II 

Calendar No. 963 

110TH CONGRESS 

2D SESSION S. 3197 

A bill to amend title 11, United States Code, to exempt for a limited 

period, from the application of the means-test presumption of abuse 

under chapter 7, qualifying members of reserve components of the Armed 

Forces and members of the National Guard who, after September 11, 

2001, are called to active duty or to perform a homeland defense activity 

for not less than 90 days. 

IN THE SENATE OF THE UNITED STATES 

JUNE 25, 2008 

Mr. DURBIN (for himself, Mr. LEAHY, and Mr. HATCH) introduced the following bill; which was read twice and referred to the Committee on the 

Judiciary 

SEPTEMBER 15, 2008 

Reported by Mr. LEAHY, with an amendment 

[Omit the part struck through and insert the part printed in italic] 

A BILL 

A bill to amend title 11, United States Code, to exempt 

for a limited period, from the application of the meanstest presumption of abuse under chapter 7, qualifying 

members of reserve components of the Armed Forces 

and members of the National Guard who, after September 11, 2001, are called to active duty or to perform 

a homeland defense activity for not less than 90 days. 


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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 ‘‘National Guard and 

5 Reservists Debt Relief Act of 2008’’. 

6 SEC. 2. AMENDMENTS. 

7 Section 707(b)(2)(D) of title 11, United States Code, 

8 is amended— 

9 (1) in each of clauses (i) and (ii)— 

10 (A) by indenting the left margins of such 

11 clauses 2 ems to the right; and 

12 (B) by redesignating such clauses as sub13 clauses (I) and (II), respectively; 

14 (2) by striking ‘‘if the debtor is a disabled vet15 eran’’ and inserting the following: 

16 ‘‘if— 

17 ‘‘(i) the debtor is a disabled veteran’’; 

18 (3) by striking the period at the end and insert19 ing ‘‘; or’’; and 

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

21 ‘‘(ii) while— 

22 ‘‘(I) the debtor is— 

23 ‘‘(aa) on, and during the 540-day pe24 riod beginning immediately after the debt25 or is released from, a period of active duty 


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1 (as defined in section 101(d)(1) of title 10) 

2 of not less than 90 days; or 

3 ‘‘(bb) performing, and during the 

4 540-day period beginning immediately 

5 after the debtor is no longer performing, a 

6 homeland defense activity (as defined in 

7 section 901(1) of title 32) performed for a 

8 period of not less than 90 days; and 

9 ‘‘(II) if, after September 11, 2001, the 

10 debtor while a member of a reserve component 

11 of the Armed Forces or a member of the Na12 tional Guard, was called to such active duty or 

13 performed such homeland defense activity.’’. 

14 (1) in clauses (i) and (ii)— 

15 (A) by indenting the left margin of such 

16 clauses 2 ems to the right, and 

17 (B) by redesignating such clauses as sub18 clauses (I) and (II), respectively, 

19 (2) by striking ‘‘testing, if the debtor is a dis20 abled veteran’’ and inserting the following: 

21 ‘‘testing— 

22 ‘‘(i) if the debtor is a disabled veteran’’, 

23 (3) by striking the period at the end and insert24 ing ‘‘; or’’, and 

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


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1 ‘‘(ii) with respect to the debtor, while the debtor 

2 is— 

3 ‘‘(I) on, and during the 540-day period be4 ginning immediately after the debtor is released 

5 from, a period of active duty (as defined in sec6 tion 101(d)(1) of title 10) of not less than 90 

7 days; or 

8 ‘‘(II) performing, and during the 540-day 

9 period beginning immediately after the debtor is 

10 no longer performing, a homeland defense activ11 ity (as defined in section 901(1) of title 32) per12 formed for a period of not less than 90 days; 

13 if after September 11, 2001, the debtor while a mem14 ber of a reserve component of the Armed Forces or a 

15 member of the National Guard, was called to such ac16 tive duty or performed such homeland defense activ17 ity.’’. 

18 SEC. 3. GAO STUDY. 

19 (a) COMPTROLLER GENERAL STUDY.—Not later 

20 than 2 years after the effective date of this Act, the Comp21 troller General shall complete and transmit to the Speaker 

22 of the House of Representatives and the President pro 

23 tempore of the Senate, a study of the use and the effects 

24 of the provisions of law amended (and as amended) by 

25 this Act. Such study shall address, at a minimum— 


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1 (1) whether and to what degree members of re2 serve components of the Armed Forces and members 

3 of the National Guard avail themselves of the bene4 fits of such provisions, 

5 (2) whether and to what degree such members 

6 are debtors in cases under title 11 of the United 

7 States Code that are substantially related to service 

8 that qualifies such members for the benefits of such 

9 provisions, 

10 (3) whether and to what degree such members 

11 are debtors in cases under such title that are materi12 ally related to such service, and 

13 (4) the effects that the use by such members of 

14 section 707(b)(2)(D) of such title, as amended by 

15 this Act, has on the bankruptcy system, creditors, 

16 and the debt-incurrence practices of such members. 

17 (b) FACTORS.—For purposes of subsection (a)— 

18 (1) a case shall be considered to be substan19 tially related to the service of a member of a reserve 

20 component of the Armed Forces or a member of the 

21 National Guard that qualifies such member for the 

22 benefits of the provisions of law amended (and as 

23 amended) by this Act if more than 33 percent of the 

24 aggregate amount of the debts in such case is in25 curred as a direct or indirect result of such service, 


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1 (2) a case shall be considered to be materially 

2 related to the service of a member of a reserve com3 ponent of the Armed Forces or a member of the Na4 tional Guard that qualifies such member for the ben5 efits of such provisions if more than 10 percent of 

6 the aggregate amount of the debts in such case is 

7 incurred as a direct or indirect result of such serv8 ice, and 

9 (3) the term ‘‘effects’’ means— 

10 (A) with respect to the bankruptcy system 

11 and creditors— 

12 (i) the number of cases under title 11 

13 of the United States Code in which mem14 bers of reserve components of the Armed 

15 Forces and members of the National 

16 Guard avail themselves of the benefits of 

17 such provisions, 

18 (ii) the aggregate amount of debt in 

19 such cases, 

20 (iii) the aggregate amount of debt of 

21 such members discharged in cases under 

22 chapter 7 of such title, 

23 (iv) the aggregate amount of debt of 

24 such members in cases under chapter 7 of 

25 such title as of the time such cases are 


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1 converted to cases under chapter 13 of 

2 such title, 

3 (v) the amount of resources expended 

4 by the bankruptcy courts and by the bank5 ruptcy trustees, stated separately, in cases 

6 under title 11 of the United States Code in 

7 which such members avail themselves of 

8 the benefits of such provisions, and 

9 (vi) whether and to what extent there 

10 is any indicia of abuse or potential abuse 

11 of such provisions, and 

12 (B) with respect to debt-incurrence prac13 tices— 

14 (i) any increase in the average levels 

15 of debt incurred by such members before, 

16 during, or after such service, 

17 (ii) any indicia of changes in debt-in18 currence practices adopted by such mem19 bers in anticipation of benefitting from 

20 such provisions in any potential case under 

21 such title; and 

22 (iii) any indicia of abuse or potential 

23 abuse of such provisions reflected in the 

24 debt-incurrence of such members. 


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1 SEC. 4. EFFECTIVE DATE; APPLICATION OF AMENDMENTS. 

2 (a) EFFECTIVE DATE.—Except as provided in sub3 section (b), this Act and the amendments made by this 

4 Act shall take effect 60 days after the date of enactment 

5 of this Act. 

6 (b) APPLICATION OF AMENDMENTS.—The amend7 ments made by this Act shall apply only with respect to 

8 cases commenced under title 11 of the United States Code 

9 in the 3-year period beginning on the effective date of this 

10 Act. 


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Calendar No. 963 

110TH CONGRESS 

2D SESSION S. 3197 

A BILL 

A bill to amend title 11, United States Code, to exdefense activity for not less than 90 days. called to active duty or to perform a homeland tional Guard who, after September 11, 2001, are of the Armed Forces and members of the Na- ter 7, qualifying members of reserve components the means-test presumption of abuse under chap- empt for a limited period, from the application of 

SEPTEMBER 15, 2008 

Reported with an amendment 


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