Calendar No. 394

105TH CONGRESS

2D SESSION S. 1301

A BILL

To amend title 11, United States Code, to provide

other purposes.for consumer bankruptcy protection, and for

JUNE 4 (legislative day, JUNE 2), 1998

Reported with an amendment
II

Calendar No. 394

105TH CONGRESS

2D SESSION S. 1301

To amend title 11, United States Code, to provide for consumer bankruptcy

protection, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 21, 1997

Mr. GRASSLEY (for himself and Mr. DURBIN) introduced the following bill;

which was read twice and referred to the Committee on the Judiciary

JUNE 4 (legislative day, JUNE 2), 1998

Reported by Mr. HATCH, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend title 11, United States Code, to provide for

consumer bankruptcy protection, 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.

4 This Act may be cited as the ‘‘Consumer Bankruptcy

5 Reform Act of 1997’’.
2

•S 1301 RS

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 striking ‘‘13’’.

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)’’; and

16 (B) in paragraph (1), as redesignated by

17 subparagraph (A) of this paragraph—

18 (i) in the first sentence—

19 (I) by striking ‘‘, but not at the

20 request or suggestion of a party in in21 terest,’’;

22 (II) by inserting ‘‘, or, with the

23 debtor’s consent, convert such a case

24 to a case under chapter 13 of this

25 title,’’ after ‘‘consumer debts’’; and
3

•S 1301 RS

1 (III) by striking ‘‘substantial

2 abuse’’ and inserting ‘‘abuse’’; and

3 (ii) by striking the last sentence and

4 inserting the following:

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

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

7 this chapter, the court shall consider whether—

8 ‘‘(A) under section 1325(b)(1) of this title, on

9 the basis of the current income of the debtor, the

10 debtor could pay an amount greater than or equal

11 to 20 percent of unsecured claims that are not con12 sidered to be priority claims (as determined under

13 subchapter I of chapter 5 of this title);

14 ‘‘(B) the debtor filed a petition for the relief in

15 bad faith; and

16 ‘‘(C)(i) the debtor made good-faith efforts, be17 fore the filing of the petition, to negotiate an alter18 native repayment schedule or to use alternative

19 methods of dispute resolution; and

20 ‘‘(ii) if the debtor made efforts described in

21 clause (i), the creditors of that debtor unreasonably

22 refused to engage in the alternative methods of dis23 pute resolution or to negotiate an alternative repay24 ment schedule.
4

•S 1301 RS

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

2 586(a)(1) of title 28 brings a motion for dismissal or con3 version under this subsection and the court grants that

4 motion, the court shall order the counsel for the debtor,

5 if the debtor is represented by counsel, to reimburse the

6 trustee for all reasonable costs in prosecuting the motion,

7 including reasonable attorneys’ fees.

8 ‘‘(B) If the court finds that the attorney for the debt9 or violated Rule 9011, at a minimum, the court shall

10 order—

11 ‘‘(i) the assessment of an appropriate civil pen12 alty against the counsel for the debtor; and

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

14 panel trustee or the United States trustee.

15 ‘‘(C) In the case of a petition referred to in subpara16 graph (B), the signature of an attorney shall constitute

17 a certificate that the attorney has—

18 ‘‘(i) performed a reasonable investigation into

19 the circumstances that gave rise to the petition; and

20 ‘‘(ii) determined that the petition—

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

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

23 good faith argument for the extension, modi24 fication, or reversal of existing law and does not
5

•S 1301 RS

1 constitute an abuse under paragraph (1) of this

2 subsection.

3 ‘‘(4) The court shall award a debtor all reasonable

4 costs in contesting a motion brought by a party in interest

5 under this subsection (including reasonable attorneys’ fees

6 and actual damages in an amount not less than $5,000)

7 if—

8 ‘‘(A) the court does not grant the motion; and

9 ‘‘(B) the court finds that—

10 ‘‘(i) the position of the party that brought

11 the motion was not substantially justified; or

12 ‘‘(ii) the party brought the motion solely

13 for the purpose of coercing a debtor into

14 waiving a right guaranteed to the debtor under

15 this title.’’.

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

17 at the beginning of chapter 7 of title 11, United States

18 Code, is amended by striking the item relating to section

19 707 and inserting the following:

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

20 TITLE II—ENHANCED PROCE21 DURAL PROTECTIONS FOR

22 CONSUMERS

23 SEC. 201. ALLOWANCE OF CLAIMS OR INTERESTS.

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

25 amended by adding at the end the following:
6

•S 1301 RS

1 ‘‘(k)(1) The court shall award the debtor reasonable

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

3 a debtor, the court—

4 ‘‘(A) disallows the claim; or

5 ‘‘(B) reduces the claim by an amount greater

6 than 5 percent of the amount of the initial claim

7 filed by a party in interest.

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

9 under this section is not substantially justified, the court

10 shall, in addition to awarding a debtor reasonable attor11 neys’ fees and costs under paragraph (1), award additional

12 punitive damages in the amount of $5,000.’’.

13 SEC. 202. EXCEPTIONS TO DISCHARGE.

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

15 amended to read as follows:

16 ‘‘(d)(1) If a creditor requests a determination of

17 dischargeability of a consumer debt under this section and

18 that debt is discharged, the court shall award the debtor

19 reasonable attorneys’ fees and costs.

20 ‘‘(2) In addition to making an award to a debtor

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

22 of a creditor in a proceeding covered under this section

23 is not substantially justified, the court shall, in addition

24 to making an award of reasonable attorneys’ fees and
7

•S 1301 RS

1 costs under paragraph (1), award an amount equal to the

2 greater of—

3 ‘‘(A)(i) the amount of actual damages; multi4 plied by

5 ‘‘(ii) 3; or

6 ‘‘(B) $5,000.’’.

7 SEC. 203. EFFECT OF DISCHARGE.

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

9 amended by adding at the end the following:

10 ‘‘(i) The failure of a creditor to credit payments re11 ceived under a plan confirmed under this title (including

12 a plan of reorganization confirmed under chapter 11 of

13 this title) in the manner required by the plan (including

14 crediting the amounts required under the plan) shall con15 stitute a violation of an injunction under subsection (a)(2).

16 ‘‘(j)(1) Except as provided in paragraph (2), a credi17 tor may not charge a debtor, or the account of a debtor,

18 for attorneys’ fees or costs for work performed in connec19 tion with a case brought under this title.

20 ‘‘(2) Any charge made by a creditor in violation of

21 this subsection shall constitute a violation of an injunction

22 under subsection (a)(2).

23 ‘‘(k) An individual who is injured by the failure of

24 a creditor to comply with the requirements for a reaffirma25 tion agreement under subsections (c) and (d), or by any
8

•S 1301 RS

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

2 shall be entitled to recover—

3 ‘‘(1) the greater of—

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

5 multiplied by

6 ‘‘(ii) 3; or

7 ‘‘(B) $5,000; and

8 ‘‘(2) costs and attorneys’ fees.’’.

9 SEC. 204. AUTOMATIC STAY.

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

11 amended to read as follows:

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

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

14 to recover—

15 ‘‘(A) the greater of—

16 ‘‘(i)(I) the amount of actual damages; mul17 tiplied by

18 ‘‘(II) 3; or

19 ‘‘(ii) $5,000; and

20 ‘‘(B) costs and attorneys’ fees.

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

22 and attorneys’ fees under paragraph (1), an individual de23 scribed in paragraph (1) may recover punitive damages

24 in appropriate circumstances.’’.
9

•S 1301 RS

1 SEC. 205. WHO MAY BE A DEBTOR.

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

3 amended by adding at the end the following:

4 ‘‘(F)(1) In any case in which a creditor files a motion

5 to deny relief to a debtor under this section and that mo6 tion is denied or withdrawn, the court shall award the

7 debtor reasonable attorneys’ fees and costs.

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

9 filing a motion under this section is not substantially justi10 fied, the court shall assess against the creditor for pay11 ment to the debtor a payment in an amount equal to the

12 greater of—

13 ‘‘(A)(i) the amount of actual damages; multi14 plied by

15 ‘‘(ii) 3; or

16 ‘‘(B) $5,000.’’.

17 TITLE III—IMPROVED PROCE18 DURES FOR EFFICIENT AD19 MINISTRATION OF THE BANK20 RUPTCY SYSTEM

21 SEC. 301. NOTICE OF ALTERNATIVES.

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

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

24 inserting the following:

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

26 title by an individual whose debts are primarily consumer
10

•S 1301 RS

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

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

3 under subchapter 1 of chapter 5 of this title) a written

4 notice prescribed by the United States trustee for the dis5 trict in which the petition is filed pursuant to section 586

6 of title 28. The notice shall contain the following:

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

8 and 13 of this title and the general purpose, bene9 fits, and costs of proceeding under each of those

10 chapters.

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

12 available to that individual from an independent

13 nonprofit debt counseling service.

14 ‘‘(3)(A) The name, address, and telephone

15 number of each nonprofit debt counseling service

16 with an office located in the district in which the pe17 tition is filed, if any.

18 ‘‘(B) Any nonprofit debt counseling service de19 scribed in subparagraph (A) that has registered with

20 the clerk of the bankruptcy court on or before De21 cember 10 of the preceding year shall be included in

22 the list referred to in that clause, unless the chief

23 bankruptcy judge of the district involved, after giv24 ing notice to the debt counseling service and the

25 United States trustee and opportunity for a hearing,
11

•S 1301 RS

1 orders, for good cause, that a particular debt coun2 seling service shall not be so listed.’’; and

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

4 United States Code, is amended—

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

6 shall—’’;

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

8 following:

9 ‘‘(1) file—

10 ‘‘(A) a list of creditors; and

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

12 ‘‘(i) a schedule of assets and liabil13 ities;

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

15 current expenditures;

16 ‘‘(iii) a statement of the debtor’s fi17 nancial affairs and, if applicable, a certifi18 cate—

19 ‘‘(I) of an attorney whose name

20 is on the petition as the attorney for

21 the debtor or any bankruptcy petition

22 preparer signing the petition pursuant

23 to section 110(b)(1) of this title indi24 cating that such attorney or bank25 ruptcy petition preparer delivered to
12

•S 1301 RS

1 the debtor any notice required by sec2 tion 342(b) of this title; or

3 ‘‘(II) if no attorney for the debt4 or is indicated and no bankruptcy pe5 tition preparer signed the petition, of

6 the debtor that such notice was ob7 tained and read by the debtor;

8 ‘‘(iv) copies of any Federal tax re9 turns, including any schedules or attach10 ments, filed by the debtor for the 3-year

11 period preceding the order for relief;

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

13 other evidence of payment, if any, received

14 by the debtor from any employer of the

15 debtor in the period 60 days prior to the

16 filing of the petition;

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

18 projected monthly net income, itemized to

19 show how calculated;

20 ‘‘(vii) if applicable, any statement

21 under paragraphs (3) and (4) of section

22 109(h); and

23 ‘‘(viii) a statement disclosing any rea24 sonably anticipated increase in income or
13

•S 1301 RS

1 expenditures over the 12-month period fol2 lowing the date of filing;’’; and

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

4 ‘‘(b)(1) At any time, a creditor, in the case of an indi5 vidual under chapter 7 or 13, may file with the court no6 tice that the creditor requests the petition, schedules, and

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

8 the court shall make those documents available to the

9 creditor who requests those documents.

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

11 13, may file with the court notice that the creditor re12 quests the plan filed by the debtor in the case and the

13 court shall make that plan available to the creditor who

14 requests that plan.

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

16 or 13 shall file with the court—

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

18 all tax returns, including any schedules or attach19 ments, with respect to the period from the com20 mencement of the case until such time as the case

21 is closed;

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

23 all tax returns, including any schedules or attach24 ments, that were not filed with the taxing authority

25 when the schedules under subsection (a)(1) were
14

•S 1301 RS

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

2 the order for relief;

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

4 including schedules or attachments, described in

5 paragraph (1) or (2); and

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

7 subject to the penalties of perjury by the debtor of

8 the debtor’s income and expenditures in the preced9 ing tax year and monthly income, that shows how

10 the amounts are calculated—

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

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

13 tax year or 1 year after the order for relief, un14 less a plan has been confirmed; and

15 ‘‘(B) thereafter on or before the date that

16 is 45 days before each anniversary of the con17 firmation of the plan until the case is closed.

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

19 shall disclose—

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

21 debtor;

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

23 with the debtor for the support of any dependents of

24 the debtor; and
15

•S 1301 RS

1 ‘‘(C) any persons who contributed and the

2 amount contributed to the household in which the

3 debtor resides.

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

5 income and expenditures described in paragraph (1) shall

6 be available to the United States trustee, any bankruptcy

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

8 inspection and copying.’’.

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

10 States Code, is amended—

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

12 end;

13 (2) in paragraph (6) by striking the period at

14 the end and inserting ‘‘; and’’; and

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

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

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

18 change in the nonprofit debt counseling services reg19 istered with the bankruptcy court, prescribe and

20 make available on request the notice described in

21 section 342(b)(3) of title 11 for each district in22 cluded in the region.’’.
16

•S 1301 RS

1 SEC. 302. FAIR TREATMENT OF SECURED CREDITORS

2 UNDER CHAPTER 13.

3 Section 1325(a)(5)(B)(i) of title 11, United States

4 Code, is amended to read as follows:

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

6 such claim retain the lien securing such claim

7 until the debt that is the subject of the claim

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

9 and’’.

10 SEC. 303. DISCOURAGEMENT OF BAD FAITH REPEAT FIL11 INGS.

12 Section 362 of title 11, United States Code, is

13 amended—

14 (1) in subsection (c)—

15 (A) by inserting ‘‘(1)’’ before ‘‘Except as’’;

16 (B) by striking ‘‘(1) the stay’’ and insert17 ing ‘‘(A) the stay’’;

18 (C) by striking ‘‘(2) the stay’’ and insert19 ing ‘‘(B) the stay’’;

20 (D) by striking ‘‘(A) the time’’ and insert21 ing ‘‘(i) the time’’; and

22 (E) by striking ‘‘(B) the time’’ and insert23 ing ‘‘(ii) the time’’; and

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

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

26 (f), the stay under subsection (a) with respect to any ac-
17

•S 1301 RS

1 tion taken with respect to a debt or property securing such

2 debt or with respect to any lease shall terminate with re3 spect to the debtor on the 30th day after the filing of the

4 later case if—

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

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

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

8 than a case refiled under a chapter other than chap9 ter 7 after dismissal under section 707(b) of this

10 title) was pending during the preceding year but was

11 dismissed.

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

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

14 more creditors (subject to such conditions or limitations

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

16 hearing completed before the expiration of the 30-day pe17 riod described in paragraph (2) only if the party in inter18 est demonstrates that the filing of the later case is in good

19 faith with respect to the creditors to be stayed.

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

21 in good faith (except that such presumption may be rebut22 ted by clear and convincing evidence to the contrary)—

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

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

25 of chapters 7, 11, or 13 of this title in which
18

•S 1301 RS

1 the individual was a debtor was pending during

2 the 1-year period described in paragraph (1);

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

4 7, 11, or 13 of this title in which the individual

5 was a debtor was dismissed within the period

6 specified in paragraph (2) after—

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

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

9 file or amend the petition or other docu10 ments as required by this title; or

11 ‘‘(II) the debtor, without substantial

12 excuse, failed to perform the terms of a

13 plan that was confirmed by the court; or

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

15 with the dismissal of the next most previous

16 case under chapter 7, 11, or 13 there has not

17 been a substantial change in the financial or

18 personal affairs of the debtor;

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

20 is no other reason to conclude that the later

21 case will be concluded with a discharge; or

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

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

24 fully performed; and
19

•S 1301 RS

1 ‘‘(B) with respect to any creditor that com2 menced an action under subsection (d) in a previous

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

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

5 still pending or had been resolved by terminating,

6 conditioning, or limiting the stay with respect to ac7 tions of that creditor.

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

9 under subsection (a) with respect to real or personal prop10 erty of any kind, and the request is granted in whole or

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

12 order under this subsection, order that the relief so grant13 ed shall be in rem either—

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

15 year; or

16 ‘‘(ii) indefinitely.

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

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

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

20 the debtor.

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

22 (A) so provides, the stay shall, in addition to being inap23 plicable to the debtor involved, not apply with respect to

24 an entity under this title if—
20

•S 1301 RS

1 ‘‘(I) the entity had reason to know of the

2 order at the time that the entity obtained an in3 terest in the property affected; or

4 ‘‘(II) the entity was notified of the com5 mencement of the proceeding for relief from the

6 stay, and at the time of the notification, no case

7 in which the entity was a debtor was pending.

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

9 during the period beginning with the issuance of the order

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

11 is closed.’’.

12 SEC. 304. TIMELY FILING AND CONFIRMATION OF PLANS

13 UNDER CHAPTER 13.

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

15 United States Code, is amended to read as follows:

16 ‘‘§ 1321. Filing of plan

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

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

19 the court may extend such period if the need for an exten20 sion is attributable to circumstances for which the debtor

21 should not justly be held accountable.’’.

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

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

24 end the following: ‘‘That hearing shall be held not later
21

•S 1301 RS

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

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

3 SEC. 305. APPLICATION OF THE CODEBTOR STAY ONLY

4 WHEN THE STAY PROTECTS THE DEBTOR.

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

6 amended—

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

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

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

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

11 debtor did not receive the consideration for the claim held

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

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

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

15 the creditor proceeds against—

16 ‘‘(i) the individual that received that consider17 ation; or

18 ‘‘(ii) property not in the possession of the debt19 or that secures that claim.

20 ‘‘(B) In any case described in subparagraph (A), a

21 creditor may not proceed against an individual described

22 in subparagraph (A)(i) or property described in subpara23 graph (A)(ii), if the debtor who did not receive consider24 ation for the property that is the subject of the claim is
22

•S 1301 RS

1 able to demonstrate that the receipt of the property was

2 not part of a scheme to defraud or hinder any creditor.

3 ‘‘(3) Notwithstanding subsection (c), the stay pro4 vided by subsection (a) shall terminate as of the date of

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

6 of the debtor provides that the debtor’s interest in per7 sonal property subject to a lease with respect to which the

8 debtor is the lessee will be surrendered or abandoned or

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

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

11 SEC. 306. IMPROVED BANKRUPTCY STATISTICS.

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

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

14 following:

15 ‘‘§ 159. Bankruptcy statistics

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

17 regarding individual debtors with primarily consumer

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

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

20 Director of the Administrative Office of the United States

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

22 ‘‘(b) The Director shall—

23 ‘‘(1) compile the statistics referred to in sub24 section (a);
23

•S 1301 RS

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

2 and

3 ‘‘(3) not later than October 31, 1998, and an4 nually thereafter, prepare, and submit to Congress a

5 report concerning the information collected under

6 subsection (a) that contains an analysis of the infor7 mation.

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

9 shall—

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

11 title 11;

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

13 district; and

14 ‘‘(3) include information concerning—

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

16 the debtors described in subsection (a), and in

17 each category of assets and liabilities, as re18 ported in the schedules prescribed pursuant to

19 section 2075 of this title and filed by those

20 debtors;

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

22 projected monthly net income, and average in23 come and average expenses of those debtors as

24 reported on the schedules and statements that
24

•S 1301 RS

1 each such debtor files under sections 111, 521,

2 and 1322 of title 11;

3 ‘‘(C) the aggregate amount of debt dis4 charged in the reporting period, determined as

5 the difference between the total amount of debt

6 and obligations of a debtor reported on the

7 schedules and the amount of such debt reported

8 in categories which are predominantly non9 dischargeable;

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

11 the filing of the petition and the closing of the

12 case;

13 ‘‘(E) for the reporting period—

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

15 reaffirmation was filed; and

16 ‘‘(ii)(I) the total number of reaffirma17 tions filed;

18 ‘‘(II) of those cases in which a reaffir19 mation was filed, the number in which the

20 debtor was not represented by an attorney;

21 and

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

23 cases in which the reaffirmation was ap24 proved by the court;
25

•S 1301 RS

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

2 chapter 13 of title 11, for the reporting pe3 riod—

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

5 final order was entered determining the

6 value of property securing a claim in an

7 amount less than the amount of the claim;

8 and

9 ‘‘(II) the number of final orders deter10 mining the value of property securing a

11 claim issued;

12 ‘‘(ii) the number of cases dismissed

13 for failure to make payments under the

14 plan; and

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

16 the debtor filed another case within the 6

17 years previous to the filing; and

18 ‘‘(G) the extent of creditor misconduct and

19 any amount of punitive damages awarded by

20 the court for creditor misconduct.’’.

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

22 at the beginning of chapter 6 of title 28, United States

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

‘‘159. Bankruptcy statistics.’’.
26

•S 1301 RS

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

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

3 enactment of this Act.

4 SEC. 307. AUDIT PROCEDURES.

5 (a) AMENDMENT.—Section 586 of title 28, United

6 States Code, is amended—

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

8 301 of this Act, by striking paragraph (6) and in9 serting the following:

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

11 directs, including the results of audits performed

12 under subsection (f); and’’; and

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

14 ‘‘(f)(1)(A) The Attorney General shall establish pro15 cedures for the auditing of the accuracy and completeness

16 of petitions, schedules, and other information which the

17 debtor is required to provide under sections 521 and 1322

18 of title 11, and, if applicable, section 111 of title 11, in

19 individual cases filed under chapter 7 or 13 of such title.

20 ‘‘(B) The audits described in subparagraph (A) shall

21 be made in accordance with generally accepted auditing

22 standards and performed by independent certified public

23 accountants or independent licensed public accountants.

24 Those procedures shall—
27

•S 1301 RS

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

2 qualified persons to contract with the United States

3 trustee to perform those audits;

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

5 cases to be audited according to generally accepted

6 auditing standards, except that not less than 1 out

7 of every 50 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—

14 ‘‘(I) reporting the results of those audits

15 and any material misstatement of income, ex16 penditures, or assets of a debtor to the Attor17 ney General, the United States Attorney and

18 the court, as appropriate;

19 ‘‘(II) providing, not less frequently than

20 annually, public information concerning the ag21 gregate results of such audits including the per22 centage of cases, by district, in which a mate23 rial misstatement of income or expenditures is

24 reported; and
28

•S 1301 RS

1 ‘‘(III) fully funding those audits, including

2 procedures requiring each debtor with sufficient

3 available income or assets to contribute to the

4 payment for those audits, as an administrative

5 expense or otherwise.

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

7 authorized to contract with auditors to perform audits in

8 cases designated by the United States trustee according

9 to the procedures established under paragraph (1) of this

10 subsection.

11 ‘‘(3) According to procedures established under para12 graph (1), upon request of a duly appointed auditor, the

13 debtor shall cause the accounts, papers, documents, finan14 cial records, files and all other papers, things, or property

15 belonging to the debtor as the auditor requests and that

16 are reasonably necessary to facilitate the audit to be made

17 available for inspection and copying.

18 ‘‘(4)(A) The report of each audit conducted under

19 this subsection shall be filed with the court, the Attorney

20 General, and the United States Attorney, as required

21 under procedures established by the Attorney General

22 under paragraph (1).

23 ‘‘(B) If a material misstatement of income or expend24 itures or of assets is reported under subparagraph (A),
29

•S 1301 RS

1 a statement specifying that misstatement shall be filed

2 with the court and the United States trustee shall—

3 ‘‘(i) give notice thereof to the creditors in the

4 case; and

5 ‘‘(ii) in an appropriate case, in the opinion of

6 the United States trustee, that requires investigation

7 with respect to possible criminal violations, the

8 United States Attorney for the district.’’.

9 (b) EFFECTIVE DATE.—The amendments made by

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

11 enactment of this Act.

12 SEC. 308. CREDITOR REPRESENTATION AT FIRST MEETING

13 OF CREDITORS.

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

15 amended by inserting after the first sentence the follow16 ing: ‘‘Notwithstanding any local court rule, provision of

17 a State constitution, any other Federal or State law that

18 is not a bankruptcy law, or other requirement that rep19 resentation at the meeting of creditors under subsection

20 (a) be by an attorney, a creditor holding a consumer debt

21 or any representative of the creditor (which may include

22 an entity or an employee of an entity and may be a rep23 resentative for more than one creditor) shall be permitted

24 to appear at and participate in the meeting of creditors

25 in a case under chapter 7 or 13, either alone or in conjunc-
30

•S 1301 RS

1 tion with an attorney for the creditor. Nothing in this sub2 section shall be construed to require any creditor to be

3 represented by an attorney at any meeting of creditors.’’.

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

5 13 CASES.

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

7 amended—

8 (1) in subsection (c)—

9 (A) by striking ‘‘, but the failure of such

10 notice to contain such information shall not in11 validate the legal effect of such notice’’; and

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

13 ‘‘(d)(1) If the credit agreement between the debtor

14 and the creditor or the last communication before the fil15 ing of the petition in a voluntary case from the creditor

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

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

18 debtor with respect to any debt held by the creditor

19 against the debtor, the debtor shall include that account

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

21 under this title.

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

23 the last communication before the filing of the petition,

24 an address at which the creditor wishes to receive cor25 respondence regarding the debtor’s account, any notice to
31

•S 1301 RS

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

2 title shall be given at such address.

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

4 shall include—

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

6 creditor after the commencement of the case;

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

8 under section 521(a)(2) of this title;

9 ‘‘(C) notice of the commencement of any pro10 ceeding in the case to which the creditor is a party;

11 and

12 ‘‘(D) any notice of a hearing under section

13 1324 of this title.

14 ‘‘(e)(1) At any time, a creditor, in a case of an indi15 vidual under chapter 7 or 13, may file with the court and

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

17 notify the creditor in that case.

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

19 the creditor notice, 5 days after receipt of the notice under

20 paragraph (1), that notice shall be given at that address.

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

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

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

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

25 by the court shall be to that address unless specific notice
32

•S 1301 RS

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

2 case.

3 ‘‘(g)(1) Notice given to a creditor other than as pro4 vided in this section shall not be effective notice until that

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

6 ‘‘(2) If the creditor has designated a person or de7 partment to be responsible for receiving notices concerning

8 bankruptcy cases and has established reasonable proce9 dures so that bankruptcy notices received by the creditor

10 will be delivered to that department or person, notice shall

11 not be brought to the attention of the creditor until that

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

13 SEC. 310. STOPPING ABUSIVE CONVERSIONS FROM CHAP14 TER 13.

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

16 amended—

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

18 the end;

19 (2) in subparagraph (B)—

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

21 with allowed secured claims’’ and inserting

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

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

24 allowed secured claims in cases under chapters

25 11 and 12’’; and
33

•S 1301 RS

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

2 and’’; and

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

4 ‘‘(C) with respect to cases converted from chap5 ter 13, the claim of any creditor holding security as

6 of the date of the petition shall continue to be se7 cured by that security unless the full amount of that

8 claim determined under applicable nonbankruptcy

9 law has been paid in full as of the date of conver10 sion, notwithstanding any valuation or determination

11 of the amount of an allowed secured claim made for

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

13 SEC. 311. PROMPT RELIEF FROM STAY IN INDIVIDUAL

14 CASES.

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

16 amended—

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

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

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

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

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

22 60 days after a request is made by a party in interest

23 under subsection (d), unless—
34

•S 1301 RS

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

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

3 the request; or

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

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

6 or

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

8 of time as the court finds is required for good

9 cause.’’.

10 SEC. 312. DISMISSAL FOR FAILURE TO FILE SCHEDULES

11 TIMELY OR PROVIDE REQUIRED INFORMA12 TION.

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

14 amended by section 102 of this Act, is further amended

15 by adding at the end the following:

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

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

18 case under chapter 7 or 13 fails to file all of the informa19 tion required under section 521(a)(1) of this title within

20 45 days after the filing of the petition commencing the

21 case, the case shall be automatically dismissed effective

22 on the 46th day after the filing of the petition.

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

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

25 an order dismissing the case. The court shall, if so re-
35

•S 1301 RS

1 quested, enter an order of dismissal not later than 5 days

2 after that request.

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

4 after the filing of the petition commencing a case de5 scribed in paragraph (1), the court may allow the debtor

6 an additional period of not to exceed 20 days to file the

7 information required under section 521(a)(1) of this title

8 if the court finds justification for extending the period for

9 the filing.’’.

10 SEC. 313. ADEQUATE TIME FOR PREPARATION FOR A HEAR11 ING ON CONFIRMATION OF THE PLAN.

12 Section 1324 of title 11, United States Code, is

13 amended—

14 (1) by striking ‘‘After’’ and inserting the follow15 ing:

16 ‘‘(a) Except as provided in subsection (b) and after’’;

17 and

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

19 ‘‘(b) If not later than 5 days after receiving notice

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

21 to the confirmation of the plan, the hearing on confirma22 tion of the plan may be held no earlier than 20 days after

23 the first meeting of creditors under section 341(a) of this

24 title.’’.
36

•S 1301 RS

1 TITLE IV—TECHNICAL

2 CORRECTIONS

3 SEC. 401. DEFINITIONS.

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

5 amended—

6 (1) by striking ‘‘In this title—’’ and inserting

7 ‘‘In this title:’’;

8 (2) in each paragraph, by inserting ‘‘The term’’

9 after the paragraph designation;

10 (3) in paragraph (35)(B), by striking ‘‘para11 graphs (21B) and (33)(A)’’ and inserting ‘‘para12 graphs (23) and (35)’’;

13 (4) in each of paragraphs (35A) and (38), by

14 striking ‘‘; and’’ at the end and inserting a period;

15 (5) in paragraph (51B)—

16 (A) by inserting ‘‘who is not a family farm17 er’’ after ‘‘debtor’’ the first place it appears;

18 and

19 (B) by striking ‘‘thereto having aggregate’’

20 and all that follows through the end of the

21 paragraph;

22 (6) by amending paragraph (54) to read as fol23 lows:

24 ‘‘(54) The term ‘transfer’ means—

25 ‘‘(A) the creation of a lien;
37

•S 1301 RS

1 ‘‘(B) the retention of title as a security in2 terest;

3 ‘‘(C) the foreclosure of a debtor’s equity of

4 redemption; or

5 ‘‘(D) each mode, direct or indirect absolute

6 or conditional, voluntary or involuntary, of dis7 posing of or parting with property or with an

8 interest in property;’’;

9 (7) in each of paragraphs (1) through (35), in

10 each of paragraphs (36) and (37), and in each of

11 paragraphs (40) through (55) (including paragraph

12 (54), as added by paragraph (6) of this section), by

13 striking the semicolon at the end and inserting a pe14 riod; and

15 (8) by redesignating paragraphs (4) through

16 (55) in entirely numerical sequence, so as to result

17 in numerical paragraph designations of (4) through

18 (68).

19 SEC. 402. ADJUSTMENT OF DOLLAR AMOUNTS.

20 Section 104 of title 11, United States Code, is

21 amended by inserting ‘‘522(f)(3),’’ after ‘‘522(d),’’ each

22 place it appears.
38

•S 1301 RS

1 SEC. 403. EXTENSION OF TIME.

2 Section 108(c)(2) of title 11, United States Code, is

3 amended by striking ‘‘922’’ and all that follows through

4 ‘‘or’’, and inserting ‘‘922, 1201, or’’.

5 SEC. 404. WHO MAY BE A DEBTOR.

6 Section 109(b)(2) of title 11, United States Code, is

7 amended by striking ‘‘subsection (c) or (d) of’’.

8 SEC. 405. PENALTY FOR PERSONS WHO NEGLIGENTLY OR

9 FRAUDULENTLY PREPARE BANKRUPTCY PE10 TITIONS.

11 Section 110(j)(3) of title 11, United States Code, is

12 amended by striking ‘‘attorney’s’’ and inserting

13 ‘‘attorneys’ ’’.

14 SEC. 406. LIMITATION ON COMPENSATION OF PROFES15 SIONAL PERSONS.

16 Section 328(a) of title 11, United States Code, is

17 amended by inserting ‘‘on a fixed or percentage fee basis,’’

18 after ‘‘hourly basis,’’.

19 SEC. 407. SPECIAL TAX PROVISIONS.

20 Section 346(g)(1)(C) of title 11, United States Code,

21 is amended by striking ‘‘, except’’ and all that follows

22 through ‘‘1986’’.

23 SEC. 408. EFFECT OF CONVERSION.

24 Section 348(f)(2) of title 11, United States Code, is

25 amended by inserting ‘‘of the estate’’ after ‘‘property’’ the

26 first place it appears.
39

•S 1301 RS

1 SEC. 409. AUTOMATIC STAY.

2 Section 362(b) of title 11, United States Code, is

3 amended—

4 (1) in paragraph (17), by striking ‘‘or’’ at the

5 end;

6 (2) in paragraph (18), by striking the period at

7 the end and inserting ‘‘; or’’; and

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

9 ‘‘(19) under subsection (a) of this section of

10 any transfer that is not avoidable under section 544

11 and that is not avoidable under section 549.’’.

12 SEC. 410. EXECUTORY CONTRACTS AND UNEXPIRED

13 LEASES.

14 Section 365 of title 11, United States Code, is

15 amended—

16 (1) in subsection (b)(2)—

17 (A) in subparagraph (C), by striking ‘‘or’’

18 at the end; and

19 (B) by striking subparagraph (D) and in20 serting the following:

21 ‘‘(D) the satisfaction of any penalty rate or

22 penalty provision relating to a default arising

23 from a failure to perform nonmonetary obliga24 tions under an executory contract or under an

25 unexpired lease of real or personal property;
40

•S 1301 RS

1 ‘‘(E) the satisfaction of any provision

2 (other than a penalty rate or penalty provision)

3 relating to a default arising from any failure to

4 perform nonmonetary obligations under an un5 expired lease of real property, if it is impossible

6 for the trustee to cure such default by perform7 ing nonmonetary acts at and after the time of

8 assumption; or

9 ‘‘(F) the satisfaction of any provision

10 (other than a penalty rate or penalty provision)

11 relating to a default arising from any failure to

12 perform nonmonetary obligations under an ex13 ecutory contract, if it is impossible for the

14 trustee to cure such default by performing non15 monetary acts at and after the time of assump16 tion and if the court determines, based on the

17 equities of the case, that paragraph (1) should

18 not apply with respect to such default.’’;

19 (2) in subsection (c)—

20 (A) in paragraph (2), by adding ‘‘or’’ at

21 the end;

22 (B) in paragraph (3), by striking ‘‘or’’ at

23 the end and inserting a period; and

24 (C) by striking paragraph (4);

25 (3) in subsection (d)—
41

•S 1301 RS

1 (A) by striking paragraphs (5) through

2 (9); and

3 (B) by redesignating paragraph (10) as

4 paragraph (5); and

5 (4) in subsection (f)(1), by striking ‘‘; except

6 that’’ and all that follows through the end of the

7 paragraph and inserting a period.

8 SEC. 411. AMENDMENT TO TABLE OF SECTIONS.

9 The table of sections for chapter 5 of title 11, United

10 States Code, is amended by striking the item relating to

11 section 556 and inserting the following:

‘‘556. Contractual right to liquidate a commodities contract or forward contract.’’.

12 SEC. 412. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

13 Section 503(b)(4) of title 11, United States Code, is

14 amended by inserting ‘‘subparagraph (A), (B), (C), (D),

15 or (E) of’’ before ‘‘paragraph (3)’’.

16 SEC. 413. PRIORITIES.

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

18 amended—

19 (1) in paragraph (3)(B), by striking the semi20 colon at the end and inserting a period; and

21 (2) in paragraph (7), by inserting ‘‘unsecured’’

22 after ‘‘allowed’’.
42

•S 1301 RS

1 SEC. 414. EXEMPTIONS.

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

3 amended—

4 (1) in subsection (f)(1)(A)(ii)(II)—

5 (A) by striking ‘‘includes a liability des6 ignated as’’ and inserting ‘‘is for a liability that

7 is designated as, and is actually in the nature

8 of,’’; and

9 (B) by striking ‘‘, unless’’ and all that fol10 lows through ‘‘support,’’; and

11 (2) in subsection (g)(2), by striking ‘‘subsection

12 (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.

13 SEC. 415. EXCEPTIONS TO DISCHARGE.

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

15 amended—

16 (1) in subsection (a)(3), by striking ‘‘or (6)’’

17 each place it appears and inserting ‘‘(6), or (15)’’;

18 (2) as amended by section 304(e) of Public Law

19 103–394 (108 Stat. 4133), in paragraph (15)—

20 (A) by inserting ‘‘or’’ after the semicolon

21 at the end; and

22 (B) by transferring such paragraph so as

23 to insert it after paragraph (14) of subsection

24 (a);

25 (3) in paragraph (9), by inserting

26 ‘‘, watercraft, or aircraft’’ after ‘‘motor vehicle’’;
43

•S 1301 RS

1 (4) in subsection (a)(15), as so redesignated by

2 paragraph (2) of this subsection, by inserting ‘‘to a

3 spouse, former spouse, or child of the debtor and’’

4 after ‘‘(15)’’;

5 (5) in subsection (a)(17)—

6 (A) by striking ‘‘by a court’’ and inserting

7 ‘‘on a prisoner by any court’’;

8 (B) by striking ‘‘section 1915 (b) or (f)’’

9 and inserting ‘‘subsection (b) or (f)(2) of sec10 tion 1915’’; and

11 (C) by inserting ‘‘(or a similar non-Federal

12 law)’’ after ‘‘title 28’’ each place it appears; and

13 (6) in subsection (e), by striking ‘‘a insured’’

14 and inserting ‘‘an insured’’.

15 SEC. 416. EFFECT OF DISCHARGE.

16 Section 524(a)(3) of title 11, United States Code, is

17 amended by striking ‘‘section 523’’ and all that follows

18 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

19 or 1328(a)(1) of this title, or that’’.

20 SEC. 417. PROTECTION AGAINST DISCRIMINATORY TREAT21 MENT.

22 Section 525(c) of title 11, United States Code, is

23 amended—

24 (1) in paragraph (1), by inserting ‘‘student’’ be25 fore ‘‘grant’’ the second place it appears; and
44

•S 1301 RS

1 (2) in paragraph (2), by striking ‘‘the program

2 operated under part B, D, or E of’’ and inserting

3 ‘‘any program operated under’’.

4 SEC. 418. PROPERTY OF THE ESTATE.

5 Section 541(b) of title 11, United States Code, is

6 amended—

7 (1) in paragraph (4)—

8 (A) in subparagraph (B)(ii), by inserting

9 ‘‘365 or’’ before ‘‘542’’; and

10 (B) by adding ‘‘or’’ at the end.

11 SEC. 419. LIMITATIONS ON AVOIDING POWERS.

12 Section 546 of title 11, United States Code, is

13 amended by redesignating the second subsection (g) (as

14 added by section 222(a) of the Bankruptcy Reform Act

15 of 1994; 108 Stat. 4129) as subsection (h).

16 SEC. 420. PREFERENCES.

17 Section 547 of title 11, United States Code, is

18 amended—

19 (1) in subsection (b), by striking ‘‘subsection

20 (c)’’ and inserting ‘‘subsections (c) and (i)’’; and

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

22 ‘‘(i) If the trustee avoids under subsection (b) a secu23 rity interest given between 90 days and 1 year before the

24 date of the filing of the petition, by the debtor to an entity

25 that is not an insider for the benefit of a creditor that
45

•S 1301 RS

1 is an insider, such security interest shall be considered to

2 be avoided under this section only with respect to the cred3 itor that is an insider.’’.

4 SEC. 421. POSTPETITION TRANSACTIONS.

5 Section 549(c) of title 11, United States Code, is

6 amended—

7 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

8 of’’;

9 (2) by striking ‘‘such property’’ and inserting

10 ‘‘such real property’’; and

11 (3) by striking ‘‘the interest’’ and inserting

12 ‘‘such interest’’.

13 SEC. 422. TECHNICAL AMENDMENT.

14 Section 552(b)(1) of title 11, United States Code, is

15 amended by striking ‘‘product’’ each place it appears and

16 inserting ‘‘products’’.

17 SEC. 423. SETOFF.

18 Section 553(b)(1) of title 11, United States Code, is

19 amended by striking ‘‘362(b)(14)’’ and inserting

20 ‘‘362(b)(17)’’.

21 SEC. 424. DISPOSITION OF PROPERTY OF THE ESTATE.

22 Section 726(b) of title 11, United States Code, is

23 amended by striking ‘‘1009,’’.
46

•S 1301 RS

1 SEC. 425. GENERAL PROVISIONS.

2 Section 901(a) of title 11, United States Code, is

3 amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.

4 SEC. 426. APPOINTMENT OF ELECTED TRUSTEE.

5 Section 1104(b) of title 11, United States Code, is

6 amended—

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

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

9 paragraph:

10 ‘‘(2)(A) If an eligible, disinterested trustee is elected

11 at a meeting of creditors under paragraph (1), the United

12 States trustee shall file a report certifying that election.

13 Upon the filing of a report under the preceding sentence—

14 ‘‘(i) the trustee elected under paragraph (1)

15 shall be considered to have been selected and ap16 pointed for purposes of this section; and

17 ‘‘(ii) the service of any trustee appointed under

18 subsection (d) shall terminate.

19 ‘‘(B) In the case of any dispute arising out of an elec20 tion under subparagraph (A), the court shall resolve the

21 dispute.’’.

22 SEC. 427. ABANDONMENT OF RAILROAD LINE.

23 Section 1170(e)(1) of title 11, United States Code,

24 is amended by striking ‘‘section 11347’’ and inserting

25 ‘‘section 11326(a)’’.
47

•S 1301 RS

1 SEC. 428. CONTENTS OF PLAN.

2 Section 1172(c)(1) of title 11, United States Code,

3 is amended by striking ‘‘section 11347’’ and inserting

4 ‘‘section 11326(a)’’.

5 SEC. 429. DISCHARGE UNDER CHAPTER 12.

6 Subsections (a) and (c) of section 1228 of title 11,

7 United States Code, are amended by striking

8 ‘‘1222(b)(10)’’ each place it appears and inserting

9 ‘‘1222(b)(9)’’.

10 SEC. 430. CONTENTS OF PLAN.

11 Section 1322 of title 11, United States Code, is

12 amended—

13 (1) in subsection (b), by striking ‘‘(c)’’ and in14 serting ‘‘(d)’’; and

15 (2) in subsection (e), by striking ‘‘default,

16 shall’’ and inserting ‘‘default shall’’.

17 SEC. 431. DISCHARGE UNDER CHAPTER 13.

18 Paragraphs (1) through (3) of section 1328(a) of title

19 11, United States Code, are amended to read as follows:

20 ‘‘(1) provided for under section 1322(b)(5) of

21 this title;

22 ‘‘(2) of the kind specified in paragraph (5), (8),

23 or (9) of section 523(a) of this title; or

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

25 in a sentence on the debtor’s conviction of a crime.’’.
48

•S 1301 RS

1 SEC. 432. 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 follow6 ing clause (ii), by striking ‘‘October 1, 2002’’ and

7 inserting ‘‘October 1, 2012’’; and

8 (2) in subparagraph (F)—

9 (A) in clause (i)—

10 (i) in subclause (II), by striking ‘‘Oc11 tober 1, 2002’’ and inserting ‘‘October 1,

12 2012’’; and

13 (ii) in the matter following subclause

14 (II), by striking ‘‘October 1, 2003’’ and in15 serting ‘‘October 1, 2013’’; and

16 (B) in clause (ii), in the matter following

17 subclause (II), by striking ‘‘October 1, 2003’’

18 and inserting ‘‘October 1, 2013’’.

19 SEC. 433. BANKRUPTCY CASES AND PROCEEDINGS.

20 Section 1334(d) of title 28, United States Code, is

21 amended—

22 (1) by striking ‘‘made under this subsection’’

23 and inserting ‘‘made under subsection (c)’’; and

24 (2) by striking ‘‘This subsection’’ and inserting

25 ‘‘Subsection (c) and this subsection’’.
49

•S 1301 RS

1 SEC. 434. KNOWING DISREGARD OF BANKRUPTCY LAW OR

2 RULE.

3 Section 156(a) of title 18, United States Code, is

4 amended—

5 (1) in the first undesignated paragraph—

6 (A) by inserting ‘‘(1) the term’’ before

7 ‘‘ ‘bankruptcy’’; and

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

9 inserting ‘‘; and’’; and

10 (2) in the second undesignated paragraph—

11 (A) by inserting ‘‘(2) the term’’ before

12 ‘‘ ‘document’’; and

13 (B) by striking ‘‘this title’’ and inserting

14 ‘‘title 11’’.

15 SEC. 435. EFFECTIVE DATE; APPLICATION OF AMEND16 MENTS.

17 (a) EFFECTIVE DATE.—Except as provided in sub18 section (b), this title and the amendments made by this

19 title shall take effect on the date of enactment of this Act.

20 (b) APPLICATION OF AMENDMENTS.—The amend21 ments made by this title shall apply only with respect to

22 cases commenced under title 11, United States Code, on

23 or after the date of enactment of this Act.

24 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

26 ‘‘Consumer Bankruptcy Reform Act of 1998’’.
50

•S 1301 RS

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

2 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.

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.

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. Preferred payment of child support in chapter 7 proceedings.

Sec. 324. Preferred payment of child support in chapter 13 proceedings.

Sec. 325. Payment of child support required to obtain a discharge in chapter 13

proceedings.

Sec. 326. Child support and alimony collection.

Sec. 327. Nondischargeability of certain debts for alimony, maintenance, and

support.
51

•S 1301 RS

Sec. 328. Enforcement of child and spousal support.

Sec. 329. Dependent child defined.

TITLE IV—TECHNICAL CORRECTIONS

Sec. 401. Definitions.

Sec. 402. Adjustment of dollar amounts.

Sec. 403. Extension of time.

Sec. 404. Who may be a debtor.

Sec. 405. Penalty for persons who negligently or fraudulently prepare bankruptcy

petitions.

Sec. 406. Limitation on compensation of professional persons.

Sec. 407. Special tax provisions.

Sec. 408. Effect of conversion.

Sec. 409. Automatic stay.

Sec. 410. Amendment to table of sections.

Sec. 411. Allowance of administrative expenses.

Sec. 412. Priorities.

Sec. 413. Exemptions.

Sec. 414. Exceptions to discharge.

Sec. 415. Effect of discharge.

Sec. 416. Protection against discriminatory treatment.

Sec. 417. Property of the estate.

Sec. 418. Limitations on avoiding powers.

Sec. 419. Preferences.

Sec. 420. Postpetition transactions.

Sec. 421. Technical amendment.

Sec. 422. Setoff.

Sec. 423. Disposition of property of the estate.

Sec. 424. General provisions.

Sec. 425. Appointment of elected trustee.

Sec. 426. Abandonment of railroad line.

Sec. 427. Contents of plan.

Sec. 428. Discharge under chapter 12.

Sec. 429. Extensions.

Sec. 430. Bankruptcy cases and proceedings.

Sec. 431. Knowing disregard of bankruptcy law or rule.

Sec. 432. 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—
52

•S 1301 RS

1 (1) by striking the section heading and inserting

2 the following:

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

4 under chapter 13’’;

5 and

6 (2) in subsection (b)—

7 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

8 (B) in paragraph (1), as redesignated by

9 subparagraph (A) of this paragraph—

10 (i) in the first sentence—

11 (I) by striking ‘‘but not’’ and in12 serting ‘‘or’’;

13 (II) by inserting ‘‘, or, with the

14 debtor’s consent, convert such a case to

15 a case under chapter 13 of this title,’’

16 after ‘‘consumer debts’’; and

17 (III) by striking ‘‘substantial

18 abuse’’ and inserting ‘‘abuse’’; and

19 (ii) by striking the last sentence and

20 inserting the following:

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

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

23 this chapter, the court shall consider whether—

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

25 current income of the debtor, the debtor could pay an
53

•S 1301 RS

1 amount greater than or equal to 20 percent of unse2 cured claims that are not considered to be priority

3 claims (as determined under subchapter I of chapter

4 5); or

5 ‘‘(B) the debtor filed a petition for the relief in

6 bad faith.

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

8 586(a)(1) of title 28 brings a motion for dismissal or con9 version under this subsection and the court grants that mo10 tion and finds that the action of the counsel for the debtor

11 in filing under this chapter was not substantially justified,

12 the court shall order the counsel for the debtor to reimburse

13 the trustee for all reasonable costs in prosecuting the mo14 tion, including reasonable attorneys’ fees.

15 ‘‘(B) If the court finds that the attorney for the debtor

16 violated Rule 9011, at a minimum, the court shall order—

17 ‘‘(i) the assessment of an appropriate civil pen18 alty against the counsel for the debtor; and

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

20 panel trustee or the United States trustee.

21 ‘‘(C) In the case of a petition referred to in subpara22 graph (B), the signature of an attorney shall constitute a

23 certificate that the attorney has—

24 ‘‘(i) performed a reasonable investigation into

25 the circumstances that gave rise to the petition; and
54

•S 1301 RS

1 ‘‘(ii) determined that the petition—

2 ‘‘(I) is well grounded in fact; and

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

4 good faith argument for the extension, modifica5 tion, or reversal of existing law and does not

6 constitute an abuse under paragraph (1) of this

7 subsection.

8 ‘‘(4)(A) Except as provided in subparagraph (B), the

9 court may award a debtor all reasonable costs in contesting

10 a motion brought by a party in interest (other than a panel

11 trustee) under this subsection (including reasonable attor12 neys’ fees) if—

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

14 ‘‘(ii) the court finds that—

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

16 the motion was not substantially justified; or

17 ‘‘(II) the party brought the motion solely for

18 the purpose of coercing a debtor into waiving a

19 right guaranteed to the debtor under this title.

20 ‘‘(B) A party in interest that has a claim of an aggre21 gate amount less than $1,000 shall not be subject to sub22 paragraph (A).

23 ‘‘(5) However, a party in interest may not bring a

24 motion under this section if the debtor and the debtor’s

25 spouse combined, as of the date of the order for relief, have
55

•S 1301 RS

1 current 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. However, for

4 a household of more than 4 individuals, the median income

5 shall be that of a household of 4 individuals plus $583 for

6 each additional member of that household.’’.

7 (b) CLERICAL AMENDMENT.—The table of sections at

8 the beginning of chapter 7 of title 11, United States Code,

9 is amended by striking the item relating to section 707 and

10 inserting the following:

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

11 TITLE II—ENHANCED PROCE12 DURAL PROTECTIONS FOR

13 CONSUMERS

14 SEC. 201. ALLOWANCE OF CLAIMS OR INTERESTS.

15 Section 502 of title 11, United States Code, is amended

16 by adding at the end the following:

17 ‘‘(k)(1) The court may award the debtor reasonable at18 torneys’ fees and costs if, after an objection is filed by a

19 debtor, the court—

20 ‘‘(A)(i) disallows the claim; or

21 ‘‘(ii) reduces the claim by an amount greater

22 than 20 percent of the amount of the initial claim

23 filed by a party in interest; and

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

25 claim is not substantially justified.
56

•S 1301 RS

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

2 under this section is not substantially justified, the court

3 may, in addition to awarding a debtor reasonable attor4 neys’ fees and costs under paragraph (1), award such dam5 ages as may be required by the equities of the case.’’.

6 SEC. 202. EXCEPTIONS TO DISCHARGE.

7 Section 523 of title 11, United States Code, is amend8 ed—

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

10 representation’’ and inserting ‘‘a material false rep11 resentation upon which the defrauded person justifi12 ably relied’’; and

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

14 following:

15 ‘‘(d)(1) Subject to paragraph (3), if a creditor requests

16 a determination of dischargeability of a consumer debt

17 under this section and that debt is discharged, the court

18 shall award the debtor reasonable attorneys’ fees and costs.

19 ‘‘(2) In addition to making an award to a debtor

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

21 of a creditor in a proceeding covered under this section is

22 not substantially justified, the court may award reasonable

23 attorneys’ fees and costs under paragraph (1) and such

24 damages as may be required by the equities of the case.
57

•S 1301 RS

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

2 of dischargeability of a consumer debt under subsection

3 (a)(2) if—

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

5 made a good faith effort to negotiate a reasonable al6 ternative repayment schedule (including making an

7 offer of a reasonable alternative repayment schedule);

8 and

9 ‘‘(ii) that creditor refused to negotiate an alter10 native payment schedule, and that refusal was not

11 reasonable.

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

13 have the burden of proof of establishing that—

14 ‘‘(i) an offer made by that debtor under subpara15 graph (A)(i) was reasonable; and

16 ‘‘(ii) the refusal to negotiate by the creditor in17 volved to was not reasonable.’’.

18 SEC. 203. EFFECT OF DISCHARGE.

19 Section 524 of title 11, United States Code, is amended

20 by adding at the end the following:

21 ‘‘(i) The willful failure of a creditor to credit payments

22 received under a plan confirmed under this title (including

23 a plan of reorganization confirmed under chapter 11 of this

24 title) in the manner required by the plan (including credit-
58

•S 1301 RS

1 ing the amounts required under the plan) shall constitute

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

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

4 creditor to comply with the requirements for a reaffirma5 tion agreement under subsections (c) and (d), or by any

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

7 shall be entitled to recover—

8 ‘‘(1) the greater of—

9 ‘‘(A)(i) the amount of actual damages; mul10 tiplied by

11 ‘‘(ii) 3; or

12 ‘‘(B) $5,000; and

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

14 SEC. 204. AUTOMATIC STAY.

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

16 amended to read as follows:

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

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

19 to recover—

20 ‘‘(A) actual damages; and

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

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

23 and attorneys’ fees under paragraph (1), an individual de24 scribed in paragraph (1) may recover punitive damages in

25 appropriate circumstances.’’.
59

•S 1301 RS

1 SEC. 205. DISCHARGE.

2 Section 727 of title 11, United States Code, is amend3 ed—

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

5 following:

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

7 of dischargeability of a consumer debt under subsection (a)

8 if—

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

10 made a good faith effort to negotiate a reasonable al11 ternative repayment schedule (including making an

12 offer of a reasonable alternative repayment schedule);

13 and

14 ‘‘(ii) that creditor refused to negotiate an alter15 native payment schedule, and that refusal was not

16 reasonable.

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

18 have the burden of proof of establishing that—

19 ‘‘(i) an offer made by that debtor under subpara20 graph (A)(i) was reasonable; and

21 ‘‘(ii) the refusal to negotiate by the creditor in22 volved to was not reasonable.’’; and

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

24 ‘‘(f)(1) The court may award the debtor reasonable at25 torneys’ fees and costs in any case in which a creditor files
60

•S 1301 RS

1 a motion to deny relief to a debtor under this section and

2 that motion—

3 ‘‘(A) is denied; or

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

5 ‘‘(2) If the court finds that the position of a party fil6 ing a motion under this section is not substantially justi7 fied, the court may assess against the creditor such damages

8 as may be required by the equities of the case.’’.

9 SEC. 206. DISCOURAGING PREDATORY LENDING PRAC10 TICES.

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

12 amended—

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

14 end;

15 (2) in paragraph (9), by striking the period at

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

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

18 ‘‘(10) the claim is based on a secured debt if the

19 creditor has failed to comply with the requirements of

20 subsection (a), (b), (c), (d), (e), (f), (g), (h), or (i) of

21 section 129 of the Truth in Lending Act (15 U.S.C.

22 1639).’’.
61

•S 1301 RS

1 TITLE III—IMPROVED PROCE2 DURES FOR EFFICIENT AD3 MINISTRATION OF THE BANK4 RUPTCY SYSTEM

5 SEC. 301. NOTICE OF ALTERNATIVES.

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

7 States Code, is amended by striking subsection (b) and in8 serting the following:

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

10 by an individual whose debts are primarily consumer debts,

11 that individual shall be given or obtain (as required in sec12 tion 521(a)(1), as part of the certification process under

13 subchapter 1 of chapter 5) a written notice prescribed by

14 the United States trustee for the district in which the peti15 tion is filed pursuant to section 586 of title 28. The notice

16 shall contain the following:

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

18 and 13 and the general purpose, benefits, and costs of

19 proceeding under each of those chapters.

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

21 available to that individual from an independent

22 nonprofit debt counseling service.

23 ‘‘(3)(A) The name, address, and telephone num24 ber of each nonprofit debt counseling service with an
62

•S 1301 RS

1 office located in the district in which the petition is

2 filed, if any.

3 ‘‘(B) Any nonprofit debt counseling service de4 scribed in subparagraph (A) that has registered with

5 the clerk of the bankruptcy court on or before Decem6 ber 10 of the preceding year shall be included in the

7 list referred to in that clause, unless the chief bank8 ruptcy judge of the district involved, after giving no9 tice to the debt counseling service and the United

10 States trustee and opportunity for a hearing, orders,

11 for good cause, that a particular debt counseling serv12 ice shall not be so listed.’’.

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

14 United States Code, is amended—

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

16 shall—’’;

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

18 following:

19 ‘‘(1) file—

20 ‘‘(A) a list of creditors; and

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

22 ‘‘(i) a schedule of assets and liabilities;

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

24 current expenditures;
63

•S 1301 RS

1 ‘‘(iii) a statement of the debtor’s finan2 cial affairs and, if applicable, a certifi3 cate—

4 ‘‘(I) of an attorney whose name is

5 on the petition as the attorney for the

6 debtor or any bankruptcy petition pre7 parer signing the petition pursuant to

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

9 attorney or bankruptcy petition pre10 parer delivered to the debtor any notice

11 required by section 342(b); or

12 ‘‘(II) if no attorney for the debtor

13 is indicated and no bankruptcy peti14 tion preparer signed the petition, of the

15 debtor that such notice was obtained

16 and read by the debtor;

17 ‘‘(iv) copies of any Federal tax returns,

18 including any schedules or attachments,

19 filed by the debtor for the 3-year period pre20 ceding the order for relief;

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

22 other evidence of payment, if any, received

23 by the debtor from any employer of the

24 debtor in the period 60 days prior to the fil25 ing of the petition;
64

•S 1301 RS

1 ‘‘(vi) a statement of the amount of pro2 jected monthly net income, itemized to show

3 how calculated; and

4 ‘‘(vii) a statement disclosing any rea5 sonably anticipated increase in income or

6 expenditures over the 12-month period fol7 lowing the date of filing;’’; and

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

9 ‘‘(b)(1) At any time, a creditor, in the case of an indi10 vidual under chapter 7 or 13, may file with the court notice

11 that the creditor requests the petition, schedules, and a

12 statement of affairs filed by the debtor in the case and the

13 court shall make those documents available to the creditor

14 who requests those documents.

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

16 13, may file with the court notice that the creditor requests

17 the plan filed by the debtor in the case and the court shall

18 make that plan available to the creditor who requests that

19 plan.

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

21 or 13 shall file with the court—

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

23 all tax returns, including any schedules or attach24 ments, with respect to the period from the commence25 ment of the case until such time as the case is closed;
65

•S 1301 RS

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

2 all tax returns, including any schedules or attach3 ments, that were not filed with the taxing authority

4 when the schedules under subsection (a)(1) were filed

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

6 order for relief;

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

8 including schedules or attachments, described in para9 graph (1) or (2); and

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

11 subject to the penalties of perjury by the debtor of the

12 debtor’s income and expenditures in the preceding tax

13 year and monthly income, that shows how the

14 amounts are calculated—

15 ‘‘(A) beginning on the date that is the later

16 of 90 days after the close of the debtor’s tax year

17 or 1 year after the order for relief, unless a plan

18 has been confirmed; and

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

20 45 days before each anniversary of the confirma21 tion of the plan until the case is closed.

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

23 shall disclose—

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

25 debtor;
66

•S 1301 RS

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

2 the debtor for the support of any dependents of the

3 debtor; and

4 ‘‘(C) the identity of any persons who contributed,

5 and the amount contributed, to the household in

6 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 sub12 section (e).

13 ‘‘(e)(1) Not later than 30 days after the date of enact14 ment of the Consumer Bankruptcy Reform Act of 1998, the

15 Director of the Administrative Office of the United States

16 Courts shall establish procedures for safeguarding the con17 fidentiality of any tax information required to be provided

18 under this section.

19 ‘‘(2) The procedures under paragraph (1) shall include

20 restrictions on creditor access to tax information that is re21 quired to be provided under this section.

22 ‘‘(3) Not later than 1 year after the date of enactment

23 of the Consumer Bankruptcy Reform Act of 1998, the Direc24 tor of the Administrative Office of the United States Courts

25 shall prepare, and submit to Congress a report that—
67

•S 1301 RS

1 ‘‘(A) assesses the effectiveness of the procedures

2 under paragraph (1); and

3 ‘‘(B) if appropriate, includes proposed legisla4 tion—

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

6 tax information; and

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

8 use by any person of the tax information re9 quired to be provided under this section.’’.

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

11 States Code, is amended—

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

13 end;

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

15 the end and inserting ‘‘; and’’; and

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

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

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

19 change in the nonprofit debt counseling services reg20 istered with the bankruptcy court, prescribe and make

21 available on request the notice described in section

22 342(b)(3) of title 11 for each district included in the

23 region.’’.
68

•S 1301 RS

1 SEC. 302. FAIR TREATMENT OF SECURED CREDITORS

2 UNDER CHAPTER 13.

3 (a) RESTORING THE FOUNDATION FOR SECURED

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

5 is amended—

6 (1) in paragraph (5), by striking the matter pre7 ceding subparagraph (A) and inserting the following:

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

9 for by the plan that is secured under applicable non10 bankruptcy law by reason of a lien on property in

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

12 setoff under section 553—’’; and

13 (2) by adding at the end of the subsection the fol14 lowing flush sentence:

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

16 to a claim described in that paragraph.’’.

17 (b) PAYMENT OF HOLDERS OF CLAIMS SECURED BY

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

19 Code, is amended to read as follows:

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

21 such claim retain the lien securing such claim

22 until the debt that is the subject of the claim is

23 fully paid for, as provided under the plan; and’’.

24 (c) DETERMINATION OF SECURED STATUS.—Section

25 506 of title 11, United States Code, is amended by adding

26 at the end the following:
69

•S 1301 RS

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

2 to the extent attributable in whole or in part to the purchase

3 price of personal property acquired by the debtor during

4 the 90-day period preceding the date of filing of the peti5 tion.’’.

6 SEC. 303. DISCOURAGEMENT OF BAD FAITH REPEAT FIL7 INGS.

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

9 amended—

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

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

12 the stay’’;

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

14 the stay’’;

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

16 the time’’;

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

18 ‘‘(ii) the time’’; and

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

20 ‘‘(2) Except as provided in subsections (d) through (f),

21 the stay under subsection (a) with respect to any action

22 taken with respect to a debt or property securing such debt

23 or with respect to any lease shall terminate with respect

24 to the debtor on the 30th day after the filing of the later

25 case if—
70

•S 1301 RS

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

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

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

4 than a case refiled under a chapter other than chapter

5 7 after dismissal under section 707(b)) was pending

6 during the preceding year but was dismissed.

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

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

9 more creditors (subject to such conditions or limitations as

10 the court may impose) after providing notice and a hearing

11 completed before the expiration of the 30-day period de12 scribed in paragraph (2) only if the party in interest dem13 onstrates that the filing of the later case is in good faith

14 with respect to the creditors to be stayed.

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

16 in good faith (except that such presumption may be rebutted

17 by clear and convincing evidence to the contrary)—

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

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

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

21 was a debtor was pending during the 1-year pe22 riod described in paragraph (1);

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

24 7, 11, or 13 in which the individual was a debt-
71

•S 1301 RS

1 or was dismissed within the period specified in

2 paragraph (2) after—

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

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

5 file or amend the petition or other docu6 ments as required by this title; or

7 ‘‘(II) the debtor, without substantial

8 excuse, failed to perform the terms of a plan

9 that was confirmed by the court; or

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

11 with the dismissal of the next most previous case

12 under chapter 7, 11, or 13 there has not been a

13 substantial change in the financial or personal

14 affairs of the debtor;

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

16 is no other reason to conclude that the later case

17 will be concluded with a discharge; or

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

19 there is not a confirmed plan that will be fully

20 performed; and

21 ‘‘(B) with respect to any creditor that com22 menced an action under subsection (d) in a previous

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

24 the date of dismissal of that case, that action was still

25 pending or had been resolved by terminating, condi-
72

•S 1301 RS

1 tioning, or limiting the stay with respect to actions

2 of that creditor.

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

4 under subsection (a) with respect to real or personal prop5 erty of any kind, and the request is granted in whole or

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

7 order under this subsection, order that the relief so granted

8 shall be in rem either—

9 ‘‘(i) for a definite period of not less than 1 year;

10 or

11 ‘‘(ii) indefinitely.

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

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

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

15 the debtor.

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

17 (A) so provides, the stay shall, in addition to being inap18 plicable to the debtor involved, not apply with respect to

19 an entity under this title if—

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

21 at the time that the entity obtained an interest in the

22 property affected; or

23 ‘‘(II) the entity was notified of the commence24 ment of the proceeding for relief from the stay, and
73

•S 1301 RS

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

2 entity was a debtor was pending.

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

4 during the period beginning with the issuance of the order

5 for relief and ending at such time as the case involved is

6 closed.’’.

7 SEC. 304. TIMELY FILING AND CONFIRMATION OF PLANS

8 UNDER CHAPTER 13.

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

10 States Code, is amended to read as follows:

11 ‘‘§ 1321. Filing of plan

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

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

14 court may extend such period if the need for an extension

15 is attributable to circumstances for which the debtor should

16 not justly be held accountable.’’.

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

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

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

20 45 days after the filing of the plan, unless the court, after

21 providing notice and a hearing, orders otherwise.’’.

22 SEC. 305. APPLICATION OF THE CODEBTOR STAY ONLY

23 WHEN THE STAY PROTECTS THE DEBTOR.

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

25 amended—
74

•S 1301 RS

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

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

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

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

5 debtor did not receive the consideration for the claim held

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

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

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

9 the creditor proceeds against—

10 ‘‘(i) the individual that received that consider11 ation; or

12 ‘‘(ii) property not in the possession of the debtor

13 that secures that claim.

14 ‘‘(B) Notwithstanding subparagraph (A), the stay pro15 vided by subsection (a) shall apply in any case in which

16 the debtor is primarily obligated to pay the creditor in

17 whole or in part with respect to a claim described in sub18 paragraph (A) under a legally binding separation or prop19 erty settlement agreement or divorce or dissolution decree

20 with respect to—

21 ‘‘(i) an individual described in subparagraph

22 (A)(i); or

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

24 ‘‘(3) Notwithstanding subsection (c), the stay provided

25 by subsection (a) shall terminate as of the date of confirma-
75

•S 1301 RS

1 tion of the plan, in any case in which the plan of the debtor

2 provides that the debtor’s interest in personal property sub3 ject to a lease with respect to which the debtor is the lessee

4 will be surrendered or abandoned or no payments will be

5 made under the plan on account of the debtor’s obligations

6 under the lease.’’.

7 SEC. 306. IMPROVED BANKRUPTCY STATISTICS.

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

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

10 following:

11 ‘‘§ 159. Bankruptcy statistics

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

13 regarding individual debtors with primarily consumer

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

15 11. Those statistics shall be in a form prescribed by the Di16 rector of the Administrative Office of the United States

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

18 ‘‘(b) The Director shall—

19 ‘‘(1) compile the statistics referred to in sub20 section (a);

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

22 and

23 ‘‘(3) not later than October 31, 1998, and annu24 ally thereafter, prepare, and submit to Congress a re25 port concerning the information collected under sub-
76

•S 1301 RS

1 section (a) that contains an analysis of the informa2 tion.

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

4 shall—

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

6 11;

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

8 district; and

9 ‘‘(3) include information concerning—

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

11 the debtors described in subsection (a), and in

12 each category of assets and liabilities, as re13 ported in the schedules prescribed pursuant to

14 section 2075 of this title and filed by those debt15 ors;

16 ‘‘(B) the current total monthly income, pro17 jected monthly net income, and average income

18 and average expenses of those debtors as reported

19 on the schedules and statements that each such

20 debtor files under sections 111, 521, and 1322 of

21 title 11;

22 ‘‘(C) the aggregate amount of debt dis23 charged in the reporting period, determined as

24 the difference between the total amount of debt

25 and obligations of a debtor reported on the sched-
77

•S 1301 RS

1 ules and the amount of such debt reported in cat2 egories which are predominantly nondischarge3 able;

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

5 filing of the petition and the closing of the case;

6 ‘‘(E) for the reporting period—

7 ‘‘(i) the number of cases in which a re8 affirmation was filed; and

9 ‘‘(ii)(I) the total number of reaffirma10 tions filed;

11 ‘‘(II) of those cases in which a reaffir12 mation was filed, the number in which the

13 debtor was not represented by an attorney;

14 and

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

16 cases in which the reaffirmation was ap17 proved by the court;

18 ‘‘(F) with respect to cases filed under chap19 ter 13 of title 11, for the reporting period—

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

21 final order was entered determining the

22 value of property securing a claim in an

23 amount less than the amount of the claim;

24 and
78

•S 1301 RS

1 ‘‘(II) the number of final orders deter2 mining the value of property securing a

3 claim issued;

4 ‘‘(ii) the number of cases dismissed for

5 failure to make payments under the plan;

6 and

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

8 debtor filed another case within the 6 years

9 previous to the filing; and

10 ‘‘(G) the extent of creditor misconduct and

11 any amount of punitive damages awarded by the

12 court for creditor misconduct.’’.

13 (b) CLERICAL AMENDMENT.—The table of sections at

14 the beginning of chapter 6 of title 28, United States Code,

15 is amended by adding at the end the following:

‘‘159. Bankruptcy statistics.’’.

16 (c) EFFECTIVE DATE.—The amendments made by this

17 section shall take effect 18 months after the date of enact18 ment of this Act.

19 SEC. 307. AUDIT PROCEDURES.

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

21 States Code, is amended—

22 (1) in subsection (a), as amended by section 301

23 of this Act, by striking paragraph (6) and inserting

24 the following:
79

•S 1301 RS

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

2 directs, including the results of audits performed

3 under subsection (f); and’’; and

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

5 ‘‘(f)(1)(A) The Attorney General shall establish proce6 dures for the auditing of the accuracy and completeness of

7 petitions, schedules, and other information which the debtor

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

9 11, and, if applicable, section 111 of title 11, in individual

10 cases filed under chapter 7 or 13 of such title.

11 ‘‘(B) The audits described in subparagraph (A) shall

12 be made in accordance with generally accepted auditing

13 standards and performed by independent certified public

14 accountants or independent licensed public accountants.

15 Those procedures shall—

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

17 qualified persons to contract with the United States

18 trustee to perform those audits;

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

20 cases to be audited according to generally accepted

21 auditing standards, except that not less than 1 out of

22 every 500 cases in each Federal judicial district shall

23 be selected for audit;

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

25 expenses which reflect greater than average variances
80

•S 1301 RS

1 from the statistical norm of the district in which the

2 schedules were filed; and

3 ‘‘(iv) establish procedures for—

4 ‘‘(I) reporting the results of those audits

5 and any material misstatement of income, ex6 penditures, or assets of a debtor to the Attorney

7 General, the United States Attorney and the

8 court, as appropriate;

9 ‘‘(II) providing, not less frequently than an10 nually, public information concerning the aggre11 gate results of such audits including the percent12 age of cases, by district, in which a material

13 misstatement of income or expenditures is re14 ported; and

15 ‘‘(III) fully funding those audits, including

16 procedures requiring each debtor with sufficient

17 available income or assets to contribute to the

18 payment for those audits, as an administrative

19 expense or otherwise.

20 ‘‘(2) The United States trustee for each district is au21 thorized to contract with auditors to perform audits in cases

22 designated by the United States trustee according to the

23 procedures established under paragraph (1).

24 ‘‘(3) According to procedures established under para25 graph (1), upon request of a duly appointed auditor, the
81

•S 1301 RS

1 debtor shall cause the accounts, papers, documents, finan2 cial records, files and all other papers, things, or property

3 belonging to the debtor as the auditor requests and that are

4 reasonably necessary to facilitate the audit to be made

5 available for inspection and copying.

6 ‘‘(4)(A) The report of each audit conducted under this

7 subsection shall be filed with the court, the Attorney Gen8 eral, and the United States Attorney, as required under

9 procedures established by the Attorney General under para10 graph (1).

11 ‘‘(B) If a material misstatement of income or expendi12 tures or of assets is reported under subparagraph (A), a

13 statement specifying that misstatement shall be filed with

14 the court and the United States trustee shall—

15 ‘‘(i) give notice thereof to the creditors in the

16 case; and

17 ‘‘(ii) in an appropriate case, in the opinion of

18 the United States trustee, that requires investigation

19 with respect to possible criminal violations, the

20 United States Attorney for the district.’’.

21 (b) EFFECTIVE DATE.—The amendments made by this

22 section shall take effect 18 months after the date of enact23 ment of this Act.
82

•S 1301 RS

1 SEC. 308. CREDITOR REPRESENTATION AT FIRST MEETING

2 OF CREDITORS.

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

4 amended by inserting after the first sentence the following:

5 ‘‘Notwithstanding any local court rule, provision of a State

6 constitution, any other Federal or State law that is not a

7 bankruptcy law, or other requirement that representation

8 at the meeting of creditors under subsection (a) be by an

9 attorney, a creditor holding a consumer debt or any rep10 resentative of the creditor (which may include an entity or

11 an employee of an entity and may be a representative for

12 more than one creditor) shall be permitted to appear at and

13 participate in the meeting of creditors in a case under chap14 ter 7 or 13, either alone or in conjunction with an attorney

15 for the creditor. Nothing in this subsection shall be con16 strued to require any creditor to be represented by an attor17 ney 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 amend21 ed—

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:
83

•S 1301 RS

1 ‘‘(d)(1) If the credit agreement between the debtor and

2 the creditor or the last communication before the filing of

3 the petition in a voluntary case from the creditor to a debtor

4 who is an individual states an account number of the debtor

5 that is the current account number of the debtor with re6 spect to any debt held by the creditor against the debtor,

7 the debtor shall include that account number in any notice

8 to the creditor required to be given under this title.

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

10 last communication before the filing of the petition, an ad11 dress at which the creditor wishes to receive correspondence

12 regarding the debtor’s account, any notice to the creditor

13 required to be given by the debtor under this title shall be

14 given at such address.

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

16 include—

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

18 creditor after the commencement of the case;

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

20 under section 521(a)(2);

21 ‘‘(C) notice of the commencement of any proceed22 ing in the case to which the creditor is a party; and

23 ‘‘(D) any notice of a hearing under section 1324.

24 ‘‘(e)(1) At any time, a creditor, in a case of an indi25 vidual under chapter 7 or 13, may file with the court and
84

•S 1301 RS

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

2 notify the creditor in that case.

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

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

5 notice under paragraph (1), that notice shall be given at

6 that address.

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

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

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

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

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

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

13 case.

14 ‘‘(g)(1) Notice given to a creditor other than as pro15 vided in this section shall not be effective notice until that

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

17 ‘‘(2) If the creditor has designated a person or depart18 ment to be responsible for receiving notices concerning

19 bankruptcy cases and has established reasonable procedures

20 so that bankruptcy notices received by the creditor will be

21 delivered to that department or person, notice shall not be

22 brought to the attention of the creditor until that notice is

23 received by that person or department.’’.
85

•S 1301 RS

1 SEC. 310. STOPPING ABUSIVE CONVERSIONS FROM CHAP2 TER 13.

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

4 amended—

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

6 the end;

7 (2) in subparagraph (B)—

8 (A) by striking ‘‘in the converted case, with

9 allowed secured claims’’ and inserting ‘‘only in

10 a case converted to chapter 11 or 12 but not in

11 a case converted to chapter 7, with allowed se12 cured claims in cases under chapters 11 and

13 12’’; and

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

15 and’’; and

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

17 ‘‘(C) with respect to cases converted from chapter

18 13, the claim of any creditor holding security as of

19 the date of the petition shall continue to be secured

20 by that security unless the full amount of that claim

21 determined under applicable nonbankruptcy law has

22 been paid in full as of the date of conversion, notwith23 standing any valuation or determination of the

24 amount of an allowed secured claim made for the

25 purposes of the chapter 13 proceeding.’’.
86

•S 1301 RS

1 SEC. 311. PROMPT RELIEF FROM STAY IN INDIVIDUAL

2 CASES.

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

4 amended—

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

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

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

8 individual filing under chapter 7, 11, or 13, the stay under

9 subsection (a) shall terminate on the date that is 60 days

10 after a request is made by a party in interest under sub11 section (d), unless—

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

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

14 request; or

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

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

17 or

18 ‘‘(ii) by the court for such specific period of

19 time as the court finds is required for good

20 cause.’’.

21 SEC. 312. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED22 ULES OR PROVIDE REQUIRED INFORMATION.

23 Section 707 of title 11, United States Code, as amend24 ed by section 102 of this Act, is amended by adding at the

25 end the following:
87

•S 1301 RS

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

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

3 under chapter 7 or 13 fails to file all of the information

4 required under section 521(a)(1) within 45 days after the

5 filing of the petition commencing the case, the case shall

6 be automatically dismissed effective on the 46th day after

7 the filing of the petition.

8 ‘‘(2) With respect to a case described in paragraph (1),

9 any party in interest may request the court to enter an

10 order dismissing the case. The court shall, if so requested,

11 enter an order of dismissal not later than 5 days after that

12 request.

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

14 after the filing of the petition commencing a case described

15 in paragraph (1), the court may allow the debtor an addi16 tional period of not to exceed 20 days to file the information

17 required under section 521(a)(1) if the court finds justifica18 tion for extending the period for the filing.’’.

19 SEC. 313. ADEQUATE TIME FOR PREPARATION FOR A HEAR20 ING ON CONFIRMATION OF THE PLAN.

21 Section 1324 of title 11, United States Code, as amend22 ed by section 304 of this Act, is amended—

23 (1) by striking ‘‘After’’ and inserting the follow24 ing:
88

•S 1301 RS

1 ‘‘(a) Except as provided in subsection (b) and after’’;

2 and

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

4 ‘‘(b) If not later than 5 days after receiving notice of

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

6 to the confirmation of the plan, the hearing on confirmation

7 of the plan may be held no earlier than 20 days after the

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

9 SEC. 314. DISCHARGE UNDER CHAPTER 13.

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

11 amended by striking paragraphs (1) through (3) and insert12 ing the following:

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

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

15 (5), (8), or (9) of section 523(a);

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

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

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

19 civil action against the debtor as a result of willful

20 or malicious injury by the debtor that caused per21 sonal injury to an individual or the death of an indi22 vidual.’’.

23 SEC. 315. NONDISCHARGEABLE DEBTS.

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

25 amended by inserting after paragraph (14) the following:
89

•S 1301 RS

1 ‘‘(14A) incurred to pay a debt that is non2 dischargeable by reason of section 727, 1141, 1228 (a)

3 or (b), or 1328(b), or any other provision of this sub4 section, except for any debt incurred to pay such a

5 nondischargeable debt in any case in which—

6 ‘‘(A)(i) the debtor who paid the non7 dischargeable debt is a single parent who has 1

8 or more dependent children at the time of the

9 order for relief; or

10 ‘‘(ii) there is an allowed claim for alimony

11 to, maintenance for, or support of a spouse,

12 former spouse, or child of the debtor payable

13 under a judicial or administrative order to that

14 spouse or child (but not to any other person)

15 that was unpaid by the debtor as of the date of

16 the petition; and

17 ‘‘(B) the creditor is unable to demonstrate

18 that the debtor intentionally incurred the debt to

19 pay the nondischargeable debt;’’.

20 SEC. 316. CREDIT EXTENSIONS ON THE EVE OF BANK21 RUPTCY PRESUMED NONDISCHARGEABLE.

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

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

24 (1) in subparagraph (A), by striking the semi25 colon at the end and inserting the following: ‘‘(and,
90

•S 1301 RS

1 for purposes of this subparagraph, consumer debts

2 owed in an aggregate amount greater than or equal

3 to $400 incurred for goods or services not reasonably

4 necessary for the maintenance or support of the debtor

5 or a dependent child of the debtor to a single creditor

6 that are incurred during the 90-day period preceding

7 the date of the order for relief shall be presumed to

8 be nondischargeable under this subparagraph); or’’;

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

10 end; and

11 (3) by striking subparagraph (C).

12 SEC. 317. DEFINITION OF HOUSEHOLD GOODS AND AN13 TIQUES.

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

15 by inserting after paragraph (27) the following:

16 ‘‘(27A) ‘household goods’ has the meaning given

17 that term in section 444.1(i) of title 16, of the Code

18 of Federal Regulations (as in effect on the effective

19 date of this paragraph), which is part of the regula20 tions issued by the Federal Trade Commission that

21 are commonly known as the ‘Trade Regulation Rule

22 on Credit Practices’, except that the term shall also

23 include any tangible personal property reasonably

24 necessary for the maintenance or support of a depend25 ent child;’’.
91

•S 1301 RS

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, United

5 States Code, as amended by section 303, is amended—

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

7 subparagraph (A), by striking ‘‘(e) and (f)’’ and in8 serting ‘‘(e), (f), and (h)’’;

9 (2) by redesignating subsection (h) as subsection

10 (i); and

11 (3) by inserting after subsection (g) the follow12 ing:

13 ‘‘(h) In an individual case under chapter 7, 11, or 13

14 the stay provided by subsection (a) is terminated with re15 spect to property of the estate securing in whole or in part

16 a claim that is in an amount greater than $3,000, or subject

17 to an unexpired lease with a remaining term of at least

18 1 year (in any case in which the debtor owes at least $3,000

19 for a 1-year period), if within 30 days after the expiration

20 of the applicable period under section 521(a)(2)—

21 ‘‘(1)(A) the debtor fails to timely file a statement

22 of intention to surrender or retain the property; or

23 ‘‘(B) if the debtor indicates in the filing that the

24 debtor will retain the property, the debtor fails to

25 meet an applicable requirement to—

26 ‘‘(i) either—
92

•S 1301 RS

1 ‘‘(I) redeem the property pursuant to

2 section 722; or

3 ‘‘(II) reaffirm the debt the property se4 cures pursuant to section 524(c); or

5 ‘‘(ii) assume the unexpired lease pursuant

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

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

8 specified in a statement of intention referred to in

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

10 amended before expiration of the period for taking ac11 tion), unless—

12 ‘‘(A) the statement of intention specifies re13 affirmation; and

14 ‘‘(B) the creditor refuses to reaffirm the debt

15 on the original contract terms for the debt.’’.

16 (b) DEBTOR’S DUTIES.—Section 521(a)(2) of title 11,

17 United States Code, as redesignated by section 301(b) of

18 this Act, is amended—

19 (1) in the matter preceding subparagraph (A),

20 by striking ‘‘consumer’’;

21 (2) in subparagraph (B)—

22 (A) by striking ‘‘forty-five days after the fil23 ing of a notice of intent under this section’’ and

24 inserting ‘‘30 days after the first meeting of

25 creditors under section 341(a)’’; and
93

•S 1301 RS

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

2 inserting ‘‘30-day period’’; and

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

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

5 SEC. 319. ADEQUATE PROTECTION OF LESSORS AND PUR6 CHASE MONEY SECURED CREDITORS.

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

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

9 following:

10 ‘‘§ 1307A. Adequate protection in chapter 13 cases

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

12 the filing of a case under this chapter, the debtor shall make

13 cash payments in an amount determined under paragraph

14 (2)(A), to—

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

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

17 personal property to the extent that the claim is at18 tributable to the purchase of that property by the

19 debtor.

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

21 adequate protection payments until the earlier of the date

22 on which—

23 ‘‘(i) the creditor begins to receive actual pay24 ments under the plan; or
94

•S 1301 RS

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

2 property referred to in subparagraph (A) to—

3 ‘‘(I) the lessor or creditor; or

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

5 right, as applicable.

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

7 shall be determined by the court.

8 ‘‘(b)(1) Subject to the limitations under paragraph (2),

9 the court may, after notice and hearing, change the amount

10 and timing of the dates of payment of payments made

11 under subsection (a).

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

13 shall be payable not less frequently than monthly.

14 ‘‘(B) The amount of a payment referred to in para15 graph (1) shall not be less than the reasonable depreciation

16 of the personal property described in subsection (a)(1), de17 termined on a month-to-month basis.

18 ‘‘(c) Notwithstanding section 1326(b), the payments

19 referred to in subsection (a)(1)(A) shall be continued in ad20 dition to plan payments under a confirmed plan until ac21 tual payments to the creditor begin under that plan, if the

22 confirmed plan provides—

23 ‘‘(1) for payments to a creditor or lessor de24 scribed in subsection (a)(1); and
95

•S 1301 RS

1 ‘‘(2) for the deferral of payments to such creditor

2 or lessor under the plan until the payment of

3 amounts described in section 1326(b).

4 ‘‘(d) Notwithstanding sections 362, 542, and 543, a les5 sor or creditor described in subsection (a) may retain pos6 session of property described in that subsection that was

7 obtained in accordance with applicable law before the date

8 of filing of the petition until the first payment under sub9 section (a)(1)(A) is received by the lessor or creditor.’’.

10 (b) CLERICAL AMENDMENT.—The table of sections at

11 the beginning of chapter 13 of title 11, United States Code,

12 is amended by inserting after the item relating to section

13 1307 the following:

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

14 SEC. 320. LIMITATION.

15 Section 522 of title 11, United States Code, is amend16 ed—

17 (1) in subsection (b)(2)(A), by inserting ‘‘subject

18 to subsection (n),’’ before ‘‘any property’’; and

19 (2) by adding at the end the following new sub20 section:

21 ‘‘(n)(1) Except as provided in paragraph (2), as a re22 sult of electing under subsection (b)(2)(A) to exempt prop23 erty under State or local law, a debtor may not exempt

24 any amount of interest that exceeds in the aggregate

25 $100,000 in value in—
96

•S 1301 RS

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

2 a dependent of the debtor uses as a residence;

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

4 debtor or a dependent of the debtor uses as a resi5 dence; or

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

7 of the debtor.

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

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

10 by a family farmer for the principal residence of that farm11 er.’’.

12 SEC. 321. MISCELLANEOUS IMPROVEMENTS.

13 (a) WHO MAY BE A DEBTOR.—Section 109 of title 11,

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

15 following:

16 ‘‘(h) Notwithstanding any other provision of this sec17 tion, an individual may not be a debtor under this title

18 unless that individual has, during the 90-day period pre19 ceding the date of filing of the petition of that individual,

20 made a good-faith attempt to create a debt repayment plan

21 outside the judicial system for bankruptcy law (commonly

22 referred to as the ‘bankruptcy system’), through a credit

23 counseling program (offered through credit counseling serv24 ices described in section 111(a)) that has been approved

25 by—
97

•S 1301 RS

1 ‘‘(1) the United States trustee; or

2 ‘‘(2) the bankruptcy administrator for the dis3 trict in which the petition is filed.’’.

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

5 11, United States Code, is amended—

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

7 end;

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

9 and inserting ‘‘; or’’; and

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

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

12 failed to complete an instructional course concerning

13 personal financial management described in section

14 111 that was administered or approved by—

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

16 ‘‘(B) the bankruptcy administrator for the

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

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

19 11, United States Code, is amended by adding at the end

20 the following:

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

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

23 has completed an instructional course concerning personal

24 financial management described in section 111 that was ad25 ministered or approved by—
98

•S 1301 RS

1 ‘‘(1) the United States trustee; or

2 ‘‘(2) the bankruptcy administrator for the dis3 trict in which the petition is filed.’’.

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

5 United States Code, as amended by sections 301(b) and

6 318(b) of this Act, is amended by adding at the end the

7 following:

8 ‘‘(e) In addition to the requirements under subsection

9 (a), an individual debtor shall file with the court—

10 ‘‘(1) a certificate from the credit counseling serv11 ice that provided the debtor services under section

12 109(h) or other substantial evidence of a good-faith

13 attempt to create a debt repayment plan outside the

14 bankruptcy system in the manner prescribed in sec15 tion 109(h); and

16 ‘‘(2) a copy of the debt repayment plan developed

17 under section 109(h) through the credit counseling

18 service referred to in paragraph (1).’’.

19 (e) EXCEPTIONS TO DISCHARGE.—Section 523(d) of

20 title 11, United States Code, as amended by section 202

21 of this Act, is amended by striking paragraph (3)(A)(i) and

22 inserting the following:

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

24 made a good faith attempt pursuant to section 109(h)

25 to negotiate a reasonable alternative repayment sched-
99

•S 1301 RS

1 ule (including making an offer of a reasonable alter2 native repayment schedule); and’’.

3 (f) GENERAL PROVISIONS.—

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

5 States Code, is amended by adding at the end the fol6 lowing:

7 ‘‘§ 111. Credit counseling services; financial manage8 ment instructional courses

9 ‘‘(a) The clerk of each district shall maintain a list

10 of credit counseling services that provide 1 or more pro11 grams described in section 109(h) and that have been ap12 proved by—

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

14 ‘‘(2) the bankruptcy administrator for the dis15 trict.

16 ‘‘(b) The United States trustee or each bankruptcy ad17 ministrator referred to in subsection (a)(1) shall—

18 ‘‘(1) make available to debtors who are individ19 uals an instructional course concerning personal fi20 nancial management, under the direction of the bank21 ruptcy court; and

22 ‘‘(2) maintain a list of instructional courses con23 cerning personal financial management that are oper24 ated by a private entity and that have been approved
100

•S 1301 RS

1 by the United States trustee or that bankruptcy ad2 ministrator.’’.

3 (2) CLERICAL AMENDMENT.—The table of sec4 tions at the beginning of chapter 1 of title 11, United

5 States Code, is amended by adding at the end the fol6 lowing:

‘‘111. Credit counseling services; financial management instructional courses.’’.

7 (g) DEFINITIONS.—Section 101 of title 11, United

8 States Code, as amended by section 317 of this Act, is

9 amended—

10 (1) by inserting after paragraph (13) the follow11 ing:

12 ‘‘(13A) ‘debtor’s principal residence’—

13 ‘‘(A) means a residential structure, includ14 ing incidental property, without regard to

15 whether that structure is attached to real prop16 erty; and

17 ‘‘(B) includes an individual condominium

18 or co-operative unit;’’; and

19 (2) by inserting after paragraph (27A), as added

20 by section 318 of this Act, the following:

21 ‘‘(27B) ‘incidental property’ means, with respect

22 to a debtor’s principal residence—

23 ‘‘(A) property commonly conveyed with a

24 principal residence in the area where the real es25 tate is located;
101

•S 1301 RS

1 ‘‘(B) all easements, rights, appurtenances,

2 fixtures, rents, royalties, mineral rights, oil or

3 gas rights or profits, water rights, escrow funds,

4 or insurance proceeds; and

5 ‘‘(C) all replacements or additions;’’.

6 SEC. 322. BANKRUPTCY JUDGESHIPS.

7 (a) SHORT TITLE.—This section may be cited as the

8 ‘‘Bankruptcy Judgeship Act of 1998’’.

9 (b) TEMPORARY JUDGESHIPS.—

10 (1) APPOINTMENTS.—The following judgeship

11 positions shall be filled in the manner prescribed in

12 section 152(a)(1) of title 28, United States Code, for

13 the appointment of bankruptcy judges provided for in

14 section 152(a)(2) of such title:

15 (A) One additional bankruptcy judgeship

16 for the eastern district of California.

17 (B) Four additional bankruptcy judgeships

18 for the central district of California.

19 (C) One additional bankruptcy judgeship

20 for the southern district of Florida.

21 (D) Two additional bankruptcy judgeships

22 for the district of Maryland.

23 (E) One additional bankruptcy judgeship

24 for the eastern district of Michigan.
102

•S 1301 RS

1 (F) One additional bankruptcy judgeship

2 for the southern district of Mississippi.

3 (G) One additional bankruptcy judgeship

4 for the district of New Jersey.

5 (H) One additional bankruptcy judgeship

6 for the eastern district of New York.

7 (I) One additional bankruptcy judgeship for

8 the northern district of New York.

9 (J) One additional bankruptcy judgeship

10 for the southern district of New York.

11 (K) One additional bankruptcy judgeship

12 for the eastern district of Pennsylvania.

13 (L) One additional bankruptcy judgeship

14 for the middle district of Pennsylvania.

15 (M) One additional bankruptcy judgeship

16 for the western district of Tennessee.

17 (N) One additional bankruptcy judgeship

18 for the eastern district of Virginia.

19 (2) VACANCIES.—The first vacancy occurring in

20 the office of a bankruptcy judge in each of the judicial

21 districts set forth in paragraph (1) that—

22 (A) results from the death, retirement, res23 ignation, or removal of a bankruptcy judge; and
103

•S 1301 RS

1 (B) occurs 5 years or more after the ap2 pointment date of a bankruptcy judge appointed

3 under paragraph (1);

4 shall not be filled.

5 (c) EXTENSIONS.—

6 (1) IN GENERAL.—The temporary bankruptcy

7 judgeship positions authorized for the northern dis8 trict of Alabama, the district of Delaware, the district

9 of Puerto Rico, the district of South Carolina, and the

10 eastern district of Tennessee under section 3(a) (1),

11 (3), (7), (8), and (9) of the Bankruptcy Judgeship Act

12 of 1992 (28 U.S.C. 152 note) are extended until the

13 first vacancy occurring in the office of a bankruptcy

14 judge in the applicable district resulting from the

15 death, retirement, resignation, or removal of a bank16 ruptcy judge and occurring—

17 (A) 8 years or more after November 8, 1993,

18 with respect to the northern district of Alabama;

19 (B) 10 years or more after October 28,

20 1993, with respect to the district of Delaware;

21 (C) 8 years or more after August 29, 1994,

22 with respect to the district of Puerto Rico;

23 (D) 8 years or more after June 27, 1994,

24 with respect to the district of South Carolina;

25 and
104

•S 1301 RS

1 (E) 8 years or more after November 23,

2 1993, with respect to the eastern district of Ten3 nessee.

4 (2) APPLICABILITY OF OTHER PROVISIONS.—All

5 other provisions of section 3 of the Bankruptcy Judge6 ship Act of 1992 remain applicable to such temporary

7 judgeship position.

8 (d) TECHNICAL AMENDMENT.—The first sentence of

9 section 152(a)(1) of title 28, United States Code, is amend10 ed to read as follows: ‘‘Each bankruptcy judge to be ap11 pointed for a judicial district as provided in paragraph (2)

12 shall be appointed by the United States court of appeals

13 for the circuit in which such district is located.’’.

14 (e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—

15 Section 156 of title 28, United States Code, is amended by

16 adding at the end the following new subsection:

17 ‘‘(g)(1) In this subsection, the term ‘travel expenses’—

18 ‘‘(A) means the expenses incurred by a bank19 ruptcy judge for travel that is not directly related to

20 any case assigned to such bankruptcy judge; and

21 ‘‘(B) shall not include the travel expenses of a

22 bankruptcy judge if—

23 ‘‘(i) the payment for the travel expenses is

24 paid by such bankruptcy judge from the personal

25 funds of such bankruptcy judge; and
105

•S 1301 RS

1 ‘‘(ii) such bankruptcy judge does not receive

2 funds (including reimbursement) from the

3 United States or any other person or entity for

4 the payment of such travel expenses.

5 ‘‘(2) Each bankruptcy judge shall annually submit the

6 information required under paragraph (3) to the chief

7 bankruptcy judge for the district in which the bankruptcy

8 judge is assigned.

9 ‘‘(3)(A) Each chief bankruptcy judge shall submit an

10 annual report to the Director of the Administrative Office

11 of the United States Courts on the travel expenses of each

12 bankruptcy judge assigned to the applicable district (in13 cluding the travel expenses of the chief bankruptcy judge

14 of such district).

15 ‘‘(B) The annual report under this paragraph shall in16 clude—

17 ‘‘(i) the travel expenses of each bankruptcy judge,

18 with the name of the bankruptcy judge to whom the

19 travel expenses apply;

20 ‘‘(ii) a description of the subject matter and pur21 pose of the travel relating to each travel expense iden22 tified under clause (i), with the name of the bank23 ruptcy judge to whom the travel applies; and
106

•S 1301 RS

1 ‘‘(iii) the number of days of each travel described

2 under clause (ii), with the name of the bankruptcy

3 judge to whom the travel applies.

4 ‘‘(4)(A) The Director of the Administrative Office of

5 the United States Courts shall—

6 ‘‘(i) consolidate the reports submitted under

7 paragraph (3) into a single report; and

8 ‘‘(ii) annually submit such consolidated report to

9 Congress.

10 ‘‘(B) The consolidated report submitted under this

11 paragraph shall include the specific information required

12 under paragraph (3)(B), including the name of each bank13 ruptcy judge with respect to clauses (i), (ii), and (iii) of

14 paragraph (3)(B).’’.

15 SEC. 323. PREFERRED PAYMENT OF CHILD SUPPORT IN

16 CHAPTER 7 PROCEEDINGS.

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

18 amended in the matter preceding paragraph (1), by insert19 ing ‘‘, except that, notwithstanding any other provision of

20 this title, any expense or claim entitled to priority under

21 paragraph (7) shall have first priority over any other ex22 pense or claim that has priority under any other provision

23 of this subsection’’ before the colon.
107

•S 1301 RS

1 SEC. 324. PREFERRED PAYMENT OF CHILD SUPPORT IN

2 CHAPTER 13 PROCEEDINGS.

3 Section 1322(b)(1) of title 11, United States Code, is

4 amended by striking the semicolon at the end and inserting

5 the following: ‘‘and provide for the payment of any claim

6 entitled to priority under section 507(a)(7) before the pay7 ment of any other claim entitled to priority under section

8 507(a), notwithstanding the priorities established under sec9 tion 507(a).’’.

10 SEC. 325. PAYMENT OF CHILD SUPPORT REQUIRED TO OB11 TAIN A DISCHARGE IN CHAPTER 13 PROCEED12 INGS.

13 Title 11, United States Code, is amended—

14 (1) in section 1325(a)—

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

16 the end;

17 (B) in paragraph (6), by striking the period

18 at the end and inserting ‘‘; and’’; and

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

20 ‘‘(7) if the debtor is required by a judicial or ad21 ministrative order to pay alimony to, maintenance

22 for, or support of a spouse, former spouse, or child of

23 the debtor, the debtor has paid all amounts payable

24 under that order for alimony, maintenance, or sup25 port that are due after the date on which the petition

26 is filed.’’; and
108

•S 1301 RS

1 (2) in section 1328(a), as amended by section

2 314 of this Act, in the matter preceding paragraph

3 (1), by inserting ‘‘, and with respect to a debtor who

4 is required by a judicial or administrative order to

5 pay alimony to, maintenance for, or support of a

6 spouse, former spouse, or child of the debtor, only

7 after the debtor certifies as of the later of the date of

8 that completion or the date of certification that all

9 amounts payable under that order for alimony, main10 tenance, or support that are due before the date of

11 that certification have been paid in accordance with

12 the plan if applicable, or if the underlying debt is not

13 treated by the plan, paid in full’’ after ‘‘completion

14 by the debtor of all payments under the plan’’.

15 SEC. 326. CHILD SUPPORT AND ALIMONY COLLECTION.

16 Section 362(b) of title 11, United States Code, is

17 amended—

18 (1) in paragraph (17), by striking ‘‘or’’ at the

19 end;

20 (2) in paragraph (18), by striking the period at

21 the end and inserting a semicolon; and

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

23 ‘‘(19) under subsection (a) with respect to the

24 withholding of income pursuant to an order as speci-
109

•S 1301 RS

1 fied in section 466(b) of the Social Security Act (42

2 U.S.C. 666(b)); or

3 ‘‘(20) under subsection (a) with respect to the

4 withholding, suspension, or restriction of drivers’ li5 censes, professional and occupational licenses, and

6 recreational licenses pursuant to State law, as speci7 fied in section 466(a)(15) of the Social Security Act

8 (42 U.S.C. 666(a)(15)) or with respect to the report9 ing of overdue support owed by an absent parent to

10 any consumer reporting agency as specified in section

11 466(a)(7) of the Social Security Act (42 U.S.C.

12 666(a)(7)).’’.

13 SEC. 327. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR

14 ALIMONY, MAINTENANCE, AND SUPPORT.

15 Section 523 of title 11, United States Code, as amend16 ed by section 202 of this Act, is amended—

17 (1) in subsection (a), by striking paragraph (5)

18 and inserting the following:

19 ‘‘(5) to a spouse, former spouse, or child of the

20 debtor—

21 ‘‘(A) for actual alimony to, maintenance

22 for, or support of that spouse or child;

23 ‘‘(B) that was incurred by the debtor in the

24 course of a divorce or separation or in connec25 tion with a separation agreement, property set-
110

•S 1301 RS

1 tlement agreement, divorce decree, other order of

2 a court of record, or determination made in ac3 cordance with State or territorial law by a gov4 ernmental unit; or

5 ‘‘(C) that is described in subparagraph (A)

6 or (B) and that is assigned pursuant to section

7 408(a)(3) of the Social Security Act (42 U.S.C.

8 608(a)(3)), or to the Federal Government, a

9 State, or any political subdivision of a State,

10 but not to the extent that the debt (other than a debt

11 described in subparagraph (C)) is assigned to another

12 entity, voluntarily, by operation of law, or other13 wise;’’; and

14 (2) in subsection (c), by striking ‘‘(6), or (15)’’

15 and inserting ‘‘or (6)’’.

16 SEC. 328. ENFORCEMENT OF CHILD AND SPOUSAL SUP17 PORT.

18 Section 522(c)(1) of title 11, United States Code, is

19 amended by inserting ‘‘, except that, notwithstanding any

20 other Federal law or State law relating to exempted prop21 erty, such exempt property shall be liable for debts of a kind

22 specified in paragraph (1) or (5) of section 523(a)’’ before

23 the semicolon at the end of the paragraph.
111

•S 1301 RS

1 SEC. 329. DEPENDENT CHILD DEFINED.

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

3 by inserting after paragraph (14) the following:

4 ‘‘(14A) ‘dependent child’ means, with respect to

5 an individual, a child who has not attained the age

6 of 18 and who is a dependent of that individual,

7 within the meaning of section 152 of the Internal

8 Revenue Code;’’.

9 TITLE IV—TECHNICAL

10 CORRECTIONS

11 SEC. 401. DEFINITIONS.

12 Section 101 of title 11, United States Code, as amend13 ed by section 317, is amended—

14 (1) by striking ‘‘In this title—’’ and inserting

15 ‘‘In this title:’’;

16 (2) in each paragraph, by inserting ‘‘The term’’

17 after the paragraph designation;

18 (3) in paragraph (35)(B), by striking ‘‘para19 graphs (21B) and (33)(A)’’ and inserting ‘‘para20 graphs (23) and (35)’’;

21 (4) in each of paragraphs (35A) and (38), by

22 striking ‘‘; and’’ at the end and inserting a period;

23 (5) in paragraph (51B)—

24 (A) by inserting ‘‘who is not a family farm25 er’’ after ‘‘debtor’’ the first place it appears; and
112

•S 1301 RS

1 (B) by striking ‘‘thereto having aggregate’’

2 and all that follows through the end of the para3 graph;

4 (6) by amending paragraph (54) to read as fol5 lows:

6 ‘‘(54) The term ‘transfer’ means—

7 ‘‘(A) the creation of a lien;

8 ‘‘(B) the retention of title as a security in9 terest;

10 ‘‘(C) the foreclosure of a debtor’s equity of

11 redemption; or

12 ‘‘(D) each mode, direct or indirect, absolute

13 or conditional, voluntary or involuntary, of dis14 posing of or parting with—

15 ‘‘(i) property; or

16 ‘‘(ii) an interest in property;’’;

17 (7) in each of paragraphs (1) through (35), in

18 each of paragraphs (36) and (37), and in each of

19 paragraphs (40) through (56A) (including paragraph

20 (54), as amended by paragraph (6) of this section),

21 by striking the semicolon at the end and inserting a

22 period; and

23 (8) by redesignating paragraphs (4) through

24 (56A) in entirely numerical sequence, so as to result
113

•S 1301 RS

1 in numerical paragraph designations of (4) through

2 (72), respectively.

3 SEC. 402. ADJUSTMENT OF DOLLAR AMOUNTS.

4 Section 104 of title 11, United States Code, is amended

5 by inserting ‘‘522(f)(3), 707(b)(5),’’ after ‘‘522(d),’’ each

6 place it appears.

7 SEC. 403. 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. 404. 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. 405. 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

19 ‘‘attorneys’ ’’.

20 SEC. 406. 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,’’.
114

•S 1301 RS

1 SEC. 407. 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. 408. 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. 409. AUTOMATIC STAY.

10 Section 362(b) of title 11, United States Code, as

11 amended by section 326 of this Act, is amended—

12 (1) in paragraph (19), by striking ‘‘or’’ at the

13 end;

14 (2) in paragraph (20), by striking the period at

15 the end and inserting a semicolon; and

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

17 ‘‘(21) under subsection (a) of this section of any

18 transfer that is not avoidable under section 544 and

19 that is not avoidable under section 549;

20 ‘‘(22) under subsection (a)(3) of this section, of

21 the continuation of any eviction, unlawful detainer

22 action, or similar proceeding by a lessor against a

23 debtor involving residential real property in which

24 the debtor resides as a tenant under a rental agree25 ment; or
115

•S 1301 RS

1 ‘‘(23) under subsection (a)(3) of this section, of

2 the commencement of any eviction, unlawful detainer

3 action, or similar proceeding by a lessor against a

4 debtor involving residential real property in which

5 the debtor resides as a tenant under a rental agree6 ment that has terminated.’’.

7 SEC. 410. AMENDMENT TO TABLE OF SECTIONS.

8 The table of sections for chapter 5 of title 11, United

9 States Code, is amended by striking the item relating to

10 section 556 and inserting the following:

‘‘556. Contractual right to liquidate a commodities contract or forward contract.’’.

11 SEC. 411. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

12 Section 503(b)(4) of title 11, United States Code, is

13 amended by inserting ‘‘subparagraph (A), (B), (C), (D), or

14 (E) of’’ before ‘‘paragraph (3)’’.

15 SEC. 412. PRIORITIES.

16 Section 507(a) of title 11, United States Code, as

17 amended by section 323 of this Act, is amended—

18 (1) in paragraph (3)(B), by striking the semi19 colon at the end and inserting a period; and

20 (2) in paragraph (7), by inserting ‘‘unsecured’’

21 after ‘‘allowed’’.

22 SEC. 413. EXEMPTIONS.

23 Section 522 of title 11, United States Code, as amend24 ed by section 320 of this Act, is amended—

25 (1) in subsection (f)(1)(A)(ii)(II)—
116

•S 1301 RS

1 (A) by striking ‘‘includes a liability des2 ignated as’’ and inserting ‘‘is for a liability that

3 is designated as, and is actually in the nature

4 of,’’; and

5 (B) by striking ‘‘, unless’’ and all that fol6 lows through ‘‘support’’; and

7 (2) in subsection (g)(2), by striking ‘‘subsection

8 (f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.

9 SEC. 414. EXCEPTIONS TO DISCHARGE.

10 Section 523 of title 11, United States Code, is amend11 ed—

12 (1) in subsection (a)(3), by striking ‘‘or (6)’’

13 each place it appears and inserting ‘‘(6), or (15)’’;

14 (2) as amended by section 304(e) of Public Law

15 103–394 (108 Stat. 4133), in paragraph (15), by

16 transferring such paragraph so as to insert it after

17 paragraph (14) of subsection (a);

18 (3) in subsection (a)(9), by inserting

19 ‘‘, watercraft, or aircraft’’ after ‘‘motor vehicle’’;

20 (4) in subsection (a)(15), as so redesignated by

21 paragraph (2) of this subsection, by inserting ‘‘to a

22 spouse, former spouse, or child of the debtor and’’

23 after ‘‘(15)’’;

24 (5) in subsection (a)(17)—
117

•S 1301 RS

1 (A) by striking ‘‘by a court’’ and inserting

2 ‘‘on a prisoner by any court’’;

3 (B) by striking ‘‘section 1915 (b) or (f)’’

4 and inserting ‘‘subsection (b) or (f)(2) of section

5 1915’’; and

6 (C) by inserting ‘‘(or a similar non-Federal

7 law)’’ after ‘‘title 28’’ each place it appears; and

8 (6) in subsection (e), by striking ‘‘a insured’’

9 and inserting ‘‘an insured’’.

10 SEC. 415. EFFECT OF DISCHARGE.

11 Section 524(a)(3) of title 11, United States Code, is

12 amended by striking ‘‘section 523’’ and all that follows

13 through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),

14 or 1328(a)(1) of this title, or that’’.

15 SEC. 416. PROTECTION AGAINST DISCRIMINATORY TREAT16 MENT.

17 Section 525(c) of title 11, United States Code, is

18 amended—

19 (1) in paragraph (1), by inserting ‘‘student’’ be20 fore ‘‘grant’’ the second place it appears; and

21 (2) in paragraph (2), by striking ‘‘the program

22 operated under part B, D, or E of’’ and inserting

23 ‘‘any program operated under’’.
118

•S 1301 RS

1 SEC. 417. PROPERTY OF THE ESTATE.

2 Section 541(b)(4) of title 11, United States Code, is

3 amended—

4 (1) in subparagraph (B)(ii), by inserting ‘‘365

5 or’’ before ‘‘542’’; and

6 (2) by adding ‘‘or’’ at the end.

7 SEC. 418. LIMITATIONS ON AVOIDING POWERS.

8 Section 546 of title 11, United States Code, is amended

9 by redesignating the second subsection (g) (as added by sec10 tion 222(a) of the Bankruptcy Reform Act of 1994; 108

11 Stat. 4129) as subsection (h).

12 SEC. 419. PREFERENCES.

13 Section 547 of title 11, United States Code, is amend14 ed—

15 (1) in subsection (b), by striking ‘‘subsection (c)’’

16 and inserting ‘‘subsections (c) and (h)’’; and

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

18 ‘‘(h) If the trustee avoids under subsection (b) a secu19 rity interest given between 90 days and 1 year before the

20 date of the filing of the petition, by the debtor to an entity

21 that is not an insider for the benefit of a creditor that is

22 an insider, such security interest shall be considered to be

23 avoided under this section only with respect to the creditor

24 that is an insider.’’.
119

•S 1301 RS

1 SEC. 420. POSTPETITION TRANSACTIONS.

2 Section 549(c) of title 11, United States Code, is

3 amended—

4 (1) by inserting ‘‘an interest in’’ after ‘‘transfer

5 of’’;

6 (2) by striking ‘‘such property’’ and inserting

7 ‘‘such real property’’; and

8 (3) by striking ‘‘the interest’’ and inserting

9 ‘‘such interest’’.

10 SEC. 421. TECHNICAL AMENDMENT.

11 Section 552(b)(1) of title 11, United States Code, is

12 amended by striking ‘‘product’’ each place it appears and

13 inserting ‘‘products’’.

14 SEC. 422. SETOFF.

15 Section 553(b)(1) of title 11, United States Code, is

16 amended by striking ‘‘362(b)(14)’’ and inserting

17 ‘‘362(b)(17)’’.

18 SEC. 423. DISPOSITION OF PROPERTY OF THE ESTATE.

19 Section 726(b) of title 11, United States Code, is

20 amended by striking ‘‘1009,’’.

21 SEC. 424. GENERAL PROVISIONS.

22 Section 901(a) of title 11, United States Code, is

23 amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.

24 SEC. 425. APPOINTMENT OF ELECTED TRUSTEE.

25 Section 1104(b) of title 11, United States Code, is

26 amended—
120

•S 1301 RS

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

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

3 ‘‘(2)(A) If an eligible, disinterested trustee is elected

4 at a meeting of creditors under paragraph (1), the United

5 States trustee shall file a report certifying that election.

6 Upon the filing of a report under the preceding sentence—

7 ‘‘(i) the trustee elected under paragraph (1) shall

8 be considered to have been selected and appointed for

9 purposes of this section; and

10 ‘‘(ii) the service of any trustee appointed under

11 subsection (d) shall terminate.

12 ‘‘(B) In the case of any dispute arising out of an elec13 tion under subparagraph (A), the court shall resolve the dis14 pute.’’.

15 SEC. 426. ABANDONMENT OF RAILROAD LINE.

16 Section 1170(e)(1) of title 11, United States Code, is

17 amended by striking ‘‘section 11347’’ and inserting ‘‘section

18 11326(a)’’.

19 SEC. 427. CONTENTS OF PLAN.

20 Section 1172(c)(1) of title 11, United States Code, is

21 amended by striking ‘‘section 11347’’ and inserting ‘‘section

22 11326(a)’’.
121

•S 1301 RS

1 SEC. 428. DISCHARGE UNDER CHAPTER 12.

2 Subsections (a) and (c) of section 1228 of title 11,

3 United States Code, are amended by striking ‘‘1222(b)(10)’’

4 each place it appears and inserting ‘‘1222(b)(9)’’.

5 SEC. 429. EXTENSIONS.

6 Section 302(d)(3) of the Bankruptcy, Judges, United

7 States Trustees, and Family Farmer Bankruptcy Act of

8 1986 (28 U.S.C. 581 note) is amended—

9 (1) in subparagraph (A), in the matter following

10 clause (ii), by striking ‘‘or October 1, 2002, whichever

11 occurs first’’; and

12 (2) in subparagraph (F)—

13 (A) in clause (i)—

14 (i) in subclause (II), by striking ‘‘or

15 October 1, 2002, whichever occurs first’’;

16 and

17 (ii) in the matter following subclause

18 (II), by striking ‘‘October 1, 2003, or’’; and

19 (B) in clause (ii), in the matter following

20 subclause (II)—

21 (i) by striking ‘‘before October 1, 2003,

22 or’’; and

23 (ii) by striking ‘‘, whichever occurs

24 first’’.
122

•S 1301 RS

1 SEC. 430. BANKRUPTCY CASES AND PROCEEDINGS.

2 Section 1334(d) of title 28, United States Code, is

3 amended—

4 (1) by striking ‘‘made under this subsection’’ and

5 inserting ‘‘made under subsection (c)’’; and

6 (2) by striking ‘‘This subsection’’ and inserting

7 ‘‘Subsection (c) and this subsection’’.

8 SEC. 431. KNOWING DISREGARD OF BANKRUPTCY LAW OR

9 RULE.

10 Section 156(a) of title 18, United States Code, is

11 amended—

12 (1) in the first undesignated paragraph—

13 (A) by inserting ‘‘(1) the term’’ before

14 ‘‘ ‘bankruptcy’’; and

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

16 inserting ‘‘; and’’; and

17 (2) in the second undesignated paragraph—

18 (A) by inserting ‘‘(2) the term’’ before ‘‘ ‘doc19 ument’’; and

20 (B) by striking ‘‘this title’’ and inserting

21 ‘‘title 11’’.

22 SEC. 432. EFFECTIVE DATE; APPLICATION OF AMEND23 MENTS.

24 (a) EFFECTIVE DATE.—Except as provided in sub25 section (b), this title and the amendments made by this title

26 shall take effect on the date of enactment of this Act.
123

•S 1301 RS

1 (b) APPLICATION OF AMENDMENTS.—The amendments

2 made by this title shall apply only with respect to cases

3 commenced under title 11, United States Code, on or after

4 the date of enactment of this Act.