(A) the plan provides for specific amounts of

12 property to be distributed on account of allowed un13 secured claims as required by paragraph (1)(B);

14 ‘‘(B) the amounts under subparagraph (A)

15 equal or exceed the debtor’s projected disposable in16 come for the applicable period; and

17 ‘‘(C) the plan meets the requirements for con18 firmation other than those of this subsection, the

19 plan shall be confirmed.’’.

20 (b) MODIFICATION OF PLAN.—Section 1229 of title

21 11, United States Code, is amended by adding at the end

22 the following:

23 ‘‘(d)(1) A modification of the plan under this section

24 may not increase the amount of payments that were due

25 prior to the date of the order modifying the plan.
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1 ‘‘(2) A modification of the plan under this section to

2 increase payments based on an increase in the debtor’s

3 disposable income may not require payments to unsecured

4 creditors in any particular month greater than the debt5 or’s disposable income for that month unless the debtor

6 proposes such a modification.

7 ‘‘(3) A modification of the plan in the last year of

8 the plan shall not require payments that would leave the

9 debtor with insufficient funds to carry on the farming op10 eration after the plan is completed unless the debtor pro11 poses such a modification.’’.

12 SEC. 335. AMENDMENT TO SECTION 1325 OF TITLE 11,

13 UNITED STATES CODE.

14 Section 1325(b)(2) of title 11, United States Code,

15 is amended by inserting ‘‘(other than child support pay16 ments, foster care payments, or disability payments for

17 a dependent child made in accordance with applicable non18 bankruptcy law and which is reasonably necessary to be

19 expended)’’ after ‘‘received by the debtor’’.

20 SEC. 336. PROTECTION OF SAVINGS EARMARKED FOR THE

21 POSTSECONDARY EDUCATION OF CHILDREN.

22 Section 541(b) of title 11, United States Code, is

23 amended—

24 (1) in paragraph (5), by striking ‘‘or’’ at the

25 end;
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1 (2) by redesignating paragraph (5) as para2 graph (7); and

3 (2) by inserting after paragraph (4) the fol4 lowing:

5 ‘‘(5) except as otherwise provided under appli6 cable State law, any funds placed in a qualified

7 State tuition program (as described in section

8 529(b) of the Internal Revenue Code of 1986) at

9 least 180 days before the date of entry of the order

10 for relief;

11 ‘‘(6) any funds placed in an education indi12 vidual retirement account (as defined in section

13 530(b)(1) of the Internal Revenue Code of 1986) at

14 least 180 days before the date of entry of the order

15 for relief; or’’.

16 TITLE IV—FINANCIAL

17 INSTRUMENTS

18 SEC. 401. BANKRUPTCY CODE AMENDMENTS.

19 (a) DEFINITIONS OF FORWARD CONTRACT, REPUR20 CHASE AGREEMENT, SECURITIES CLEARING AGENCY,

21 SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU22 RITIES CONTRACT.—Title 11, United States Code, is

23 amended—

24 (1) in section 101—

25 (A) in paragraph (25)—
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1 (i) by striking ‘‘means a contract’’

2 and inserting ‘‘means—

3 ‘‘(A) a contract’’;

4 (ii) by striking ‘‘, or any combination

5 thereof or option thereon;’’ and inserting

6 ‘‘, or any other similar agreement;’’; and

7 (iii) by adding at the end the fol8 lowing:

9 ‘‘(B) a combination of agreements or

10 transactions referred to in subparagraphs (A)

11 and (C);

12 ‘‘(C) an option to enter into an agreement

13 or transaction referred to in subparagraph (A)

14 or (B);

15 ‘‘(D) a master netting agreement that pro16 vides for an agreement or transaction referred

17 to in subparagraph (A), (B), or (C), together

18 with all supplements to such master netting

19 agreement, without regard to whether such

20 master netting agreement provides for an

21 agreement or transaction that is not a forward

22 contract under this paragraph, except that such

23 master netting agreement shall be considered to

24 be a forward contract under this paragraph

25 only with respect to each agreement or trans-
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1 action under such master netting agreement

2 that is referred to in subparagraph (A), (B), or

3 (C); or

4 ‘‘(E) a security agreement or arrangement,

5 or other credit enhancement, related to any

6 agreement, a contract, option, or transaction re7 ferred to in subparagraph (A), (B), (C), or

8 (D);’’;

9 (B) by striking paragraph (47) and insert10 ing the following:

11 ‘‘(47) ‘repurchase agreement’ and ‘reverse re12 purchase agreement’—

13 ‘‘(A) mean—

14 ‘‘(i) an agreement, including related

15 terms, that provides for the transfer of—

16 ‘‘(I) a certificate of deposit,

17 mortgage related security (as defined

18 in section 3 of the Securities Ex19 change Act of 1934), mortgage loan,

20 interest in a mortgage related security

21 or mortgage loan, eligible bankers’ ac22 ceptance, or qualified foreign govern23 ment security (defined for purposes of

24 this paragraph to mean a security

25 that is a direct obligation of, or that
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•S 945 IS

1 is fully guaranteed by, the central

2 government of a member of the Orga3 nization for Economic Cooperation

4 and Development); or

5 ‘‘(II) a security that is a direct

6 obligation of, or that is fully guaran7 teed by, the United States or an agen8 cy of the United States against the

9 transfer of funds by the transferee of

10 such certificate of deposit, eligible

11 bankers’ acceptance, security, loan, or

12 interest;

13 with a simultaneous agreement by such

14 transferee to transfer to the transferor

15 thereof a certificate of deposit, eligible

16 bankers’ acceptance, security, loan, or in17 terest of the kind described in subclause

18 (I) or (II), at a date certain that is not

19 later than 1 year after the date of the

20 transferor’s transfer or on demand, against

21 the transfer of funds;

22 ‘‘(ii) a combination of agreements or

23 transactions referred to in clauses (i) and

24 (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 netting agreement that

5 provides for an agreement or transaction

6 referred to in clause (i), (ii), or (iii), to7 gether with all supplements to such master

8 netting agreement, without regard to

9 whether such master netting agreement

10 provides for an agreement or transaction

11 that is not a repurchase agreement under

12 this subparagraph, except that such master

13 netting agreement shall be considered to be

14 a repurchase agreement under this sub15 paragraph only with respect to each agree16 ment or transaction under such master

17 netting agreement that is referred to in

18 clause (i), (ii), or (iii); or

19 ‘‘(v) a security agreement or arrange20 ment, or other credit enhancement, directly

21 pertaining to a contract referred to in

22 clause (i), (ii), (iii), or (iv); and

23 ‘‘(B) do not include a repurchase obliga24 tion under a participation in a commercial

25 mortgage loan;’’; and
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1 (C) by striking paragraph (53B) and in2 serting the following:

3 ‘‘(53B) ‘swap agreement’—

4 ‘‘(A) means—

5 ‘‘(i) an agreement, including the

6 terms and conditions incorporated by ref7 erence in such agreement, that is—

8 ‘‘(I) an interest rate swap, op9 tion, future, or forward agreement, in10 cluding a rate floor, rate cap, rate col11 lar, cross-currency rate swap, and

12 basis swap;

13 ‘‘(II) a spot, same day-tomorrow,

14 tomorrow-next, forward, or other for15 eign exchange or precious metals

16 agreement;

17 ‘‘(III) a currency swap, option,

18 future, or forward agreement;

19 ‘‘(IV) an equity index or an eq20 uity swap, option, future, or forward

21 agreement;

22 ‘‘(V) a debt index or a debt swap,

23 option, future, or forward agreement;
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1 ‘‘(VI) a credit spread or a credit

2 swap, option, future, or forward

3 agreement; or

4 ‘‘(VII) a commodity index or a

5 commodity swap, option, future, or

6 forward agreement;

7 ‘‘(ii) an agreement or transaction that

8 is similar to an agreement or transaction

9 referred to in clause (i) that—

10 ‘‘(I) is currently, or in the future

11 becomes, regularly entered into in the

12 swap market (including terms and

13 conditions incorporated by reference

14 therein); and

15 ‘‘(II) is a forward, swap, future,

16 or option on a rate, currency, com17 modity, equity security, or other eq18 uity instrument, on a debt security or

19 other debt instrument, or on an eco20 nomic index or measure of economic

21 risk or value;

22 ‘‘(iii) a combination of agreements or

23 transactions referred to in clauses (i) and

24 (ii);
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1 ‘‘(iv) an option to enter into an agree2 ment or transaction referred to in this sub3 paragraph; or

4 ‘‘(v) a master netting agreement that

5 provides for an agreement or transaction

6 referred to in clause (i), (ii), (iii), or (iv),

7 together with all supplements to such mas8 ter netting agreement and without regard

9 to whether such master netting agreement

10 contains an agreement or transaction de11 scribed in any such clause, but only with

12 respect to each agreement or transaction

13 referred to in any such clause that is under

14 such master netting agreement; except that

15 ‘‘(B) the definition under subparagraph

16 (A) is applicable for purposes of this title only,

17 and shall not be construed or applied so as to

18 challenge or affect the characterization, defini19 tion, or treatment of any swap agreement under

20 any other statute, regulation, or rule, including

21 the Securities Act of 1933, the Securities Ex22 change Act of 1934, the Public Utility Holding

23 Company Act of 1935, the Trust Indenture Act

24 of 1939, the Investment Company Act of 1940,

25 the Investment Advisers Act of 1940, the Secu-
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•S 945 IS

1 rities Investor Protection Act of 1970, the Com2 modity Exchange Act, and the regulations pre3 scribed by the Securities and Exchange Com4 mission or the Commodity Futures Trading

5 Commission.’’;

6 (2) in section 741, by striking paragraph (7)

7 and inserting the following:

8 ‘‘(7) ‘securities contract’—

9 ‘‘(A) means—

10 ‘‘(i) a contract for the purchase, sale,

11 or loan of a security, a certificate of de12 posit, a mortgage loan or an interest in a

13 mortgage loan, a group or index of securi14 ties, certificates of deposit, or mortgage

15 loans or interests therein (including an in16 terest therein or based on the value there17 of), or option on any of the foregoing, in18 cluding an option to purchase or sell any

19 of the foregoing;

20 ‘‘(ii) an option entered into on a na21 tional securities exchange relating to for22 eign currencies;

23 ‘‘(iii) the guarantee by or to a securi24 ties clearing agency of a settlement of

25 cash, securities, certificates of deposit,
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•S 945 IS

1 mortgage loans or interests therein, group

2 or index of securities, or mortgage loans or

3 interests therein (including any interest

4 therein or based on the value thereof), or

5 option on any of the foregoing, including

6 an option to purchase or sell any of the

7 foregoing;

8 ‘‘(iv) a margin loan;

9 ‘‘(v) any other agreement or trans10 action that is similar to an agreement or

11 transaction referred to in this subpara12 graph;

13 ‘‘(vi) a combination of the agreements

14 or transactions referred to in this subpara15 graph;

16 ‘‘(vii) an option to enter into an

17 agreement or transaction referred to in

18 this subparagraph;

19 ‘‘(viii) a master netting agreement

20 that provides for an agreement or trans21 action referred to in clause (i), (ii), (iii),

22 (iv), (v), (vi), or (vii), together with all

23 supplements to such master netting agree24 ment, without regard to whether such mas25 ter netting agreement provides for an
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•S 945 IS

1 agreement or transaction that is not a se2 curities contract under this subparagraph,

3 except that such master netting agreement

4 shall be considered to be a securities con5 tract under this subparagraph only with

6 respect to each agreement or transaction

7 under such master netting agreement that

8 is referred to in clause (i), (ii), (iii), (iv),

9 (v), (vi), or (vii); or

10 ‘‘(ix) a security agreement or arrange11 ment, or other credit enhancement, related

12 to any agreement or transaction referred

13 to in this subparagraph; and

14 ‘‘(B) does not include a purchase, sale, or

15 repurchase obligation under a participation in,

16 or servicing agreement for, a commercial mort17 gage loan;’’; and

18 (3) in section 761(4)—

19 (A) by striking ‘‘or’’ at the end of subpara20 graph (D); and

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

22 ‘‘(F) any other agreement or transaction

23 that is similar to an agreement or transaction

24 referred to in this paragraph;
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•S 945 IS

1 ‘‘(G) a combination of the agreements or

2 transactions referred to in this paragraph;

3 ‘‘(H) an option to enter into an agreement

4 or transaction referred to in this paragraph;

5 ‘‘(I) a master netting agreement that pro6 vides for an agreement or transaction referred

7 to in subparagraph (A), (B), (C), (D), (E), (F),

8 (G), or (H), together with all supplements to

9 such master netting agreement, without regard

10 to whether such master netting agreement pro11 vides for an agreement or transaction that is

12 not a commodity contract under this paragraph,

13 except that such master netting agreement shall

14 be considered to be a commodity contract under

15 this paragraph only with respect to each agree16 ment or transaction under such master netting

17 agreement that is referred to in subparagraph

18 (A), (B), (C), (D), (E), (F), (G), or (H); or

19 ‘‘(J) a security agreement or arrangement,

20 or other credit enhancement, related to any

21 agreement or transaction referred to in this

22 paragraph.’’.

23 (b) DEFINITIONS OF FINANCIAL INSTITUTION, FI24 NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER-
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•S 945 IS

1 CHANT.—Section 101 of title 11, United States Code, is

2 amended—

3 (1) by striking paragraph (22) and inserting

4 the following:

5 ‘‘(22) ‘financial institution’ means—

6 ‘‘(A) a Federal reserve bank, or an entity

7 that is a commercial or savings bank, industrial

8 savings bank, savings and loan association,

9 trust company, or receiver or conservator for

10 such entity; and

11 ‘‘(B) if such Federal reserve bank, re12 ceiver, or conservator or entity is acting as

13 agent or custodian for a customer in connection

14 with a securities contract, as defined in section

15 741, such customer;’’;

16 (2) by inserting after paragraph (22) the fol17 lowing:

18 ‘‘(22A) ‘financial participant’ means an entity

19 that—

20 ‘‘(A) is a party to a securities contract,

21 commodity contract or forward contract;

22 ‘‘(B) on the date of the filing of the peti23 tion, has 1 or more agreements or transactions

24 under section 561(a)(2) with the debtor or any

25 other entity (other than an affiliate) of a total
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•S 945 IS

1 gross dollar value of not less than

2 $1,000,000,000 in notional or actual principal

3 amount outstanding on any date during the

4 previous 15-month period; or

5 ‘‘(C) has gross mark-to-market positions of

6 not less than $100,000,000 (aggregated across

7 counterparties) in an agreement or transaction

8 under subparagraph (A) with the debtor or any

9 other entity (other than an affiliate) on any

10 date during the previous 15-month period;’’;

11 and

12 (3) by striking paragraph (26) and inserting

13 the following:

14 ‘‘(26) ‘forward contract merchant’ means a

15 Federal reserve bank, or an entity, the business of

16 which consists in whole or in part of entering into

17 forward contracts as or with merchants or in a com18 modity, as defined or in section 761, or any similar

19 good, article, service, right, or interest that is pres20 ently or in the future becomes the subject of dealing

21 or in the forward contract trade;’’.

22 (c) DEFINITION OF MASTER NETTING AGREEMENT

23 AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec24 tion 101 of title 11, United States Code, is amended by
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•S 945 IS

1 inserting after paragraph (38) the following new para2 graphs:

3 ‘‘(38A) the term ‘master netting agreement’—

4 ‘‘(A) means an agreement providing for

5 the exercise of rights, including rights of net6 ting, setoff, liquidation, termination, accelera7 tion, or closeout, under or in connection with 1

8 or more contracts that are described in any 1

9 or more of paragraphs (1) through (5) of sec10 tion 561(a), or any security agreement or ar11 rangement or other credit enhancement related

12 to 1 or more of the foregoing; except that

13 ‘‘(B) if a master netting agreement con14 tains provisions relating to agreements or trans15 actions that are not contracts described in para16 graphs (1) through (5) of section 561(a), the

17 master netting agreement shall be deemed to be

18 a master netting agreement only with respect to

19 those agreements or transactions that are de20 scribed in any 1 or more of paragraphs (1)

21 through (5) of section 561(a); and

22 ‘‘(38B) the term ‘master netting agreement

23 participant’ means an entity that, at any time before

24 the filing of the petition, is a party to an out-
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•S 945 IS

1 standing master netting agreement with the debt2 or;’’.

3 (d) SWAP AGREEMENTS, SECURITIES CONTRACTS,

4 COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR5 CHASE AGREEMENTS, AND MASTER NETTING AGREE6 MENTS UNDER THE AUTOMATIC STAY.—

7 (1) IN GENERAL.—Section 362(b) of title 11,

8 United States Code, as amended by section 330 of

9 this Act, is amended—

10 (A) in paragraph (6), by inserting ‘‘,

11 pledged to, and under the control of,’’ after

12 ‘‘held by’’;

13 (B) in paragraph (7), by inserting ‘‘,

14 pledged to, and under the control of,’’ after

15 ‘‘held by’’;

16 (C) by striking paragraph (17) and insert17 ing the following:

18 ‘‘(17) under subsection (a), of the setoff by a

19 swap participant of a mutual debt and claim under

20 or in connection with a swap agreement that con21 stitutes the setoff of a claim against the debtor for

22 a payment or transfer due from the debtor under or

23 in connection with a swap agreement against a pay24 ment due to the debtor from the swap participant

25 under or in connection with a swap agreement or
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•S 945 IS

1 against cash, securities, or other property held by,

2 pledged to, and under the control of, or due from

3 such swap participant to guarantee, secure, or settle

4 a swap agreement;’’;

5 (D) in paragraph (19), by striking ‘‘or’’ at

6 the end;

7 (E) in paragraph (20), by striking the pe8 riod at the end and inserting ‘‘; or’’; and

9 (F) by inserting after paragraph (20) the

10 following:

11 ‘‘(21) under subsection (a), of the setoff by a

12 master netting agreement participant of a mutual

13 debt and claim, to the extent such participant is eli14 gible to exercise such offset rights under paragraph

15 (6), (7), or (17) for each individual contract covered

16 by the master netting agreement in issue.’’.

17 (2) LIMITATION.—Section 362 of title 11,

18 United States Code, as amended by section 432(2)

19 of this Act, is amended by adding at the end the fol20 lowing:

21 ‘‘(i) The exercise of rights not subject to the stay

22 arising under subsection (a) pursuant to paragraph (6),

23 (7), or (17) of subsection (b) shall not be stayed by an

24 order of a court or administrative agency in any pro25 ceeding under this title.’’.
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•S 945 IS

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 (104 Stat. 267 et seq.))—

6 (A) by striking ‘‘under a swap agreement’’;

7 and

8 (B) by striking ‘‘in connection with a swap

9 agreement’’ and inserting ‘‘under or in connec10 tion with any swap agreement’’; and

11 (2) by inserting before subsection (i) (as redes12 ignated by section 407 of this Act) the following new

13 subsection:

14 ‘‘(h) Notwithstanding sections 544, 545, 547,

15 548(a)(2)(B), and 548(b), the trustee may not avoid a

16 transfer made by or to a master netting agreement partici17 pant under or in connection with any master netting

18 agreement or any individual contract covered thereby that

19 is made before the commencement of the case, and except

20 to the extent that the trustee could otherwise avoid such

21 a transfer made under an individual contract covered by

22 such master netting agreement (except under section

23 548(a)(1)(A)).’’.
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•S 945 IS

1 (f) FRAUDULENT TRANSFERS OF MASTER NETTING

2 AGREEMENTS.—Section 548(d)(2) of title 11, United

3 States Code, is amended—

4 (1) in subparagraph (C), by striking ‘‘and’’;

5 (2) in subparagraph (D), by striking the period

6 at the end and inserting ‘‘; and’’; and

7 (3) by adding at the end the following new sub8 paragraph:

9 ‘‘(E) a master netting agreement partici10 pant that receives a transfer in connection with

11 a master netting agreement or any individual

12 contract covered thereby takes for value to the

13 extent of such transfer, except, with respect to

14 a transfer under any individual contract covered

15 thereby, to the extent that such master netting

16 agreement participant otherwise did not take

17 (or is otherwise not deemed to have taken) such

18 transfer for value.’’.

19 (g) TERMINATION OR ACCELERATION OF SECURITIES

20 CONTRACTS.—Section 555 of title 11, United States Code,

21 is amended—

22 (1) by striking the section heading and insert23 ing the following:
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1 ‘‘§ 555. Contractual right to liquidate, terminate, or

2 accelerate a securities contract’’;

3 and

4 (2) in the first sentence, by striking ‘‘liquida5 tion’’ and inserting ‘‘liquidation, termination, or ac6 celeration’’.

7 (h) TERMINATION OR ACCELERATION OF COMMOD8 ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,

9 United States Code, is amended—

10 (1) by striking the section heading and insert11 ing the following:

12 ‘‘§ 556. Contractual right to liquidate, terminate, or

13 accelerate a commodities contract or for14 ward contract’’;

15 and

16 (2) in the first sentence, by striking ‘‘liquida17 tion’’ and inserting ‘‘liquidation, termination, or ac18 celeration’’.

19 (i) TERMINATION OR ACCELERATION OF REPUR20 CHASE AGREEMENTS.—Section 559 of title 11, United

21 States Code, is amended—

22 (1) by striking the section heading and insert23 ing the following:

24 ‘‘§ 559. Contractual right to liquidate, terminate, or

25 accelerate a repurchase agreement’’;

26 and
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1 (2) in the first sentence, by striking ‘‘liquida2 tion’’ and inserting ‘‘liquidation, termination, or ac3 celeration’’.

4 (j) LIQUIDATION, TERMINATION, OR ACCELERATION

5 OF SWAP AGREEMENTS.—Section 560 of title 11, United

6 States Code, is amended—

7 (1) by striking the section heading and insert8 ing the following:

9 ‘‘§ 560. Contractual right to liquidate, terminate, or

10 accelerate a swap agreement’’;

11 (2) in the first sentence, by striking ‘‘termi12 nation of a swap agreement’’ and inserting ‘‘liquida13 tion, termination, or acceleration of a swap agree14 ment’’; and

15 (3) by striking ‘‘in connection with any swap

16 agreement’’ and inserting ‘‘in connection with the

17 termination, liquidation, or acceleration of a swap

18 agreement’’.

19 (k) LIQUIDATION, TERMINATION, ACCELERATION, OR

20 OFFSET UNDER A MASTER NETTING AGREEMENT AND

21 ACROSS CONTRACTS.—Title 11, United States Code, is

22 amended by inserting after section 560 the following new

23 section:
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•S 945 IS

1 ‘‘§ 561. Contractual right to terminate, liquidate, ac2 celerate, or offset under a master netting

3 agreement and across contracts

4 ‘‘(a) Subject to subsection (b), the exercise of any

5 contractual right, because of a condition of the kind speci6 fied in section 365(e)(1), to cause the termination, liquida7 tion, or acceleration of or to offset or net termination val8 ues, payment amounts or other transfer obligations arising

9 under or in connection with 1 or more (or the termination,

10 liquidation, or acceleration of 1 or more)—

11 ‘‘(1) securities contracts, as defined in section

12 741(7);

13 ‘‘(2) commodity contracts, as defined in section

14 761(4);

15 ‘‘(3) forward contracts;

16 ‘‘(4) repurchase agreements;

17 ‘‘(5) swap agreements; or

18 ‘‘(6) master netting agreements,

19 shall not be stayed, avoided, or otherwise limited by oper20 ation of any provision of this title or by any order of a

21 court or administrative agency in any proceeding under

22 this title.

23 ‘‘(b)(1) A party may exercise a contractual right de24 scribed in subsection (a) to terminate, liquidate, or accel25 erate only to the extent that such party could exercise such

26 a right under section 555, 556, 559, or 560 for each indi-
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•S 945 IS

1 vidual contract covered by the master netting agreement

2 in issue.

3 ‘‘(2)(A) A party may not exercise a contractual right

4 described in subsection (a) to offset or to net obligations

5 arising under, or in connection with, a commodity contract

6 against obligations arising under, or in connection with,

7 any instrument listed in subsection (a), if the obligations

8 are not mutual.

9 ‘‘(B) If a debtor is a commodity broker subject to

10 subchapter IV of chapter 7,a party may not net or offset

11 an obligation to the debtor arising under, or in connection

12 with, a commodity contract against any claim arising

13 under, or in connection with, other instruments if that

14 party has no positive net equity in the commodity account

15 of the debtor, as calculated under subchapter IV.

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 national securities exchange, a national securities associa19 tion, or a securities clearing agency, a right set forth in

20 a bylaw of a clearing organization or contract market or

21 in a resolution of the governing board thereof, and a right,

22 whether or not evidenced in writing, arising under com23 mon law, under law merchant, or by reason of normal

24 business practice.’’.
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•S 945 IS

1 (l) MUNICIPAL BANKRUPTCIES.—Section 901 of title

2 11, United States Code, is amended—

3 (1) by inserting ‘‘, 555, 556’’ after ‘‘553’’; and

4 (2) by inserting ‘‘, 559, 560, 561, 562,’’ after

5 ‘‘557’’.

6 (m) ANCILLARY PROCEEDINGS.—Section 304 of title

7 11, United States Code, is amended by adding at the end

8 the following:

9 ‘‘(d) Any provisions of this title relating to securities

10 contracts, commodity contracts, forward contracts, repur11 chase agreements, swap agreements, or master netting

12 agreements shall apply in a case ancillary to a foreign pro13 ceeding under this section or any other section of this title,

14 so that enforcement of contractual provisions of such con15 tracts and agreements in accordance with their terms—

16 ‘‘(1) shall not be stayed or otherwise limited

17 by—

18 ‘‘(A) operation of any provision of this

19 title; or

20 ‘‘(B) order of a court in any case under

21 this title;

22 ‘‘(2) shall limit avoidance powers to the same

23 extent as in a proceeding under chapter 7 or 11; and
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1 ‘‘(3) shall not be limited based on the presence

2 or absence of assets of the debtor in the United

3 States.’’.

4 (n) COMMODITY BROKER LIQUIDATIONS.—Title 11,

5 United States Code, is amended by inserting after section

6 766 the following:

7 ‘‘§ 767. Commodity broker liquidation and forward

8 contract merchants, commodity brokers,

9 stockbrokers, financial institutions, secu10 rities clearing agencies, swap partici11 pants, repo participants, and master net12 ting agreement participants

13 ‘‘Notwithstanding any other provision of this title,

14 the exercise of rights by a forward contract merchant,

15 commodity broker, stockbroker, financial institution, secu16 rities clearing agency, swap participant, repo participant,

17 or master netting agreement participant under this title

18 shall not affect the priority of any unsecured claim it may

19 have after the exercise of such rights or affect any provi20 sion of this subchapter relating to customer property or

21 distributions.’’.

22 (o) STOCKBROKER LIQUIDATIONS.—Title 11, United

23 States Code, is amended by inserting after section 752 the

24 following:
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1 ‘‘§ 753. Stockbroker liquidation and forward contract

2 merchants, commodity brokers, stock3 brokers, financial institutions, securities

4 clearing agencies, swap participants,

5 repo participants, and master netting

6 agreement participants

7 ‘‘Notwithstanding any other provision of this title,

8 the exercise of rights by a forward contract merchant,

9 commodity broker, stockbroker, financial institution, secu10 rities clearing agency, swap participant, repo participant,

11 or master netting agreement participant under this title

12 shall not affect the priority of any unsecured claim it may

13 have after the exercise of rights or affect any provision

14 of this subchapter relating to customer property or dis15 tributions.’’.

16 (p) SETOFF.—Section 553 of title 11, United States

17 Code, is amended—

18 (1) in subsection (a)(3)(C), by inserting ‘‘(ex19 cept for a setoff of a kind described in section

20 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(21), 555,

21 556, 559, 560, or 561)’’ before the period; and

22 (2) in subsection (b)(1), by striking

23 ‘‘362(b)(14),’’ and inserting ‘‘362(b)(17),

24 362(b)(21), 555, 556, 559, 560,’’.
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1 (q) SECURITIES CONTRACTS, COMMODITY CON2 TRACTS, AND FORWARD CONTRACTS.—Title 11, United

3 States Code, is amended—

4 (1) in section 362(b)(6), by striking ‘‘financial

5 institutions,’’ each place such term appears and in6 serting ‘‘financial institution, financial participant’’;

7 (2) in section 546(e), by inserting ‘‘financial

8 participant’’ after ‘‘financial institution,’’;

9 (3) in section 548(d)(2)(B), by inserting ‘‘fi10 nancial participant’’ after ‘‘financial institution,’’;

11 (4) in section 555—

12 (A) by inserting ‘‘financial participant’’

13 after ‘‘financial institution,’’; and

14 (B) by inserting before the period ‘‘, a

15 right set forth in a bylaw of a clearing organi16 zation or contract market or in a resolution of

17 the governing board thereof, and a right,

18 whether or not in writing, arising under com19 mon law, under law merchant, or by reason of

20 normal business practice’’; and

21 (5) in section 556, by inserting ‘‘, financial par22 ticipant’’ after ‘‘commodity broker’’.

23 (r) TECHNICAL AND CONFORMING AMENDMENT.—

24 Section 104 of title 11, United States Code, is amended

25 by adding at the end the following:
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1 ‘‘(c) EXCEPTION FOR CERTAIN DEFINED TERMS.—

2 No adjustments shall be made under this section to the

3 dollar amounts set forth in the definition of the term ‘fi4 nancial participant’ in section 101 (22A).’’.

5 (s) CONFORMING AMENDMENTS.—Title 11 of the

6 United States Code is amended—

7 (1) in the table of sections for chapter 5—

8 (A) by striking the items relating to sec9 tions 555 and 556 and inserting the following:

‘‘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.’’;

10 (B) by striking the items relating to sec11 tions 559 and 560 and inserting the following:

‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase

agreement.

‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agreement.’’;

12 and

13 (C) by adding after the item relating to

14 section 560 the following:

‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a

master netting agreement and across contracts.’’;

15 and

16 (2) in the table of sections for chapter 7—

17 (A) by inserting after the item relating to

18 section 766 the following:
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‘‘767. Commodity broker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities

clearing agencies, swap participants, repo participants, and

master netting agreement participants.’’;

1 and

2 (B) by inserting after the item relating to

3 section 752 the following:

‘‘753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing

agencies, swap participants, repo participants, and master netting agreement participants.’’.

4 SEC. 402. DAMAGE MEASURE.

5 (a) IN GENERAL.—Title 11, United States Code, is

6 amended by inserting after section 561 (as added by sec7 tion 401(b)) the following:

8 ‘‘§ 562. Damage measure in connection with swap

9 agreements, securities contracts, forward

10 contracts, commodity contracts, repur11 chase agreements, or master netting

12 agreements

13 ‘‘If the trustee rejects a swap agreement, securities

14 contract as defined in section 741, forward contract, re15 purchase agreement, or master netting agreement pursu16 ant to section 365(a), or if a forward contract merchant,

17 stockbroker, financial institution, securities clearing agen18 cy, repo participant, master netting agreement partici19 pant, or swap participant liquidates, terminates, or accel20 erates any such contract or agreement, damages shall be

21 measured as of the earlier of—
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1 ‘‘(1) the date of such rejection; or

2 ‘‘(2) the date of such liquidation, termination,

3 or acceleration.’’.

4 (b) CLAIMS ARISING FROM REJECTION.—Section

5 502(g) of title 11, United States Code, is amended—

6 (1) by designating the existing text as para7 graph (1); and

8 (2) by adding at the end the following new

9 paragraph:

10 ‘‘(2) A claim for damages calculated in accord11 ance with section 562 shall be allowed under sub12 section (a), (b), or (c) of this section or disallowed

13 under subsection (d) or (e) of this section as if such

14 claim had arisen before the date of the filing of the

15 petition.’’.

16 SEC. 403. ASSET-BACKED SECURITIZATIONS.

17 Section 541 of title 11, United States Code, as

18 amended by section 336 of this Act, is amended—

19 (1) in subsection (b)—

20 (A) by striking ‘‘or’’ at the end of para21 graph (6); and

22 (B) by redesignating paragraph (7) as

23 paragraph (8);

24 (2) by inserting after paragraph (6) the fol25 lowing:
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1 ‘‘(7) any eligible asset (or proceeds thereof), to

2 the extent that such eligible asset was transferred by

3 the debtor, before the date of commencement of the

4 case, to an eligible entity in connection with an

5 asset-backed securitization, except to the extent such

6 asset (or proceeds or value thereof) may be recov7 ered by the trustee under section 550 by reason of

8 avoidance under section 548(a); or’’; and

9 (3) by adding at the end the following new sub10 section:

11 ‘‘(e) In this section:

12 ‘‘(1) The term ‘asset-backed securitization’

13 means a transaction in which eligible assets trans14 ferred to an eligible entity are used as the source of

15 payment on securities, the most senior of which are

16 rated investment grade by 1 or more nationally rec17 ognized securities rating organizations, issued by an

18 issuer.

19 ‘‘(2) The term ‘eligible asset’ means—

20 ‘‘(A) financial assets (including interests

21 therein and proceeds thereof), either fixed or re22 volving, including residential and commercial

23 mortgage loans, consumer receivables, trade re24 ceivables, and lease receivables, that, by their

25 terms, convert into cash within a finite time pe-
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1 riod, plus any rights or other assets designed to

2 assure the servicing or timely distribution of

3 proceeds to security holders;

4 ‘‘(B) cash; and

5 ‘‘(C) securities.

6 ‘‘(3) The term ‘eligible entity’ means—

7 ‘‘(A) an issuer; or

8 ‘‘(B) a trust, corporation, partnership, or

9 other entity engaged exclusively in the business

10 of acquiring and transferring eligible assets di11 rectly or indirectly to an issuer and taking ac12 tions ancillary thereto.

13 ‘‘(4) The term ‘issuer’ means a trust, corpora14 tion, partnership, or other entity engaged exclusively

15 in the business of acquiring and holding eligible as16 sets, issuing securities backed by eligible assets, and

17 taking actions ancillary thereto.

18 ‘‘(5) The term ‘transferred’ means, with respect

19 to a debtor, that the debtor, under a written agree20 ment, represented and warranted that eligible assets

21 were sold, contributed, or otherwise conveyed with

22 the intention of removing them from the estate of

23 the debtor pursuant to subsection (b)(5), without re24 gard to—
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1 ‘‘(A) whether the debtor directly or indi2 rectly obtained or held an interest in the issuer

3 or in any securities issued by the issuer;

4 ‘‘(B) whether the debtor had an obligation

5 to repurchase or to service or supervise the

6 servicing of all or any portion of such eligible

7 assets; or

8 ‘‘(C) the characterization of such sale, con9 tribution, or other conveyance for tax, account10 ing, regulatory reporting, or other purposes.’’.

11 SEC. 404. PROHIBITION ON CERTAIN ACTIONS FOR FAIL12 URE TO INCUR FINANCE CHARGES.

13 Section 106 of the Truth in Lending Act (15 U.S.C.

14 1605) is amended by adding at the end the following:

15 ‘‘(g) PROHIBITION ON CERTAIN ACTIONS FOR FAIL16 URE TO INCUR FINANCE CHARGES.—A creditor may not,

17 solely because a consumer has not incurred finance

18 charges in connection with an extension of credit—

19 ‘‘(1) refuse to renew or continue to offer the ex20 tension of credit to that consumer; or

21 ‘‘(2) charge a fee to that consumer in lieu of a

22 finance charge.’’.
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1 SEC. 405. FEES ARISING FROM CERTAIN OWNERSHIP IN2 TERESTS.

3 Section 523(a)(16) of title 11, United States Code,

4 is amended—

5 (1) by striking ‘‘dwelling’’ the first place it ap6 pears;

7 (2) by striking ‘‘ownership or’’ and inserting

8 ‘‘ownership,’’;

9 (3) by striking ‘‘housing’’ the first place it ap10 pears; and

11 (4) by striking ‘‘but only’’ and all that follows

12 through ‘‘such period,’’, and inserting ‘‘or a lot in a

13 homeowners association, for as long as the debtor or

14 the trustee has a legal, equitable, or possessory own15 ership interest in such unit, such corporation, or

16 such lot,’’.

17 SEC. 406. BANKRUPTCY FEES.

18 Section 1930 of title 28, United States Code, is

19 amended—

20 (1) in subsection (a), by striking ‘‘Notwith21 standing section 1915, the parties’’ and inserting

22 ‘‘Subject to subsection (f), the parties’’; and

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

24 ‘‘(f)(1) The Judicial Conference of the United States

25 shall prescribe procedures for waiving fees under this sub26 section.
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1 ‘‘(2) Under the procedures described in paragraph

2 (1), the district court or the bankruptcy court may waive

3 a filing fee described in paragraph (3) for a case com4 menced under chapter 7 of title 11 if the court determines

5 that an individual debtor is unable to pay that fee in in6 stallments.

7 ‘‘(3) A filing fee referred to in paragraph (2) is—

8 ‘‘(A) a filing fee under subsection (a)(1); or

9 ‘‘(B) any other fee prescribed by the Judicial

10 Conference of the United States under subsection

11 (b) that is payable to the clerk of the district court

12 or the clerk of the bankruptcy court upon the com13 mencement of a case under chapter 7 of title 11.

14 ‘‘(4) In addition to waiving a fee described in para15 graph (3) under paragraph (2), the district court or the

16 bankruptcy court may waive any other fee prescribed

17 under subsection (b) or (c) if the court determines that

18 the individual is unable to pay that fee in installments.’’.

19 SEC. 407. APPLICABILITY.

20 The amendments made by this title shall apply with

21 respect to cases commenced or appointments made under

22 any Federal or State law after the date of enactment of

23 this Act.
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1 TITLE V—ANCILLARY AND

2 OTHER CROSS-BORDER CASES

3 SEC. 501. AMENDMENT TO ADD CHAPTER 6 TO TITLE 11,

4 UNITED STATES CODE.

5 (a) IN GENERAL.—Title 11, United States Code, is

6 amended by inserting after chapter 5 the following:

7 ‘‘CHAPTER 6—ANCILLARY AND OTHER

8 CROSS-BORDER CASES

‘‘Sec.

‘‘601. Purpose and scope of application.

‘‘SUBCHAPTER I—GENERAL PROVISIONS

‘‘602. Definitions.

‘‘603. International obligations of the United States.

‘‘604. Commencement of ancillary case.

‘‘605. Authorization to act in a foreign country.

‘‘606. Public policy exception.

‘‘607. Additional assistance.

‘‘608. Interpretation.

‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND

CREDITORS TO THE COURT

‘‘609. Right of direct access.

‘‘610. Limited jurisdiction.

‘‘611. Commencement of case under section 301 or 303.

‘‘612. Participation of a foreign representative in a case under this title.

‘‘613. Access of foreign creditors to a case under this title.

‘‘614. Notification to foreign creditors concerning a case under this title.

‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING

AND RELIEF

‘‘615. Application for recognition of a foreign proceeding.

‘‘616. Presumptions concerning recognition.

‘‘617. Order recognizing a foreign proceeding.

‘‘618. Subsequent information.

‘‘619. Relief that may be granted upon petition for recognition of a foreign proceeding.

‘‘620. Effects of recognition of a foreign main proceeding.

‘‘621. Relief that may be granted upon recognition of a foreign proceeding.

‘‘622. Protection of creditors and other interested persons.

‘‘623. Actions to avoid acts detrimental to creditors.

‘‘624. Intervention by a foreign representative.
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‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND

FOREIGN REPRESENTATIVES

‘‘625. Cooperation and direct communication between the court and foreign

courts or foreign representatives.

‘‘626. Cooperation and direct communication between the trustee and foreign

courts or foreign representatives.

‘‘627. Forms of cooperation.

‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

‘‘628. Commencement of a case under this title after recognition of a foreign

main proceeding.

‘‘629. Coordination of a case under this title and a foreign proceeding.

‘‘630. Coordination of more than 1 foreign proceeding.

‘‘631. Presumption of insolvency based on recognition of a foreign main proceeding.

‘‘632. Rule of payment in concurrent proceedings.

1 ‘‘§ 601. 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) United States courts, United States

8 trustees, trustees, examiners, debtors, and debt9 ors 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
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1 creditors, and other interested entities, including the

2 debtor;

3 ‘‘(4) protection and maximization of the value

4 of the debtor’s assets; and

5 ‘‘(5) facilitation of the rescue of financially

6 troubled businesses, thereby protecting investment

7 and preserving employment.

8 ‘‘(b) This chapter applies if—

9 ‘‘(1) assistance is sought in the United States

10 by a foreign court or a foreign representative in con11 nection with a foreign proceeding;

12 ‘‘(2) assistance is sought in a foreign country in

13 connection with a case under this title;

14 ‘‘(3) a foreign proceeding and a case under this

15 title with respect to the same debtor are taking place

16 concurrently; or

17 ‘‘(4) creditors or other interested persons in a

18 foreign country have an interest in requesting the

19 commencement of, or participating in, a case or pro20 ceeding under this title.

21 ‘‘(c) This chapter does not apply to—

22 ‘‘(1) a proceeding concerning an entity identi23 fied by exclusion in subsection 109(b); or

24 ‘‘(2) an individual, or to an individual and such

25 individual’s spouse, who have debts within the limits
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1 specified in section 109(e) and who are citizens of

2 the United States or aliens lawfully admitted for

3 permanent residence in the United States.

4 ‘‘SUBCHAPTER I—GENERAL PROVISIONS

5 ‘‘§ 602. Definitions

6 ‘‘For purposes of this chapter, the term—

7 ‘‘(1) ‘debtor’ means an entity that is the subject

8 of a foreign proceeding;

9 ‘‘(2) ‘establishment’ means any place of oper10 ations where the debtor carries out a nontransitory

11 economic activity;

12 ‘‘(3) ‘foreign court’ means a judicial or other

13 authority competent to control or supervise a foreign

14 proceeding;

15 ‘‘(4) ‘foreign main proceeding’ means a foreign

16 proceeding taking place in the country where the

17 debtor has the center of its main interests;

18 ‘‘(5) ‘foreign nonmain proceeding’ means a for19 eign proceeding, other than a foreign main pro20 ceeding, taking place in a country where the debtor

21 has an establishment;

22 ‘‘(6) ‘trustee’ includes a trustee, a debtor in

23 possession in a case under any chapter of this title,

24 or a debtor under chapter 9 or 13 of this title; and
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1 ‘‘(7) ‘within the territorial jurisdiction of the

2 United States’ when used with reference to property

3 of a debtor refers to tangible property located within

4 the territory of the United States and intangible

5 property deemed to be located within that territory,

6 including any property that may properly be seized

7 or garnished by an action in a Federal or State

8 court in the United States.

9 ‘‘§ 603. International obligations of the United States

10 ‘‘To the extent that this chapter conflicts with an ob11 ligation of the United States arising out of any treaty or

12 other form of agreement to which it is a party with 1 or

13 more other countries, the requirements of the treaty or

14 agreement prevail.

15 ‘‘§ 604. Commencement of ancillary case

16 ‘‘A case under this chapter is commenced by the filing

17 of a petition for recognition of a foreign proceeding under

18 section 615.

19 ‘‘§ 605. Authorization to act in a foreign country

20 ‘‘A trustee or another entity designated by the court,

21 may be authorized by the court to act in a foreign country

22 on behalf of an estate created under section 541. An entity

23 authorized to act under this section may act in any way

24 permitted by the applicable foreign law.
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1 ‘‘§ 606. Public policy exception

2 ‘‘Nothing in this chapter prevents the court from re3 fusing to take an action governed by this chapter if the

4 action would be manifestly contrary to the public policy

5 of the United States.

6 ‘‘§ 607. Additional assistance

7 ‘‘(a) Nothing in this chapter limits the power of the

8 court, upon recognition of a foreign proceeding, to provide

9 additional assistance to a foreign representative under this

10 title or under other laws of the United States.

11 ‘‘(b) In determining whether to provide additional as12 sistance under this title or under other laws of the United

13 States, the court shall consider whether such additional

14 assistance, consistent with the principles of comity, will

15 reasonably assure—

16 ‘‘(1) just treatment of all holders of claims

17 against or interests in the debtor’s property;

18 ‘‘(2) protection of claim holders in the United

19 States against prejudice and inconvenience in the

20 processing of claims in such foreign proceeding;

21 ‘‘(3) prevention of preferential or fraudulent

22 dispositions of property of the debtor;

23 ‘‘(4) distribution of proceeds of the debtor’s

24 property substantially in accordance with the order

25 prescribed by this title; and
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1 ‘‘(5) if appropriate, the provision of an oppor2 tunity for a fresh start for the individual that such

3 foreign proceeding concerns.

4 ‘‘§ 608. Interpretation

5 ‘‘In interpreting this chapter, the court shall consider

6 its international origin, and the need to promote an appli7 cation of this chapter that is consistent with the applica8 tion of similar statutes adopted by foreign jurisdictions.

9 ‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP10 RESENTATIVES AND CREDITORS TO THE

11 COURT

12 ‘‘§ 609. Right of direct access

13 ‘‘(a) A foreign representative is entitled to commence

14 a case under section 604 by filing a petition for recogni15 tion under section 615, and upon recognition, to apply di16 rectly to other Federal and State courts for appropriate

17 relief in those courts.

18 ‘‘(b) Upon recognition, and subject to section 610,

19 a foreign representative shall have the capacity to sue and

20 be sued.

21 ‘‘(c) Recognition under this chapter is prerequisite to

22 the granting of comity or cooperation to a foreign rep23 resentative in any Federal or State court in the United

24 States. Any request for comity or cooperation by a foreign

25 representative in any court shall be accompanied by a
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1 sworn statement setting forth whether recognition under

2 section 615 has been sought and the status of any such

3 petition.

4 ‘‘(d) Upon denial of recognition under this chapter,

5 the court may issue appropriate orders necessary to pre6 vent an attempt to obtain comity or cooperation from

7 courts in the United States without such recognition.

8 ‘‘§ 610. Limited jurisdiction

9 ‘‘The sole fact that a foreign representative files a

10 petition under sections 604 and 615 does not subject the

11 foreign representative to the jurisdiction of any court in

12 the United States for any other purpose.

13 ‘‘§ 611. Commencement of case under section 301 or

14 303

15 ‘‘(a) Upon filing a petition for recognition, a foreign

16 representative may commence—

17 ‘‘(1) an involuntary case under section 303; or

18 ‘‘(2) a voluntary case under section 301 or 302,

19 if the foreign proceeding is a foreign main pro20 ceeding.

21 ‘‘(b) The petition commencing a case under sub22 section (a) must be accompanied by a statement describ23 ing the petition for recognition and its current status. The

24 court where the petition for recognition has been filed

25 must be advised of the foreign representative’s intent to
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1 commence a case under subsection (a) prior to such com2 mencement.

3 ‘‘(c) A case under subsection (a) shall be dismissed

4 unless recognition is granted.

5 ‘‘§ 612. Participation of a foreign representative in a

6 case under this title

7 ‘‘Upon recognition of a foreign proceeding, the for8 eign representative in that proceeding is entitled to par9 ticipate as a party in interest in a case regarding the debt10 or under this title.

11 ‘‘§ 613. Access of foreign creditors to a case under

12 this title

13 ‘‘(a) Foreign creditors have the same rights regarding

14 the commencement of, and participation in, a case under

15 this title as domestic creditors.

16 ‘‘(b)(1) Subsection (a) does not change or codify law

17 in effect on the date of enactment of this chapter as to

18 the priority of claims under section 507 or 726, except

19 that the claim of a foreign creditor under section 507 or

20 726 shall not be given a lower priority than that of general

21 unsecured claims without priority solely because the holder

22 of such claim is a foreign creditor.

23 ‘‘(2)(A) Subsection (a) and paragraph (1) do not

24 change or codify law in effect on the date of enactment

25 of this chapter as to the allowability of foreign revenue
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1 claims or other foreign public law claims in a proceeding

2 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 ‘‘§ 614. 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) The 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 letters rogatory or other similar for22 mality is required.

23 ‘‘(c) When a notification of commencement of a case

24 is to be given to foreign creditors, the notification shall—
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1 ‘‘(1) indicate the time period for filing proofs of

2 claim and specify the place for their filing;

3 ‘‘(2) indicate whether secured creditors need to

4 file their proofs of claim; and

5 ‘‘(3) contain any other information required to

6 be included in such a notification to creditors pursu7 ant to this title and the orders of the court.

8 ‘‘(d) Any rule of procedure or order of the court as

9 to notice or the filing of a claim shall provide such addi10 tional time to creditors with foreign addresses as is rea11 sonable under the circumstances.

12 ‘‘SUBCHAPTER III—RECOGNITION OF A

13 FOREIGN PROCEEDING AND RELIEF

14 ‘‘§ 615. Application for recognition of a foreign pro15 ceeding

16 ‘‘(a) A foreign representative applies to the court for

17 recognition of the 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 the 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 the 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 the foreign pro7 ceeding and of the appointment of the foreign rep8 resentative.

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) must be translated into English.

15 The court may require a translation into English of addi16 tional documents.

17 ‘‘§ 616. Presumptions concerning recognition

18 ‘‘(a) If the decision or certificate referred to in section

19 615(b) indicates that the foreign proceeding is a foreign

20 proceeding, within the meaning of section 101(23) and

21 that the person or body is a foreign representative, within

22 the meaning of section 101(24), the court is entitled to

23 so presume.

24 ‘‘(b) The court is entitled to presume that documents

25 submitted in support of the petition for recognition are
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1 authentic, whether or not the documents have been sub2 jected to legal processing under applicable law.

3 ‘‘(c) In the absence of evidence to the contrary, the

4 debtor’s registered office, or habitual residence in the case

5 of an individual, is presumed to be the center of the debt6 or’s main interests.

7 ‘‘§ 617. Order recognizing a foreign proceeding

8 ‘‘(a) Subject to section 606, an order recognizing a

9 foreign proceeding shall be entered if—

10 ‘‘(1) the foreign proceeding is a foreign main

11 proceeding or foreign nonmain proceeding within the

12 meaning of section 602 and is a foreign proceeding

13 within the meaning of section 101(23);

14 ‘‘(2) the person or body applying for recognition

15 is a foreign representative within the meaning of

16 section 101(24); and

17 ‘‘(3) the petition meets the requirements of sec18 tion 615.

19 ‘‘(b) The foreign proceeding shall be recognized—

20 ‘‘(1) as a foreign main proceeding if it is taking

21 place in the country where the debtor has the center

22 of its main interests; or

23 ‘‘(2) as a foreign nonmain proceeding if the

24 debtor has an establishment within the meaning of
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1 section 602 in the foreign country where the pro2 ceeding is pending.

3 ‘‘(c) A petition for recognition of a foreign proceeding

4 shall be decided upon at the earliest possible time. Entry

5 of an order recognizing a foreign proceeding shall con6 stitute recognition under this chapter.

7 ‘‘(d) The provisions of this subchapter do not prevent

8 modification or termination of recognition if it is shown

9 that the grounds for granting it were fully or partially

10 lacking or have ceased to exist, but in considering such

11 action the court shall give due weight to possible prejudice

12 to parties that have relied upon the granting of recogni13 tion. The case under this chapter may be closed in the

14 manner prescribed for a case under section 350.

15 ‘‘§ 618. Subsequent information

16 ‘‘After the petition for recognition of the foreign pro17 ceeding is filed, the foreign representative shall file with

18 the court promptly a notice of change of status

19 concerning—

20 ‘‘(1) any substantial change in the status of the

21 foreign proceeding or the status of the foreign rep22 resentative’s appointment; and

23 ‘‘(2) any other foreign proceeding regarding the

24 debtor that becomes known to the foreign represent25 ative.
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1 ‘‘§ 619. Relief that may be granted upon petition for

2 recognition of a foreign proceeding

3 ‘‘(a) Beginning on the date on which a petition for

4 recognition is filed and ending on the date on which the

5 petition is decided upon, the court may, at the request of

6 the foreign representative, if relief is urgently needed to

7 protect the assets of the debtor or the interests of the

8 creditors, grant relief of a provisional nature, 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, including an examiner, designated

15 by the court, including an examiner, in order to pro16 tect and preserve the value of assets that, by their

17 nature or because of other circumstances, are perish18 able, susceptible to devaluation, or otherwise in jeop19 ardy; and

20 ‘‘(3) any relief referred to in paragraph (3),

21 (4), or (7) of section 621(a).

22 ‘‘(b) Unless extended under section 621(a)(6), the re23 lief granted under this section terminates when the peti24 tion for recognition is decided upon.
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1 ‘‘(c) It is a ground for denial of relief under this sec2 tion that such relief would interfere with the administra3 tion of a foreign main proceeding.

4 ‘‘(d) The court may not enjoin a police or regulatory

5 act of a governmental unit, including a criminal action or

6 proceeding, under this section.

7 ‘‘(e) The standards, procedures, and limitations ap8 plicable to an injunction shall apply to relief under this

9 section.

10 ‘‘§ 620. Effects of recognition of a foreign main pro11 ceeding

12 ‘‘(a)(1) Upon recognition of a foreign proceeding that

13 is a foreign main proceeding—

14 ‘‘(A) section 362 applies with respect to the

15 debtor and that property of the debtor that is within

16 the territorial jurisdiction of the United States; and

17 ‘‘(B) a transfer, an encumbrance, or any other

18 disposition of an interest of the debtor in property

19 within the territorial jurisdiction of the United

20 States is restrained as and to the extent that is pro21 vided for property of an estate under sections 363,

22 549, and 552.

23 ‘‘(2) Unless the court orders otherwise, the foreign

24 representative may operate the debtor’s business and may
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1 exercise the powers of a trustee under section 549, subject

2 to sections 363 and 552.

3 ‘‘(b) The scope, and the modification or termination,

4 of the stay and restraints referred to in subsection (a) are

5 subject to the exceptions and limitations provided in sub6 sections (b), (c), and (d) of section 362, subsections (b)

7 and (c) of section 363, and sections 552, 555 through 557,

8 559, and 560.

9 ‘‘(c) Subsection (a) does not affect the right to com10 mence individual actions or proceedings in a foreign coun11 try to the extent necessary to preserve a claim against the

12 debtor.

13 ‘‘(d) 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 ‘‘§ 621. Relief that may be granted upon recognition

18 of a foreign proceeding

19 ‘‘(a) Upon recognition of a foreign proceeding, wheth20 er main or nonmain, if necessary to effectuate the purpose

21 of this chapter and to protect the assets of the debtor or

22 the interests of the creditors, the court may, at the request

23 of the foreign representative, grant any appropriate relief,

24 including—
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1 ‘‘(1) staying the commencement or continuation

2 of individual actions or individual proceedings con3 cerning the debtor’s assets, rights, obligations, or li4 abilities to the extent the actions or proceedings

5 have not been stayed under section 620(a);

6 ‘‘(2) staying execution against the debtor’s as7 sets to the extent the execution has not been stayed

8 under section 620(a);

9 ‘‘(3) suspending the right to transfer, encum10 ber, or otherwise dispose of any assets of the debtor

11 to the extent that right has not been suspended

12 under section 620(a);

13 ‘‘(4) providing for the examination of witnesses,

14 the taking of evidence, or the delivery of information

15 concerning the debtor’s assets, affairs, rights, obliga16 tions, or liabilities;

17 ‘‘(5) entrusting the administration or realiza18 tion of all or part of the debtor’s assets within the

19 territorial jurisdiction of the United States to the

20 foreign representative or another person, including

21 an examiner, designated by the court;

22 ‘‘(6) extending relief granted under section

23 619(a); and

24 ‘‘(7) granting any additional relief that may be

25 available to a trustee, except for relief available
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1 under sections 522, 544, 545, 547, 548, 550, and

2 724(a).

3 ‘‘(b) Upon recognition of a foreign proceeding, wheth4 er main or nonmain, the court may, at the request of the

5 foreign representative, entrust the distribution of all or

6 part of the debtor’s assets located in the United States

7 to the foreign representative or another person, including

8 an examiner, designated by the court, if the court is satis9 fied that the interests of creditors in the United States

10 are sufficiently protected.

11 ‘‘(c) In granting relief under this section to a rep12 resentative of a foreign nonmain proceeding, the court

13 must be satisfied that the relief relates to assets that,

14 under the laws of the United States, should be adminis15 tered in the foreign nonmain proceeding or concerns infor16 mation required in that proceeding.

17 ‘‘(d) The court may not enjoin a police or regulatory

18 act of a governmental unit, including a criminal action or

19 proceeding, under this section.

20 ‘‘§ 622. Protection of creditors and other interested

21 persons

22 ‘‘(a) The court may grant relief under section 619

23 or 621, or may modify or terminate relief under subsection

24 (c), only if the court finds that the interests of the credi-
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1 tors and other interested entities, including the debtor, are

2 sufficiently protected.

3 ‘‘(b) The court may subject relief granted under sec4 tion 619 or 621 to conditions that the court considers to

5 be appropriate.

6 ‘‘(c) The court may, at the request of the foreign rep7 resentative or an entity affected by relief granted under

8 section 619 or 621, or at its own motion, modify or termi9 nate the relief.

10 ‘‘§ 623. Actions to avoid acts detrimental to creditors

11 ‘‘(a) Upon recognition of a foreign proceeding, the

12 foreign representative has standing in a case concerning

13 the debtor pending under another chapter of this title to

14 initiate actions under sections 522, 544, 545, 547, 548,

15 550, and 724(a).

16 ‘‘(b) In any case in which the foreign proceeding is

17 a foreign nonmain proceeding, the court must be satisfied

18 that an action under subsection (a) relates to assets that,

19 under United States law, should be administered in the

20 foreign nonmain proceeding.

21 ‘‘§ 624. Intervention by a foreign representative

22 ‘‘Upon recognition of a foreign proceeding, the for23 eign representative may intervene in any proceedings in

24 a Federal or State court in the United States in which

25 the debtor is a party.
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1 ‘‘SUBCHAPTER IV—COOPERATION WITH FOR2 EIGN COURTS AND FOREIGN REPRESENTA3 TIVES

4 ‘‘§ 625. Cooperation and direct communication be5 tween the court and foreign courts or for6 eign representatives

7 ‘‘(a) In all matters included within section 601, the

8 court shall cooperate to the maximum extent possible with

9 foreign courts or foreign representatives, either directly or

10 through the trustee.

11 ‘‘(b) The court is entitled to communicate directly

12 with, or to request information or assistance directly from,

13 foreign courts or foreign representatives, subject to the

14 rights of parties in interest to notice and participation.

15 ‘‘§ 626. Cooperation and direct communication be16 tween the trustee and foreign courts or

17 foreign representatives

18 ‘‘(a) In all matters included within section 601, the

19 trustee or other person, including an examiner, designated

20 by the court, shall, subject to the supervision of the court,

21 cooperate to the maximum extent possible with foreign

22 courts or foreign representatives.

23 ‘‘(b) The trustee or other person, including an exam24 iner, designated by the court is entitled, subject to the su-
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1 pervision of the court, to communicate directly with for2 eign courts or foreign representatives.

3 ‘‘(c) Section 1104(d) shall apply to the appointment

4 of an examiner under this chapter. Any such examiner

5 shall comply with the qualifications requirements imposed

6 on a trustee under section 322(a).

7 ‘‘§ 627. Forms of cooperation

8 ‘‘Cooperation referred to in sections 625 and 626

9 may be implemented by any appropriate means,

10 including—

11 ‘‘(1) appointment of a person or body, including

12 an examiner, to act at the direction of the court;

13 ‘‘(2) communication of information by any

14 means considered appropriate by the court;

15 ‘‘(3) coordination of the administration and su16 pervision of the debtor’s assets and affairs;

17 ‘‘(4) approval or implementation of agreements

18 concerning the coordination of proceedings; and

19 ‘‘(5) coordination of concurrent proceedings re20 garding the same debtor.

21 ‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS

22 ‘‘§ 628. Commencement of a case under this title after

23 recognition of a foreign main proceeding

24 ‘‘After recognition of a foreign main proceeding, a

25 case under another chapter of this title may be commenced
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1 only if the debtor has assets in the United States. The

2 effects of such case shall be restricted to the assets of the

3 debtor that are within the territorial jurisdiction of the

4 United States and, to the extent necessary to implement

5 cooperation and coordination under sections 625, 626, and

6 627, to other assets of the debtor that are within the juris7 diction of the court under sections 541(a) and 1334(e) of

8 title 28, to the extent that such other assets are not sub9 ject to the jurisdiction and control of a foreign proceeding

10 that has been recognized under this chapter.

11 ‘‘§ 629. Coordination of a case under this title and a

12 foreign proceeding

13 ‘‘In any case in which a foreign proceeding and a case

14 under another chapter of this title are taking place concur15 rently regarding the same debtor, the court shall seek co16 operation and coordination under sections 625, 626, and

17 627, and the following shall apply:

18 ‘‘(1) If the case in the United States is taking

19 place at the time the petition for recognition of the

20 foreign proceeding is filed—

21 ‘‘(A) any relief granted under section 619

22 or 621 shall be consistent with the relief grant23 ed in the case in the United States; and
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1 ‘‘(B) even if the foreign proceeding is rec2 ognized as a foreign main proceeding, section

3 620 does not apply.

4 ‘‘(2) If a case in the United States under this

5 title commences after recognition, or after the filing

6 of the petition for recognition, of the foreign

7 proceeding—

8 ‘‘(A) any relief in effect under section 619

9 or 621 shall be reviewed by the court and shall

10 be modified or terminated if inconsistent with

11 the case in the United States; and

12 ‘‘(B) if the foreign proceeding is a foreign

13 main proceeding, the stay and suspension re14 ferred to in section 620(a) shall be modified or

15 terminated if inconsistent with the relief grant16 ed in the case in the United States.

17 ‘‘(3) In granting, extending, or modifying relief

18 granted to a representative of a foreign nonmain

19 proceeding, the court shall be satisfied that the relief

20 relates to assets that, under the law of the United

21 States, should be administered in the foreign

22 nonmain proceeding or concerns information re23 quired in that proceeding.
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1 ‘‘(4) In achieving cooperation and coordination

2 under sections 628 and 629, the court may grant

3 any of the relief authorized under section 305.

4 ‘‘§ 630. Coordination of more than 1 foreign pro5 ceeding

6 ‘‘In matters referred to in section 601, with respect

7 to more than 1 foreign proceeding regarding the debtor,

8 the court shall seek cooperation and coordination under

9 sections 625, 626, and 627, and the following shall apply:

10 ‘‘(1) Any relief granted under section 619 or

11 621 to a representative of a foreign nonmain pro12 ceeding after recognition of a foreign main pro13 ceeding shall be consistent with the foreign main

14 proceeding.

15 ‘‘(2) If a foreign main proceeding is recognized

16 after recognition, or after the filing of a petition for

17 recognition, of a foreign nonmain proceeding, any

18 relief in effect under section 619 or 621 shall be re19 viewed by the court and shall be modified or termi20 nated if inconsistent with the foreign main pro21 ceeding.

22 ‘‘(3) If, after recognition of a foreign nonmain

23 proceeding, another foreign nonmain proceeding is

24 recognized, the court shall grant, modify, or termi-
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1 nate relief for the purpose of facilitating coordina2 tion of the proceedings.

3 ‘‘§ 631. Presumption of insolvency based on recogni4 tion of a foreign main proceeding

5 ‘‘In the absence of evidence to the contrary, recogni6 tion of a foreign main proceeding is for the purpose of

7 commencing a proceeding under section 303, proof that

8 the debtor is generally not paying its debts as such debts

9 become due.

10 ‘‘§ 632. Rule of payment in concurrent proceedings

11 ‘‘Without prejudice to secured claims or rights in

12 rem, a creditor who has received payment with respect to

13 its claim in a foreign proceeding pursuant to a law relating

14 to insolvency may not receive a payment for the same

15 claim in a case under any other chapter of this title re16 garding the debtor, so long as the payment to other credi17 tors of the same class is proportionately less than the pay18 ment the creditor has already received.’’.

19 (b) CLERICAL AMENDMENT.—The table of chapters

20 for title 11, United States Code, is amended by inserting

21 after the item relating to chapter 5 the following:

‘‘6. Ancillary and Other Cross-Border Cases .......................... 601’’.

22 SEC. 502. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11,

23 UNITED STATES CODE.

24 (a) APPLICABILITY OF CHAPTERS.—Section 103 of

25 title 11, United States Code, is amended—
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1 (1) in subsection (a), by inserting before the pe2 riod the following: ‘‘, and this chapter, sections 307,

3 304, 555 through 557, 559, and 560 apply in a case

4 under chapter 6’’; and

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

6 ‘‘(j) Chapter 6 applies only in a case under such

7 chapter, except that section 605 applies to trustees and

8 to any other entity, including an examiner, designated by

9 the court under chapter 7, 11, or 12, to debtors in posses10 sion under chapter 11 or 12, and to debtors under chap11 ters 9 and 13 who are authorized to act under section

12 605.’’.

13 (b) DEFINITIONS.—Paragraphs (23) and (24) of sec14 tion 101 of title 11, United States Code, are amended to

15 read as follows:

16 ‘‘(23) ‘foreign proceeding’ means a collective ju17 dicial or administrative proceeding in a foreign state,

18 including an interim proceeding, pursuant to a law

19 relating to insolvency in which proceeding the assets

20 and affairs of the debtor are subject to control or

21 supervision by a foreign court, for the purpose of re22 organization or liquidation;

23 ‘‘(24) ‘foreign representative’ means a person

24 or body, including a person or body appointed on an

25 interim basis, authorized in a foreign proceeding to
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1 administer the reorganization or the liquidation of

2 the debtor’s assets or affairs or to act as a rep3 resentative of the foreign proceeding;’’.

4 (c) AMENDMENTS TO TITLE 28, UNITED STATES

5 CODE.—

6 (1) PROCEDURES.—Section 157(b)(2) of title

7 28, United States Code, is amended—

8 (A) in subparagraph (N), by striking

9 ‘‘and’’ at the end;

10 (B) in subparagraph (O), by striking the

11 period at the end and inserting ‘‘; and’’; and

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

13 ‘‘(P) recognition of foreign proceedings and

14 other matters under chapter 6 of title 11.’’.

15 (2) BANKRUPTCY CASES AND PROCEEDINGS.—

16 Section 1334(c)(1) of title 28, United States Code,

17 is amended by striking ‘‘Nothing in’’ and inserting

18 ‘‘Except with respect to a case under chapter 6 of

19 title 11, nothing in’’.

20 (3) DUTIES OF TRUSTEES.—Section 586(a)(3)

21 of title 28, United States Code, is amended by in22 serting ‘‘6,’’ after ‘‘chapter’’.
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1 TITLE VI—MISCELLANEOUS

2 SEC. 601. EXECUTORY CONTRACTS AND UNEXPIRED

3 LEASES.

4 Section 365(d) of title 11, United States Code, is

5 amended by striking paragraph (4) and inserting the fol6 lowing:

7 ‘‘(4)(A) Subject to subparagraph (B), in any case

8 under any chapter of this title, an unexpired lease of non9 residential real property under which the debtor is the les10 see shall be deemed rejected and the trustee shall imme11 diately surrender that nonresidential real property to the

12 lessor if the trustee does not assume or reject the unex13 pired lease by the earlier of—

14 ‘‘(i) the date that is 120 days after the date of

15 the order for relief; or

16 ‘‘(ii) the date of the entry of an order con17 firming a plan.

18 ‘‘(B) The court may extend the period determined

19 under subparagraph (A) only upon a motion of the les20 sor.’’.

21 SEC. 602. EXPEDITED APPEALS OF BANKRUPTCY CASES TO

22 COURTS OF APPEALS.

23 (a) IN GENERAL.—Section 158 of title 28, United

24 States Code, is amended—
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1 (1) by redesignating subsection (d) as sub2 section (e);

3 (2) by inserting after subsection (c) the fol4 lowing:

5 ‘‘(d)(1) Any final judgment, decision, order, or decree

6 of a bankruptcy judge entered for a case in accordance

7 with section 157 may be appealed by any party in such

8 case to the appropriate court of appeals if—

9 ‘‘(A) an appeal from such judgment, decision,

10 order, or decree is first filed with the appropriate

11 district court of the United States; and

12 ‘‘(B) the decision on the appeal described under

13 subparagraph (A) is not filed by a district court

14 judge within 30 days after the date such appeal is

15 filed with the district court.

16 ‘‘(2) On the date that an appeal is filed with a court

17 of appeals under paragraph (1), the chief judge for such

18 court of appeals shall issue an order to the clerk for the

19 district court from which the appeal is filed. Such order

20 shall direct the clerk to enter the final judgment, decision,

21 order, or decree of the bankruptcy judge as the final judg22 ment, decision, order, or decree of the district court.’’; and

23 (3) in subsection (e), (as redesignated by para24 graph (1) of this section) by striking ‘‘subsections
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1 (a) and (b)’’ and inserting ‘‘subsections (a), (b), and

2 (d)’’.

3 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

4 (1) Section 305(c) of title 11, United States

5 Code, is amended by striking ‘‘section 158(d)’’ and

6 inserting ‘‘section 158(e)’’.

7 (2) Section 1334(d) of title 28, United States

8 Code, is amended by striking ‘‘section 158(d)’’ and

9 inserting ‘‘section 158(e)’’.

10 (3) Section 1452(b) of title 28, United States

11 Code, is amended by striking ‘‘section 158(d)’’ and

12 inserting ‘‘section 158(e)’’.

13 SEC. 603. CREDITORS AND EQUITY SECURITY HOLDERS

14 COMMITTEES.

15 Section 1102(a)(2) of title 11, United States Code,

16 is amended by inserting before the first sentence the fol17 lowing: ‘‘On its own motion or on request of a party in

18 interest, and after notice and hearing, the court may order

19 a change in the membership of a committee appointed

20 under this subsection, if the court determines that the

21 change is necessary to ensure adequate representation of

22 creditors or equity security holders.’’.

23 SEC. 604. REPEAL OF SUNSET PROVISION.

24 Section 302 of the Bankruptcy Judges, United States

25 Trustees, and Family Farmer Bankruptcy Act of 1986
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1 (28 U.S.C. 581 note) is amended by striking subsection

2 (f).

3 SEC. 605. CASES ANCILLARY TO FOREIGN PROCEEDINGS.

4 Section 304 of title 11, United States Code, as

5 amended by section 410 of this Act, is amended by adding

6 at the end the following:

7 ‘‘(e)(1) In this subsection—

8 ‘‘(A) the term ‘domestic insurance company’

9 means a domestic insurance company, as that term

10 is used in section 109(b)(2);

11 ‘‘(B) the term ‘foreign insurance company’

12 means a foreign insurance company, as that term is

13 used in section 109(b)(3);

14 ‘‘(C) the term ‘United States claimant’ means

15 a beneficiary of any deposit referred to in paragraph

16 (2)(A) or any multibeneficiary trust referred to in

17 subparagraph (B) or (C) of paragraph (2);

18 ‘‘(D) the term ‘United States creditor’ means,

19 with respect to a foreign insurance company—

20 ‘‘(i) a United States claimant; or

21 ‘‘(ii) any business entity that operates in

22 the United States and that is a creditor; and

23 ‘‘(E) the term ‘United States policyholder’

24 means a holder of an insurance policy issued in the

25 United States.
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1 ‘‘(2) Notwithstanding subsections (b) and (c), the

2 court may not grant relief under subsection (b) to a for3 eign insurance company that is not engaged in the busi4 ness of insurance or reinsurance in the United States with

5 respect to any claim made by a United States creditor

6 against—

7 ‘‘(A) a deposit required by an applicable State

8 insurance law;

9 ‘‘(B) a multibeneficiary trust required by an ap10 plicable State insurance law to protect United States

11 policyholders or claimants against a foreign insur12 ance company; or

13 ‘‘(C) a multibeneficiary trust authorized under

14 an applicable State insurance law to allow a domes15 tic insurance company that cedes reinsurance to the

16 debtor to reflect the reinsurance as an asset or de17 duction from liability in the ceding insurer’s finan18 cial statements.’’.

19 SEC. 606. LIMITATION.

20 Section 546(c)(1)(B) of title 11, United States Code,

21 is amended by striking ‘‘20’’ and inserting ‘‘45’’.
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1 SEC. 607. AMENDMENT TO SECTION 546 OF TITLE 11,

2 UNITED STATES CODE.

3 Section 546 of title 11, United States Code, as

4 amended by section 401 of this Act, is amended by adding

5 at the end the following:

6 ‘‘(i) Notwithstanding paragraphs (2) and (3) of

7 section 545, the trustee may not avoid a

8 warehouseman’s lien for storage, transportation, or

9 other costs incidental to the storage and handling of

10 goods, as provided by an applicable State law that

11 is similar to section 7–209 of the Uniform Commer12 cial Code.’’.

13 SEC. 608. AMENDMENT TO SECTION 330(a) OF TITLE 11,

14 UNITED STATES CODE.

15 Section 330(a)(3)(A) of title 11, United States Code,

16 is amended—

17 (1) by inserting ‘‘In determining the amount of

18 reasonable compensation to be awarded a trustee,

19 the court shall treat such compensation as a com20 mission based on the results achieved.’’ after

21 ‘‘(3)(A)’’; and

22 (2) by inserting ‘‘to an examiner, chapter 11

23 trustee, or professional person’’ after ‘‘awarded’’.
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1 TITLE VII—TECHNICAL

2 CORRECTIONS

3 SEC. 701. ADJUSTMENT OF DOLLAR AMOUNTS.

4 Section 104 of title 11, United States Code, is

5 amended by inserting ‘‘522(f)(3), 707(b)(5),’’ after

6 ‘‘522(d),’’ each place it appears.

7 SEC. 702. EXTENSION OF TIME.

8 Section 108(c)(2) of title 11, United States Code, is

9 amended by striking ‘‘922’’ and all that follows through

10 ‘‘or’’, and inserting ‘‘922, 1201, or’’.

11 SEC. 703. WHO MAY BE A DEBTOR.

12 Section 109(b)(2) of title 11, United States Code, is

13 amended by striking ‘‘subsection (c) or (d) of’’.

14 SEC. 704. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

15 FRAUDULENTLY PREPARE BANKRUPTCY PE16 TITIONS.

17 Section 110(j)(3) of title 11, United States Code, is

18 amended by striking ‘‘attorney’s’’ and inserting ‘‘attor19 neys’ ’’.

20 SEC. 705. LIMITATION ON COMPENSATION OF PROFES21 SIONAL PERSONS.

22 Section 328(a) of title 11, United States Code, is

23 amended by inserting ‘‘on a fixed or percentage fee basis,’’

24 after ‘‘hourly basis,’’.
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1 SEC. 706. SPECIAL TAX PROVISIONS.

2 Section 346(g)(1)(C) of title 11, United States Code,

3 is amended by striking ‘‘, except’’ and all that follows

4 through ‘‘1986’’.

5 SEC. 707. EFFECT OF CONVERSION.

6 Section 348(f)(2) of title 11, United States Code, is

7 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

8 first place it appears.

9 SEC. 708. AUTOMATIC STAY.

10 Section 362(b) of title 11, United States Code, as

11 amended by section 401 of this Act, is amended—

12 (1) in paragraph (20), by striking ‘‘or’’ at the

13 end;

14 (2) in paragraph (21), by striking the period at

15 the end and inserting a semicolon; and

16 (3) by inserting after paragraph (21) the fol17 lowing:

18 ‘‘(22) under subsection (a) of this section of

19 any transfer that is not avoidable under section 544

20 and that is not avoidable under section 549;

21 ‘‘(23) under subsection (a)(3) of this section, of

22 the continuation of any eviction, unlawful detainer

23 action, or similar proceeding by a lessor against a

24 debtor involving residential real property in which

25 the debtor resides as a tenant under a rental agree26 ment and the debtor has not paid rent to the lessor
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1 under the terms of the lease agreement or applicable

2 State law after the commencement and during the

3 course of the case;

4 ‘‘(24) under subsection (a)(3) of this section, of

5 the commencement or continuation of any eviction,

6 unlawful detainer action, or similar proceeding by a

7 lessor against a debtor involving residential real

8 property in which the debtor resides as a tenant

9 under a rental agreement that has terminated pur10 suant to the lease agreement or applicable State law;

11 ‘‘(25) under subsection (a)(3), of any eviction,

12 unlawful detainer action, or similar proceeding, if

13 the debtor has previously filed within the preceding

14 year and failed to pay post-petition rent during the

15 course of that case; or

16 ‘‘(26) under subsection (a)(3), of eviction ac17 tions based on endangerment to property or person

18 or the use of illegal drugs.’’.

19 SEC. 709. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

20 Section 503(b)(4) of title 11, United States Code, is

21 amended by inserting ‘‘subparagraph (A), (B), (C), (D),

22 or (E) of’’ before ‘‘paragraph (3)’’.

23 SEC. 710. PRIORITIES.

24 Section 507(a) of title 11, United States Code, as

25 amended by section 323 of this Act, is amended—
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1 (1) in paragraph (3)(B), by striking the semi2 colon at the end and inserting a period; and

3 (2) in paragraph (7), by inserting ‘‘unsecured’’

4 after ‘‘allowed’’.

5 SEC. 711. EXEMPTIONS.

6 Section 522 of title 11, United States Code, as

7 amended by section 320 of this Act, is amended—

8 (1) in subsection (f)(1)(A)(ii)(II)—

9 (A) by striking ‘‘includes a liability des10 ignated as’’ and inserting ‘‘is for a liability that

11 is designated as, and is actually in the nature

12 of,’’; and

13 (B) by striking ‘‘, unless’’ and all that fol14 lows through ‘‘support’’; and

15 (2) in subsection (g)(2), by striking ‘‘subsection

16 (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.

17 SEC. 712. EXCEPTIONS TO DISCHARGE.

18 Section 523 of title 11, United States Code, as

19 amended by section 315 of this Act, is amended—

20 (1) in subsection (a)(3), by striking ‘‘or (6)’’

21 each place it appears and inserting ‘‘(6), or (15)’’;

22 (2) as amended by section 304(e) of Public Law

23 103–394 (108 Stat. 4133), in paragraph (15), by

24 transferring such paragraph so as to insert it after

25 paragraph (14A) of subsection (a);
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1 (3) in subsection (a)(9), by inserting

2 ‘‘, watercraft, or aircraft’’ after ‘‘motor vehicle’’;

3 (4) in subsection (a)(15), as so redesignated by

4 paragraph (2) of this subsection, by inserting ‘‘to a

5 spouse, former spouse, or child of the debtor and’’

6 after ‘‘(15)’’;

7 (5) in subsection (a)(17)—

8 (A) by striking ‘‘by a court’’ and inserting

9 ‘‘on a prisoner by any court’’;

10 (B) by striking ‘‘section 1915 (b) or (f)’’

11 and inserting ‘‘subsection (b) or (f)(2) of sec12 tion 1915’’; and

13 (C) by inserting ‘‘(or a similar non-Federal

14 law)’’ after ‘‘title 28’’ each place it appears; and

15 (6) in subsection (e), by striking ‘‘a insured’’

16 and inserting ‘‘an insured’’.

17 SEC. 713. EFFECT OF DISCHARGE.

18 Section 524(a)(3) of title 11, United States Code, is

19 amended by striking ‘‘section 523’’ and all that follows

20 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

21 or 1328(a)(1) of this title, or that’’.

22 SEC. 714. PROTECTION AGAINST DISCRIMINATORY TREAT23 MENT.

24 Section 525(c) of title 11, United States Code, is

25 amended—
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1 (1) in paragraph (1), by inserting ‘‘student’’ be2 fore ‘‘grant’’ the second place it appears; and

3 (2) in paragraph (2), by striking ‘‘the program

4 operated under part B, D, or E of’’ and inserting

5 ‘‘any program operated under’’.

6 SEC. 715. PROPERTY OF THE ESTATE.

7 Section 541(b)(4)(B)(ii) of title 11, United States

8 Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.

9 SEC. 716. PREFERENCES.

10 Section 547 of title 11, United States Code, is

11 amended—

12 (1) in subsection (b), by striking ‘‘subsection

13 (c)’’ and inserting ‘‘subsections (c) and (h)’’; and

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

15 ‘‘(h) If the trustee avoids under subsection (b) a secu16 rity interest given between 90 days and 1 year before the

17 date of the filing of the petition, by the debtor to an entity

18 that is not an insider for the benefit of a creditor that

19 is an insider, such security interest shall be considered to

20 be avoided under this section only with respect to the cred21 itor that is an insider.’’.

22 SEC. 717. POSTPETITION TRANSACTIONS.

23 Section 549(c) of title 11, United States Code, is

24 amended—
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1 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

2 of’’;

3 (2) by striking ‘‘such property’’ and inserting

4 ‘‘such real property’’; and

5 (3) by striking ‘‘the interest’’ and inserting

6 ‘‘such interest’’.

7 SEC. 718. TECHNICAL AMENDMENT.

8 Section 552(b)(1) of title 11, United States Code, is

9 amended by striking ‘‘product’’ each place it appears and

10 inserting ‘‘products’’.

11 SEC. 719. DISPOSITION OF PROPERTY OF THE ESTATE.

12 Section 726(b) of title 11, United States Code, is

13 amended by striking ‘‘1009,’’.

14 SEC. 720. GENERAL PROVISIONS.

15 Section 901(a) of title 11, United States Code, as

16 amended by section 401 of this Act, is amended by insert17 ing ‘‘1123(d),’’ after ‘‘1123(b),’’.

18 SEC. 721. APPOINTMENT OF ELECTED TRUSTEE.

19 Section 1104(b) of title 11, United States Code, is

20 amended—

21 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

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

23 ‘‘(2)(A) If an eligible, disinterested trustee is elected

24 at a meeting of creditors under paragraph (1), the United
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1 States trustee shall file a report certifying that election.

2 Upon the filing of a report under the preceding sentence—

3 ‘‘(i) the trustee elected under paragraph (1)

4 shall be considered to have been selected and ap5 pointed for purposes of this section; and

6 ‘‘(ii) the service of any trustee appointed under

7 subsection (d) shall terminate.

8 ‘‘(B) In the case of any dispute arising out of an elec9 tion under subparagraph (A), the court shall resolve the

10 dispute.’’.

11 SEC. 722. ABANDONMENT OF RAILROAD LINE.

12 Section 1170(e)(1) of title 11, United States Code,

13 is amended by striking ‘‘section 11347’’ and inserting

14 ‘‘section 11326(a)’’.

15 SEC. 723. CONTENTS OF PLAN.

16 Section 1172(c)(1) of title 11, United States Code,

17 is amended by striking ‘‘section 11347’’ and inserting

18 ‘‘section 11326(a)’’.

19 SEC. 724. DISCHARGE UNDER CHAPTER 12.

20 Subsections (a) and (c) of section 1228 of title 11,

21 United States Code, are amended by striking

22 ‘‘1222(b)(10)’’ each place it appears and inserting

23 ‘‘1222(b)(9)’’.
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1 SEC. 725. EXTENSIONS.

2 Section 302(d)(3) of the Bankruptcy, Judges, United

3 States Trustees, and Family Farmer Bankruptcy Act of

4 1986 (28 U.S.C. 581 note) is amended—

5 (1) in subparagraph (A), in the matter fol6 lowing clause (ii), by striking ‘‘or October 1, 2002,

7 whichever occurs first’’; and

8 (2) in subparagraph (F)—

9 (A) in clause (i)—

10 (i) in subclause (II), by striking ‘‘or

11 October 1, 2002, whichever occurs first’’;

12 and

13 (ii) in the matter following subclause

14 (II), by striking ‘‘October 1, 2003, or’’;

15 and

16 (B) in clause (ii), in the matter following

17 subclause (II)—

18 (i) by striking ‘‘before October 1,

19 2003, or’’; and

20 (ii) by striking ‘‘, whichever occurs

21 first’’.

22 SEC. 726. BANKRUPTCY CASES AND PROCEEDINGS.

23 Section 1334(d) of title 28, United States Code, is

24 amended—

25 (1) by striking ‘‘made under this subsection’’

26 and inserting ‘‘made under subsection (c)’’; and
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1 (2) by striking ‘‘This subsection’’ and inserting

2 ‘‘Subsection (c) and this subsection’’.

3 SEC. 727. KNOWING DISREGARD OF BANKRUPTCY LAW OR

4 RULE.

5 Section 156(a) of title 18, United States Code, is

6 amended—

7 (1) in the first undesignated paragraph—

8 (A) by inserting ‘‘(1) the term’’ before

9 ‘‘ ‘bankruptcy’’; and

10 (B) by striking the period at the end and

11 inserting ‘‘; and’’; and

12 (2) in the second undesignated paragraph—

13 (A) by inserting ‘‘(2) the term’’ before

14 ‘‘ ‘document’’; and

15 (B) by striking ‘‘this title’’ and inserting

16 ‘‘title 11’’.

17 SEC. 728. ROLLING STOCK EQUIPMENT.

18 (a) IN GENERAL.—Section 1168 of title 11, United

19 States Code, is amended to read as follows:

20 ‘‘§ 1168. Rolling stock equipment

21 ‘‘(a)(1) The right of a secured party with a security

22 interest in or of a lessor or conditional vendor of equip23 ment described in paragraph (2) to take possession of such

24 equipment in compliance with an equipment security

25 agreement, lease, or conditional sale contract, and to en-
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1 force any of its other rights or remedies under such secu2 rity agreement, lease, or conditional sale contract, to sell,

3 lease, or otherwise retain or dispose of such equipment,

4 is not limited or otherwise affected by any other provision

5 of this title or by any power of the court, except that the

6 right to take possession and enforce those other rights and

7 remedies shall be subject to section 362, if—

8 ‘‘(A) before the date that is 60 days after the

9 date of commencement of a case under this chapter,

10 the trustee, subject to the court’s approval, agrees to

11 perform all obligations of the debtor under such se12 curity agreement, lease, or conditional sale contract;

13 and

14 ‘‘(B) any default, other than a default of a kind

15 described in section 365(b)(2), under such security

16 agreement, lease, or conditional sale contract that—

17 ‘‘(i) occurs before the date of commence18 ment of the case and is an event of default

19 therewith is cured before the expiration of such

20 60-day period;

21 ‘‘(ii) occurs or becomes an event of default

22 after the date of commencement of the case and

23 before the expiration of such 60-day period is

24 cured before the later of—
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1 ‘‘(I) the date that is 30 days after the

2 date of the default or event of the default;

3 or

4 ‘‘(II) the expiration of such 60-day

5 period; and

6 ‘‘(iii) occurs on or after the expiration of

7 such 60-day period is cured in accordance with

8 the terms of such security agreement, lease, or

9 conditional sale contract, if cure is permitted

10 under that agreement, lease, or conditional sale

11 contract.

12 ‘‘(2) The equipment described in this paragraph—

13 ‘‘(A) is rolling stock equipment or accessories

14 used on rolling stock equipment, including super15 structures or racks, that is subject to a security in16 terest granted by, leased to, or conditionally sold to

17 a debtor; and

18 ‘‘(B) includes all records and documents relat19 ing to such equipment that are required, under the

20 terms of the security agreement, lease, or conditional

21 sale contract, to be surrendered or returned by the

22 debtor in connection with the surrender or return of

23 such equipment.
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1 ‘‘(3) Paragraph (1) applies to a secured party, lessor,

2 or conditional vendor acting in its own behalf or acting

3 as trustee or otherwise in behalf of another party.

4 ‘‘(b) The trustee and the secured party, lessor, or

5 conditional vendor whose right to take possession is pro6 tected under subsection (a) may agree, subject to the

7 court’s approval, to extend the 60-day period specified in

8 subsection (a)(1).

9 ‘‘(c)(1) In any case under this chapter, the trustee

10 shall immediately surrender and return to a secured party,

11 lessor, or conditional vendor, described in subsection

12 (a)(1), equipment described in subsection (a)(2), if at any

13 time after the date of commencement of the case under

14 this chapter such secured party, lessor, or conditional ven15 dor is entitled under subsection (a)(1) to take possession

16 of such equipment and makes a written demand for such

17 possession of the trustee.

18 ‘‘(2) At such time as the trustee is required under

19 paragraph (1) to surrender and return equipment de20 scribed in subsection (a)(2), any lease of such equipment,

21 and any security agreement or conditional sale contract

22 relating to such equipment, if such security agreement or

23 conditional sale contract is an executory contract, shall be

24 deemed rejected.
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1 ‘‘(d) With respect to equipment first placed in service

2 on or before October 22, 1994, for purposes of this

3 section—

4 ‘‘(1) the term ‘lease’ includes any written agree5 ment with respect to which the lessor and the debt6 or, as lessee, have expressed in the agreement or in

7 a substantially contemporaneous writing that the

8 agreement is to be treated as a lease for Federal in9 come tax purposes; and

10 ‘‘(2) the term ‘security interest’ means a pur11 chase-money equipment security interest.

12 ‘‘(e) With respect to equipment first placed in service

13 after October 22, 1994, for purposes of this section, the

14 term ‘rolling stock equipment’ includes rolling stock equip15 ment that is substantially rebuilt and accessories used on

16 such equipment.’’.

17 (b) AIRCRAFT EQUIPMENT AND VESSELS.—Section

18 1110 of title 11, United States Code, is amended to read

19 as follows:

20 ‘‘§ 1110. Aircraft equipment and vessels

21 ‘‘(a)(1) Except as provided in paragraph (2) and sub22 ject to subsection (b), the right of a secured party with

23 a security interest in equipment described in paragraph

24 (3), or of a lessor or conditional vendor of such equipment,

25 to take possession of such equipment in compliance with
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1 a security agreement, lease, or conditional sale contract,

2 and to enforce any of its other rights or remedies, under

3 such security agreement, lease, or conditional sale con4 tract, to sell, lease, or otherwise retain or dispose of such

5 equipment, is not limited or otherwise affected by any

6 other provision of this title or by any power of the court.

7 ‘‘(2) The right to take possession and to enforce the

8 other rights and remedies described in paragraph (1) shall

9 be subject to section 362 if—

10 ‘‘(A) before the date that is 60 days after the

11 date of the order for relief under this chapter, the

12 trustee, subject to the approval of the court, agrees

13 to perform all obligations of the debtor under such

14 security agreement, lease, or conditional sale con15 tract; and

16 ‘‘(B) any default, other than a default of a kind

17 specified in section 365(b)(2), under such security

18 agreement, lease, or conditional sale contract that

19 occurs—

20 ‘‘(i) before the date of the order is cured

21 before the expiration of such 60-day period;

22 ‘‘(ii) after the date of the order and before

23 the expiration of such 60-day period is cured

24 before the later of—
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1 ‘‘(I) the date that is 30 days after the

2 date of the default; or

3 ‘‘(II) the expiration of such 60-day

4 period; and

5 ‘‘(iii) on or after the expiration of such 60-

6 day period is cured in compliance with the

7 terms of such security agreement, lease, or con8 ditional sale contract, if a cure is permitted

9 under that agreement, lease, or contract.

10 ‘‘(3) The equipment described in this paragraph—

11 ‘‘(A) is—

12 ‘‘(i) an aircraft, aircraft engine, propeller,

13 appliance, or spare part (as defined in section

14 40102 of title 49) that is subject to a security

15 interest granted by, leased to, or conditionally

16 sold to a debtor that, at the time such trans17 action is entered into, holds an air carrier oper18 ating certificate issued under chapter 447 of

19 title 49 for aircraft capable of carrying 10 or

20 more individuals or 6,000 pounds or more of

21 cargo; or

22 ‘‘(ii) a documented vessel (as defined in

23 section 30101(1) of title 46) that is subject to

24 a security interest granted by, leased to, or con25 ditionally sold to a debtor that is a water car-
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1 rier that, at the time such transaction is en2 tered into, holds a certificate of public conven3 ience and necessity or permit issued by the De4 partment of Transportation; and

5 ‘‘(B) includes all records and documents relat6 ing to such equipment that are required, under the

7 terms of the security agreement, lease, or conditional

8 sale contract, to be surrendered or returned by the

9 debtor in connection with the surrender or return of

10 such equipment.

11 ‘‘(4) Paragraph (1) applies to a secured party, lessor,

12 or conditional vendor acting in its own behalf or acting

13 as trustee or otherwise in behalf of another party.

14 ‘‘(b) The trustee and the secured party, lessor, or

15 conditional vendor whose right to take possession is pro16 tected under subsection (a) may agree, subject to the ap17 proval of the court, to extend the 60-day period specified

18 in subsection (a)(1).

19 ‘‘(c)(1) In any case under this chapter, the trustee

20 shall immediately surrender and return to a secured party,

21 lessor, or conditional vendor, described in subsection

22 (a)(1), equipment described in subsection (a)(3), if at any

23 time after the date of the order for relief under this chap24 ter such secured party, lessor, or conditional vendor is en25 titled under subsection (a)(1) to take possession of such
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1 equipment and makes a written demand for such posses2 sion to the trustee.

3 ‘‘(2) At such time as the trustee is required under

4 paragraph (1) to surrender and return equipment de5 scribed in subsection (a)(3), any lease of such equipment,

6 and any security agreement or conditional sale contract

7 relating to such equipment, if such security agreement or

8 conditional sale contract is an executory contract, shall be

9 deemed rejected.

10 ‘‘(d) With respect to equipment first placed in service

11 on or before October 22, 1994, for purposes of this

12 section—

13 ‘‘(1) the term ‘lease’ includes any written agree14 ment with respect to which the lessor and the debt15 or, as lessee, have expressed in the agreement or in

16 a substantially contemporaneous writing that the

17 agreement is to be treated as a lease for Federal in18 come tax purposes; and

19 ‘‘(2) the term ‘security interest’ means a pur20 chase-money equipment security interest.’’.

21 SEC. 729. CURBING ABUSIVE FILINGS.

22 (a) IN GENERAL.—Section 362(d) of title 11, United

23 States Code, is amended—

24 (1) in paragraph (2), by striking ‘‘or’’ at the

25 end;
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1 (2) in paragraph (3), by striking the period at

2 the end and inserting ‘‘; or’’; and

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

4 ‘‘(4) with respect to a stay of an act against

5 real property under subsection (a), by a creditor

6 whose claim is secured by an interest in such real

7 estate, if the court finds that the filing of the bank8 ruptcy petition was part of a scheme to delay,

9 hinder, and defraud creditors that involved either—

10 ‘‘(A) transfer of all or part ownership of,

11 or other interest in, the real property without

12 the consent of the secured creditor or court ap13 proval; or

14 ‘‘(B) multiple bankruptcy filings affecting

15 the real property.

16 If recorded in compliance with applicable State laws gov17 erning notices of interests or liens in real property, an

18 order entered pursuant to this subsection shall be binding

19 in any other case under this title purporting to affect the

20 real property filed not later than 2 years after that record21 ing, except that a debtor in a subsequent case may move

22 for relief from such order based upon changed cir23 cumstances or for good cause shown, after notice and a

24 hearing.’’.
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1 (b) AUTOMATIC STAY.—Section 362(b) of title 11,

2 United States Code, as amended by section 708 of this

3 Act, is amended—

4 (1) in paragraph (25), by striking ‘‘or’’ at the

5 end;

6 (2) in paragraph (26), by striking the period at

7 the end and inserting a semicolon; and

8 (3) by inserting after paragraph (26) the fol9 lowing:

10 ‘‘(27) under subsection (a) of this section, of

11 any act to enforce any lien against or security inter12 est in real property following the entry of an order

13 under section 362(d)(4) as to that property in any

14 prior bankruptcy case for a period of 2 years after

15 entry of such an order, except that, the debtor in a

16 subsequent case of the debtor, may move the court

17 for relief from such order based upon changed cir18 cumstances or for other good cause shown, after no19 tice and a hearing; or

20 ‘‘(28) under subsection (a) of this section, of

21 any act to enforce any lien against or security inter22 est in real property—

23 ‘‘(A) if the debtor is ineligible under sec24 tion 109(g) to be a debtor in a bankruptcy case;

25 or
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1 ‘‘(B) if the bankruptcy case was filed in

2 violation of a bankruptcy court order in a prior

3 bankruptcy case prohibiting the debtor from

4 being a debtor in another bankruptcy case.’’.

5 SEC. 730. STUDY OF OPERATION OF TITLE 11 OF THE

6 UNITED STATES CODE WITH RESPECT TO

7 SMALL 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 Administrative Office of 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 of the United States Code and that cause

19 certain small businesses to successfully com20 plete cases 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. 731. TRANSFERS MADE BY NONPROFIT CHARITABLE

5 CORPORATIONS.

6 (a) SALE OF PROPERTY OF ESTATE.—Section 363(d)

7 of title 11, United States Code, is amended—

8 (1) by striking ‘‘only’’ and all that follows

9 through the end of the subsection and inserting

10 ‘‘only—

11 ‘‘(1) in accordance with applicable nonbank12 ruptcy law that governs the transfer of property by

13 a corporation or trust that is not a moneyed, busi14 ness, or commercial corporation or trust; and

15 ‘‘(2) to the extent not inconsistent with any re16 lief granted under subsection (c), (d), (e), or (f) of

17 section 362.’’.

18 (b) CONFIRMATION OF PLAN FOR REORGANIZA19 TION.—Section 1129(a) of title 11, United States Code,

20 is amended by adding at the end the following:

21 ‘‘(14) All transfers of property of the plan shall

22 be made in accordance with any applicable provi23 sions of nonbankruptcy law that govern the transfer

24 of property by a corporation or trust that is not a
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1 moneyed, business, or commercial corporation or

2 trust.’’.

3 (c) TRANSFER OF PROPERTY.—Section 541 of title

4 11, United States Code, as amended by section 403 of this

5 Act, is amended by adding at the end the following:

6 ‘‘(e) Notwithstanding any other provision of this title,

7 property that is held by a debtor that is a corporation de8 scribed in section 501(c)(3) of the Internal Revenue Code

9 of 1986 and exempt from tax under section 501(a) of such

10 Code may be transferred to an entity that is not such a

11 corporation, but only under the same conditions as would

12 apply if the debtor had not filed a case under this title.’’.

13 (d) APPLICABILITY.—The amendments made by this

14 section shall apply to a case pending under title 11, United

15 States Code, on the date of enactment of this Act, except

16 that the court shall not confirm a plan under chapter 11

17 of this title without considering whether this section would

18 substantially affect the rights of a party in interest who

19 first acquired rights with respect to the debtor after the

20 date of the petition. The parties who may appear and be

21 heard in a proceeding under this section include the attor22 ney general of the State in which the debtor is incor23 porated, was formed, or does business.
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1 SEC. 732. EFFECTIVE DATE; APPLICATION OF AMEND2 MENTS.

3 (a) EFFECTIVE DATE.—Except as provided in sub4 section (b), this title and the amendments made by this

5 title shall take effect on the date of enactment of this Act.

6 (b) APPLICATION OF AMENDMENTS.—The amend7 ments made by this title shall apply only with respect to

8 cases commenced under title 11, United States Code, on

9 or after the date of enactment of this Act.

Æ