II
Calendar No. 110
106TH CONGRESS
1ST SESSION
H. R. 833
IN THE SENATE OF THE UNITED STATES
MAY 6, 1999
Received
MAY 12, 1999
Read twice and placed on the calendar
AN ACT
To amend title 11 of the United States Code, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Bankruptcy Reform Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—CONSUMER BANKRUPTCY PROVISIONS
Subtitle A—Needs based bankruptcy
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Subtitle B—Consumer Bankruptcy Protections
Sec. 105. Definitions.
Sec. 106. Enforcement.
Sec. 107. Sense of the Congress.
Sec. 108. Discouraging abusive reaffirmation practices.
Sec. 109. Promotion of alternative dispute resolution.
Sec. 110. Enhanced disclosure for credit extensions secured by a dwelling.
Sec. 111. Dual use debit card.
Sec. 112. Enhanced disclosures under an open-end credit plan.
Sec. 113. Protection of savings earmarked for the postsecondary education of
children.
Sec. 114. Effect of discharge.
Sec. 115. Limiting trustee liability.
Sec. 116. Reinforce the fresh start.
Sec. 117. Discouraging bad faith repeat filings.
Sec. 118. Curbing abusive filings.
Sec. 119. Debtor retention of personal property security.
Sec. 120. Relief from the automatic stay when the debtor does not complete in-
tended surrender of consumer debt collateral.
Sec. 121. Giving secured creditors fair treatment in chapter 13.
Sec. 122. Restraining abusive purchases on secured credit.
Sec. 123. Fair valuation of collateral.
Sec. 124. Domiciliary requirements for exemptions.
Sec. 125. Restrictions on certain exempt property obtained through fraud.
Sec. 126. Rolling stock equipment.
Sec. 127. Discharge under chapter 13.
Sec. 128. Bankruptcy judgeships.
Sec. 129. Additional amendments to title 11, United States Code.
Sec. 130. Amendment to section 1325 of title 11, United States Code.
Sec. 131. Application of the codebtor stay only when the stay protects the debt-
or.
Sec. 132. Adequate protection for investors.
Sec. 133. Limitation on luxury goods.
Sec. 134. Allowing a debtor to retain leased personal property by assumption.
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Sec. 135. Adequate protection of lessors and purchase money secured creditors.
Sec. 136. Automatic stay.
Sec. 137. Extend period between bankruptcy discharges.
Sec. 138. Definition of domestic support obligation.
Sec. 139. Priorities for claims for domestic support obligations.
Sec. 140. Requirements to obtain confirmation and discharge in cases involving
domestic support obligations.
Sec. 141. Exceptions to automatic stay in domestic support obligation pro-
ceedings.
Sec. 142. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 143. Continued liability of property.
Sec. 144. Protection of domestic support claims against preferential transfer
motions.
Sec. 145. Clarification of meaning of household goods.
Sec. 146. Nondischargeable debts.
Sec. 147. Monetary limitation on certain exempt property.
Sec. 148. Bankruptcy fees.
Sec. 149. Collection of child support.
Sec. 150. Excluding employee benefit plan participant contributions and other
property from the estate.
Sec. 151. Clarification of postpetition wages and benefits.
Sec. 152. Exceptions to automatic stay in domestic support obligation pro-
ceedings.
Sec. 153. Automatic stay inapplicable to certain proceedings against the debtor.
Sec. 154. Disclosures.
Sec. 155. Debtor’s bill of rights.
TITLE II—DISCOURAGING BANKRUPTCY ABUSE
Sec. 201. Reenactment of chapter 12.
Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.
Sec. 207. Amendment to section 546 of title 11, United States Code.
Sec. 208. Limitation.
Sec. 209. Amendment to section 330(a) of title 11, United States Code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 211. Preferences.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Defaults based on nonmonetary obligations.
Sec. 216. Sharing of compensation.
Sec. 217. Priority for administrative expenses.
Sec. 218. Nondischargeability of certain educational benefits and loans.
TITLE III—GENERAL BUSINESS BANKRUPTCY PROVISIONS
Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.
Sec. 303. Extensions.
Sec. 304. Local filing of bankruptcy cases.
Sec. 305. Permitting assumption of contracts.
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TITLE IV SMALL BUSINESS BANKRUPTCY PROVISIONS
Sec. 401. Flexible rules for disclosure Statement and plan.
Sec. 402. Definitions.
Sec. 403. Standard form disclosure Statement and plan.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms for small business cases.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment of
trustee or examiner.
Sec. 414. Study of operation of title 11, United States Code, with respect to
small businesses.
Sec. 415. Payment of interest.
TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI—STREAMLINING THE BANKRUPTCY SYSTEM
Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide required infor-
mation.
Sec. 605. Adequate time to prepare for hearing on confirmation of the plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the Fed-
eral Rules of Bankruptcy Procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.
Sec. 612. Bankruptcy appeals.
Sec. 613. GAO study.
Sec. 614. Compensating trustees.
TITLE VII—BANKRUPTCY DATA
Sec. 701. Improved bankruptcy statistics.
Sec. 702. Uniform rules for the collection of bankruptcy data.
Sec. 703. Sense of the Congress regarding availability of bankruptcy data.
TITLE VIII—BANKRUPTCY TAX PROVISIONS
Sec. 801. Treatment of certain liens.
Sec. 802. Effective notice to government.
Sec. 803. Notice of request for a determination of taxes.
Sec. 804. Rate of interest on tax claims.
Sec. 805. Tolling of priority of tax claim time periods.
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Sec. 806. Priority property taxes incurred.
Sec. 807. Chapter 13 discharge of fraudulent and other taxes.
Sec. 808. Chapter 11 discharge of fraudulent taxes.
Sec. 809. Stay of tax proceedings.
Sec. 810. Periodic payment of taxes in chapter 11 cases.
Sec. 811. Avoidance of statutory tax liens prohibited.
Sec. 812. Payment of taxes in the conduct of business.
Sec. 813. Tardily filed priority tax claims.
Sec. 814. Income tax returns prepared by tax authorities.
Sec. 815. Discharge of the estate’s liability for unpaid taxes.
Sec. 816. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 817. Standards for tax disclosure.
Sec. 818. Setoff of tax refunds.
TITLE IX—ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 901. Amendment to add chapter 15 to title 11, United States Code.
Sec. 902. Other amendments to titles 11 and 28, United States Code.
TITLE X—FINANCIAL CONTRACT PROVISIONS
Sec. 1001. Treatment of certain agreements by conservators or receivers of in-
sured depository institutions.
Sec. 1002. Authority of the corporation with respect to failed and failing insti-
tutions.
Sec. 1003. Amendments relating to transfers of qualified financial contracts.
Sec. 1004. Amendments relating to disaffirmance or repudiation of qualified fi-
nancial contracts.
Sec. 1005. Clarifying amendment relating to master agreements.
Sec. 1006. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 1007. Bankruptcy Code amendments.
Sec. 1008. Recordkeeping requirements.
Sec. 1009. Exemptions from contemporaneous execution requirement.
Sec. 1010. Damage measure.
Sec. 1011. Sipc stay.
Sec. 1012. Asset-backed securitizations.
Sec. 1013. Federal Reserve collateral requirements.
Sec. 1014. Effective date; application of amendments.
TITLE XI—TECHNICAL CORRECTIONS
Sec. 1101. Definitions.
Sec. 1102. Adjustment of dollar amounts.
Sec. 1103. Extension of time.
Sec. 1104. Technical amendments.
Sec. 1105. Penalty for persons who negligently or fraudulently prepare bank-
ruptcy petitions.
Sec. 1106. Limitation on compensation of professional persons.
Sec. 1107. Special tax provisions.
Sec. 1108. Effect of conversion.
Sec. 1109. Allowance of administrative expenses.
Sec. 1110. Priorities.
Sec. 1111. Exemptions.
Sec. 1112. Exceptions to discharge.
Sec. 1113. Effect of discharge.
Sec. 1114. Protection against discriminatory treatment.
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Sec. 1115. Property of the estate.
Sec. 1116. Preferences.
Sec. 1117. Postpetition transactions.
Sec. 1118. Disposition of property of the estate.
Sec. 1119. General provisions.
Sec. 1120. Appointment of elected trustee.
Sec. 1121. Abandonment of railroad line.
Sec. 1122. Contents of plan.
Sec. 1123. Discharge under chapter 12.
Sec. 1124. Bankruptcy cases and proceedings.
Sec. 1125. Knowing disregard of bankruptcy law or rule.
Sec. 1126. Transfers made by nonprofit charitable corporations.
Sec. 1127. Prohibition on certain actions for failure to incur finance charges.
Sec. 1128. Protection of valid purchase money security interests.
Sec. 1129. Trustees.
TITLE XII—GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
Sec. 1201. Effective date; application of amendments.
TITLE I—CONSUMER
BANKRUPTCY PROVISIONS
Subtitle A—Needs based
bankruptcy
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is
amended by inserting ‘‘or consents to’’ after ‘‘requests’’.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL.—Section 707 of title 11, United
States Code, is amended—
(1) by striking the section heading and insert-
ing the following:
‘‘§ 707. Dismissal of a case or conversion to a case
under chapter 13’’;
and
(2) in subsection (b)—
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(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(B) in paragraph (1), as redesignated by
subparagraph (A) of this paragraph—
(i) in the first sentence—
(I) by striking ‘‘but not at the re-
quest or suggestion of’’ and inserting
‘‘the trustee, or’’;
(II) by inserting ‘‘, or, with the
debtor’s consent, convert such a case
to a case under chapter 13 of this
title,’’ after ‘‘consumer debts’’; and
(III) by striking ‘‘substantial
abuse’’ and inserting ‘‘abuse’’; and
(ii) by striking the second and third
sentences and inserting the following:
‘‘(2)(A)(i) In considering under paragraph (1) wheth-
er the granting of relief would be an abuse of the provi-
sions of this chapter, the court shall presume abuse exists
if the debtor’s current monthly income less estimated ad-
ministrative expenses and reasonable attorneys’ fees, and
amounts set forth in clauses (ii) for monthly expenses
(which shall include, if applicable, the continuation of ac-
tual expenses of a dependent child under the age of 18
for tuition, books, and required fees at a private elemen-
tary or secondary school, not exceeding $10,000 per year,
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which amount shall be adjusted pursuant to section
104(b)), (iii) for monthly payments on account of secured
debts, and (iv) for monthly unsecured priority debt pay-
ments, and multiplied by 60 months is not less than
$6,000.
‘‘(ii) The debtor’s monthly expenses shall be the debt-
or’s applicable monthly expense amounts specified under
the National Standards and Local Standards, and the
debtor’s actual monthly expenses for the categories speci-
fied as Other Necessary Expenses issued by the Internal
Revenue Service for the area in which the debtor resides,
as in effect on the date of the entry of the order for relief,
for the debtor, the dependents of the debtor, and the
spouse of the debtor in a joint case, if the spouse is not
otherwise a dependent. In addition, if it is demonstrated
that it is reasonable and necessary, the debtor may also
subtract an allowance of up to 5% of the food and clothing
categories as specified by the National Standards issued
by the Internal Revenue Service. Notwithstanding any
other provision of this clause, the debtor’s monthly ex-
penses shall not include any payments for debts.
‘‘(iii) The debtor’s average monthly payments on ac-
count of secured debts shall be calculated as the total of
all amounts scheduled as contractually due to secured
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creditors in each month of the 60 months following the
date of the petition, and dividing that total by 60 months.
‘‘(iv) The debtor’s monthly unsecured priority debt
payments (including payments for priority child support
and alimony claims) shall be calculated as the total
amount of unsecured debts entitled to priority, and divid-
ing the total by 60 months.
‘‘(v) For the purposes of this subsection, a family or
household shall consist of the debtor, the debtor’s spouse,
and the debtor’s dependents, but not a legally separated
spouse unless the spouse files a joint case with the debtor.
‘‘(B) In any motion filed under this subsection, the
presumption of abuse may be rebutted only by dem-
onstrating extraordinary circumstances that require addi-
tional expenses or adjustment of current monthly income.
In order to establish extraordinary circumstances, the
debtor must itemize each additional expense or adjustment
of income and provide documentation for such expenses
or adjustment of income and a detailed explanation of the
extraordinary circumstances which make such expenses or
adjustment of income necessary and reasonable. The debt-
or shall attest under oath to the accuracy of any informa-
tion provided to demonstrate that additional expenses or
adjustment to income are required. The presumption of
abuse may be rebutted only if such additional expenses
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or adjustments to income cause the debtor’s current
monthly income less estimated administrative expenses
and reasonable attorneys’ fees, and the amounts set forth
in clauses (ii), (iii), and (iv) of subparagraph (A) when
multiplied by 60 to be less than $6,000.
‘‘(C) No judge, United States trustee, panel trustee,
bankruptcy administrator or other party in interest shall
bring a motion under this paragraph if the debtor and
the debtor’s spouse combined, as of the date of the order
for relief, have current monthly total income equal to or
less than the regional median household monthly income
calculated on a semiannual basis for a household of equal
size. However, for a household of more than four individ-
uals, the median income shall be that of a household of
four individuals plus $583 for each additional member of
that household.
‘‘(3) In considering under paragraph (1) whether the
granting of relief would be an abuse of the provisions of
this chapter in a case in which the presumption in para-
graph (2)(A)(i) does not apply or has been rebutted, the
court shall consider—
‘‘(A) whether the debtor filed the petition in
bad faith; or
‘‘(B) the totality of the circumstances (includ-
ing whether the debtor seeks to reject a personal
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services contract and the financial need for such re-
jection as sought by the debtor) of the debtor’s fi-
nancial situation demonstrates abuse.
‘‘(4)(A) If a panel trustee appointed under section
586(a)(1) of title 28 or bankruptcy administrator brings
a motion for dismissal or conversion under this subsection
and the court grants that motion and finds that the action
of the counsel for the debtor in filing under this chapter
violated Rule 9011, the court shall assess damages which
may include ordering:
‘‘(i) the counsel for the debtor to reimburse the
trustee for all reasonable costs, including reasonable
attorneys’ fees.
‘‘(ii) the assessment of an appropriate civil pen-
alty against the counsel for the debtor; and
‘‘(iii) the payment of the civil penalty to the
panel trustee, bankruptcy administrator or the
United States trustee.
‘‘(B) In the case of a petition filed under sections
301, 302, or 303 of this title and supporting lists, sched-
ules and documents filed under section 521(a)(1) of this
title, the signature of an attorney on the petition shall con-
stitute a certificate that the attorney has—
‘‘(i) performed a reasonable investigation into
the circumstances that gave rise to the petition; and
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‘‘(ii) determined that the petition, lists, sched-
ules, and documents—
‘‘(I) are well grounded in fact; and
‘‘(II) are warranted by existing law or a
good faith argument for the extension, modi-
fication, or reversal of existing law and do not
constitute an abuse under paragraph (1) of this
subsection.
‘‘(5) The court may award a debtor all reasonable
costs in contesting a motion filed by a party in interest
(not including a trustee or the United States trustee)
under this subsection (including reasonable attorneys’
fees) if—
‘‘(A) the court does not grant the motion; and
‘‘(B) the court finds that—
‘‘(i) the position of the party that brought
the motion was not substantially justified; or
‘‘(ii) the party brought the motion solely
for the purpose of coercing a debtor into
waiving a right guaranteed to the debtor under
this title.
‘‘(6) However, only the court, the United States
trustee, or the trustee may file a motion to dismiss or con-
vert a case under this subsection if the current monthly
income of the debtor and the debtor’s spouse combined,
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as of the date of the order for relief, when multiplied by
12, is less than the highest national median family income
last reported by the Bureau of the Census for a family
of equal or lesser size, or in the case of a household of
one person, the national median household income for one
earner. Notwithstanding the foregoing, the national me-
dian family income for a family of more than four individ-
uals shall be the national median family income last re-
ported by the Bureau of the Census for a family of four
individuals plus $583 for each additional member of the
family.
‘‘(7) In making a determination whether to dismiss
a case under this section, the court may not take into con-
sideration whether a debtor has made, or continues to
make, charitable contributions (that meet the definition
of ‘charitable contribution’ under section 548(d)(3)) to
any qualified religious or charitable entity or organization
(as that term is defined in section 548(d)(4)).
‘‘(8) Not later than 3 years after the date of the en-
actment of the Bankruptcy Reform Act of 1999, the Di-
rector of the Executive Office for United States Trustees
shall submit a report, to the Committee on the Judiciary
of the House of Representatives and the Committee on
the Judiciary of the Senate, containing its findings regard-
ing the utilization of the Internal Revenue Service stand-
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ards for determining the current monthly expenses under
section 707(b)(1)(A)(ii) of title 11, United States Code,
of debtors and the impact that the application of such
standards has had on debtors and on the bankruptcy
courts. Such report may include recommendations for
amendments to such title, consistent with the Director’s
findings.’’.
(b) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (10) the fol-
lowing:
‘‘(10A) ‘current monthly income’ means the av-
erage monthly income from all sources derived which
the debtor, or in a joint case, the debtor and the
debtor’s spouse, receive without regard to whether it
is taxable income, in the 180 days preceding the
date of determination, and includes any amount paid
by anyone other than the debtor or, in a joint case,
the debtor and the debtor’s spouse, on a regular
basis to the household expenses of the debtor or the
debtor’s dependents and, in a joint case, the debtor’s
spouse if not otherwise a dependent, but excludes
payments to victims of war crimes or crimes against
humanity and benefits received under the Social Se-
curity Act;’’; and
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(2) by inserting after paragraph (17) the fol-
lowing:
‘‘(17A) ‘estimated administrative expenses and
reasonable attorneys’ fees’ means 10 percent of pro-
jected payments under a chapter 13 plan;’’.
(c) ADMINISTRATIVE PROVISIONS.—Section 704 of
title 11, United States Code, is amended—
(1) in paragraph (8) by striking ‘‘and’’ at the
end;
(2) in paragraph (9) by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(10)(A) With respect to an individual debtor,
the trustee shall review all materials filed by the
debtor, consider all information presented at the
first meeting of creditors, and within 10 days after
the first meeting of creditors file with the court a
statement as to whether or not the debtor’s case
should be presumed to be an abuse under section
707(b) of this title. The court shall provide a copy
of such statement to all creditors within 5 days after
such statement is filed. If, based on the filing of
such statement with the court, the trustee deter-
mines that the debtor’s case should be presumed to
be an abuse under section 707(b) of this title and
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if the current monthly income of the debtor and the
debtor’s spouse combined, as of the date of the order
for relief, when multiplied by 12, is not less than the
highest national median family income reported for
a family of equal or lesser size, or in the case of a
household of one person, the national median house-
hold income for one earner, then the trustee shall
within 30 days of the filing of such statement,
either—
‘‘(i) file a motion to dismiss or convert
under section 707(b) of this title; or
‘‘(ii) file a statement setting forth the rea-
sons the trustee or bankruptcy administrator
does not believe that such a motion would be
appropriate.
‘‘(B) Notwithstanding subparagraph (A), for
purposes of this paragraph the national family in-
come for a family of more than four individuals shall
be the national median family income last reported
by the Bureau of the Census for a family of four in-
dividuals plus $583 for each additional member of
the family.’’.
(d) DEBTOR’S DUTIES.—Section 521(a)(1)(B) of
title 11, United States Code, as amended by section 603,
is amended—
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(1) in clause (v) by striking ‘‘and’’ at the end;
(2) in clause (vi) by adding ‘‘and’’ at the end;
and
(3) by inserting the following after clause (vi):
‘‘(vii) a statement of the debtor’s cur-
rent monthly income, and the calculations
which determine whether a presumption
arises under section 707(b)(2)(A)(i), show-
ing how each amount is calculated.’’.
(e) BANKRUPTCY FORMS.—Section 2075 of title 28,
United States Code, is amended by adding the following
at the end of the first paragraph:
‘‘The bankruptcy rules promulgated under this section
shall prescribe a form for the statement referred to in sec-
tion 521(a)(1)(B)(vii) of title 11, United States Code, and
may provide general rules on the content of such state-
ment.’’.
(f) CHAPTER 13.—Section 1325(a) of title 11, United
States Code, is amended—
(1) in paragraph (5) by striking ‘‘and’’ at the
end;
(2) in paragraph (6) by striking the period and
inserting ‘‘; and’’; and
(3) by inserting the following after paragraph
(6):
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‘‘(7) the action of the debtor in filing the peti-
tion under this chapter was in good faith.’’.
(g) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 7 of title 11, United States
Code, is amended by striking the item relating to section
707 and inserting the following:
‘‘707. Dismissal of a case or conversion to a case under chapter 13.’’.
SEC. 103. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is
amended to read as follows:
‘‘(b) Before the commencement of a case under this
title by an individual whose debts are primarily consumer
debts, the clerk shall give to such individual written notice
containing—
‘‘(1) a brief description of—
‘‘(A) chapters 7, 11, 12, and 13 and the
general purpose, benefits, and costs of pro-
ceeding under each of those chapters; and
‘‘(B) the types of services available from
credit counseling agencies; and
‘‘(2) statements specifying that—
‘‘(A) a person who knowingly and fraudu-
lently conceals assets or makes a false oath or
statement under penalty of perjury in connec-
tion with a bankruptcy case shall be subject to
fine, imprisonment, or both; and
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‘‘(B) all information supplied by a debtor
in connection with a bankruptcy case is subject
to examination by the Attorney General.’’.
SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING
TEST PROGRAM.
(a) DEVELOPMENT
OF FINANCIAL MANAGEMENT
AND TRAINING CURRICULUM AND MATERIALS.—The Di-
rector of the Executive Office for United States Trustees
(in this section referred to as the ‘‘Director’’) shall consult
with a wide range of individuals who are experts in the
field of debtor education, including trustees who are ap-
pointed under chapter 13 of title 11, United States Code,
and who operate financial management education pro-
grams for debtors, and shall develop a financial manage-
ment training curriculum and materials that can be used
to educate individual debtors on how to better manage
their finances.
(b) TEST—(1) The Director shall select 6 judicial dis-
tricts of the United States in which to test the effective-
ness of the financial management training curriculum and
materials developed under subsection (a).
(2) For a 18-month period beginning not later than
270 days after the date of the enactment of this Act, such
curriculum and materials shall be, for the 6 judicial dis-
tricts selected under paragraph (1), used as the instruc-
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tional course concerning personal financial management
for purposes of section 111 of title 11, United States
Code.
(c) EVALUATION.—(1) During the 1-year period re-
ferred to in subsection (b), the Director shall evaluate the
effectiveness of—
(A) the financial management training cur-
riculum and materials developed under subsection
(a); and
(B) a sample of existing consumer education
programs such as those described in the Report of
the National Bankruptcy Review Commission (Octo-
ber 20, 1997) that are representative of consumer
education programs carried out by the credit indus-
try, by trustees serving under chapter 13 of title 11,
United States Code, and by consumer counselling
groups.
(2) Not later than 3 months after concluding such
evaluation, the Director shall submit a report to the
Speaker of the House of Representatives and the Presi-
dent pro tempore of the Senate, for referral to the appro-
priate committees of the Congress, containing the findings
of the Director regarding the effectiveness of such cur-
riculum, such materials, and such programs and their
costs.
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Subtitle B—Consumer Bankruptcy
Protections
SEC. 105. DEFINITIONS.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (2) the fol-
lowing:
‘‘(3) ‘assisted person’ means any person whose
debts consist primarily of consumer debts and whose
non-exempt assets are less than $150,000;’’;
(2) by inserting after paragraph (4) the fol-
lowing:
‘‘(4A) ‘bankruptcy assistance’ means any goods
or services sold or otherwise provided to an assisted
person with the express or implied purpose of pro-
viding information, advice, counsel, document prepa-
ration or filing, or attendance at a creditors’ meeting
or appearing in a proceeding on behalf of another or
providing legal representation with respect to a pro-
ceeding under this title;’’; and
(3) by inserting after paragraph (12A) the fol-
lowing:
‘‘(12B) ‘debt relief agency’ means any person
who provides any bankruptcy assistance to an as-
sisted person in return for the payment of money or
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other valuable consideration, or who is a bankruptcy
petition preparer pursuant to section 110 of this
title, but does not include any person that is any of
the following or an officer, director, employee or
agent thereof—
‘‘(A) any nonprofit organization which is
exempt from taxation under section 501(c)(3)
of the Internal Revenue Code of 1986;
‘‘(B) any creditor of the person to the ex-
tent the creditor is assisting the person to re-
structure any debt owed by the person to the
creditor; or
‘‘(C) any depository institution (as defined
in section 3 of the Federal Deposit Insurance
Act) or any Federal credit union or State credit
union (as those terms are defined in section
101 of the Federal Credit Union Act), or any
affiliate or subsidiary of such a depository insti-
tution or credit union;’’.
(b) 
CONFORMING
AMENDMENT.—In 
section
104(b)(1) by inserting ‘‘101(3),’’ after ‘‘sections’’.
SEC. 106. ENFORCEMENT.
(a) ENFORCEMENT.—Subchapter II of chapter 5 of
title 11, United States Code, is amended by adding at the
end the following:
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‘‘§ 526. Debt relief agency enforcement
‘‘(a) A debt relief agency shall not—
‘‘(1) fail to perform any service which the debt
relief agency has told the assisted person or prospec-
tive assisted person the agency would provide that
person in connection with the preparation for or ac-
tivities during a case or proceeding under this title;
‘‘(2) make any statement, or counsel or advise
any assisted person to make any statement in any
document filed in a case or proceeding under this
title, which is untrue and misleading or which upon
the exercise of reasonable care, should be known by
the debt relief agency to be untrue or misleading;
‘‘(3) misrepresent to any assisted person or pro-
spective assisted person, directly or indirectly, af-
firmatively or by material omission, what services
the debt relief agency can reasonably expect to pro-
vide that person, or the benefits an assisted person
may obtain or the difficulties the person may experi-
ence if the person seeks relief in a proceeding pursu-
ant to this title; or
‘‘(4) advise an assisted person or prospective
assisted person to incur more debt in contemplation
of that person filing a case under this title or in
order to pay an attorney or bankruptcy petition pre-
parer fee or charge for services performed as part of
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preparing for or representing a debtor in a case
under this title.’’.
‘‘(b) ASSISTED PERSON WAIVERS INVALID.—Any
waiver by any assisted person of any protection or right
provided by or under this section shall not be enforceable
against the debtor by any Federal or State court or any
other person, but may be enforced against a debt relief
agency.
‘‘(c) NONCOMPLIANCE.—
‘‘(1) Any contract between a debt relief agency
and an assisted person for bankruptcy assistance
which does not comply with the material require-
ments of this section shall be treated as void and
may not be enforced by any Federal or State court
or by any other person.
‘‘(2) Any debt relief agency shall be liable to an
assisted person in the amount of any fees or charges
in connection with providing bankruptcy assistance
to such person which the debt relief agency has re-
ceived, for actual damages, and for reasonable attor-
neys’ fees and costs if the debt relief agency is
found, after notice and hearing, to have—
‘‘(A) intentionally or negligently failed to
comply with any provision of this section with
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respect to a bankruptcy case or related pro-
ceeding of the assisted person;
‘‘(B) provided bankruptcy assistance to an
assisted person in a case or related proceeding
which is dismissed or converted because of the
debt relief agency’s intentional or negligent fail-
ure to file bankruptcy papers, including papers
specified in section 521 of this title; or
‘‘(C) 
intentionally 
or 
negligently 
dis-
regarded the material requirements of this title
or the Federal Rules of Bankruptcy Procedure
applicable to such debt relief agency.
‘‘(3) In addition to such other remedies as are
provided under State law, whenever the chief law en-
forcement officer of a State, or an official or agency
designated by a State, has reason to believe that any
person has violated or is violating this section, the
State—
‘‘(A) may bring an action to enjoin such
violation;
‘‘(B) may bring an action on behalf of its
residents to recover the actual damages of as-
sisted persons arising from such violation, in-
cluding any liability under paragraph (2); and
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‘‘(C) in the case of any successful action
under subparagraph (A) or (B), shall be award-
ed the costs of the action and reasonable attor-
ney fees as determined by the court.
‘‘(4) The United States District Court for any
district located in the State shall have concurrent ju-
risdiction of any action under subparagraph (A) or
(B) of paragraph (3).
‘‘(5) Notwithstanding any other provision of
Federal law and in addition to any other remedy
provided under Federal or State law, if the court, on
its own motion or on the motion of the United
States trustee or the debtor, finds that a person in-
tentionally violated this section, or engaged in a
clear and consistent pattern or practice of violating
this section, the court may—
‘‘(A) enjoin the violation of such section; or
‘‘(B) impose an appropriate civil penalty
against such person.
‘‘(c) RELATION TO STATE LAW.—This section shall
not annul, alter, affect or exempt any person subject to
those sections from complying with any law of any State
except to the extent that such law is inconsistent with
those sections, and then only to the extent of the inconsist-
ency.’’.
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(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, is
amended by inserting after the item relating to section
527, the following:
‘‘526. Debt relief agency enforcement.’’.
SEC. 107. SENSE OF THE CONGRESS.
It is the sense of the Congress that States should de-
velop curricula relating to the subject of personal finance,
designed for use in elementary and secondary schools.
SEC. 108. DISCOURAGING ABUSIVE REAFFIRMATION PRAC-
TICES.
Section 524 of title 11, United States Code, is
amended—
(1) in subsection (c)—
(A) in paragraph (2)—
(i) in subparagraph (A) by striking
‘‘and’’ at the end;
(ii) in subparagraph (B) by adding
‘‘and’’ at the end; and
(iii) by adding at the end the fol-
lowing:
‘‘(C) if the consideration for such agreement is
based on a wholly unsecured consumer debt (except
for debts owed to creditors defined in section
461(b)(1)(A)(iv) of title 12, United States Code),
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such agreement contains a clear and conspicuous
statement which advises the debtor—
‘‘(i) that the debtor is entitled to a hearing
before the court at which the debtor shall ap-
pear in person and at which the court will de-
cide whether the agreement is an undue hard-
ship, not in the debtor’s best interest, and not
the result of a threat by the creditor to take
any action that cannot be legally taken or that
is not intended to be taken; and
‘‘(ii) that if the debtor is represented by
counsel, the debtor may waive the debtor’s right
to such a hearing by signing a statement
waiving the hearing, stating that the debtor is
represented by counsel, and identifying such
counsel;’’; and
(B) in paragraph (6)(A)—
(i) by striking ‘‘and’’ at the end of
clause (i);
(ii) by striking the period at the end
of clause (ii) and inserting ‘‘; and’’; and
(iii) by adding at the end thereof the
following:
‘‘(iii) not entered into by the debtor as the
result of a threat by the creditor to take any
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action that cannot be legally taken or that is
not intended to be taken.’’; and
(2) in the third sentence of subsection (d)—
(A) by striking ‘‘of this section’’ and in-
serting a comma; and
(B) by inserting after ‘‘such agreement’’
the following:
‘‘or if the consideration for such agreement is based on
a wholly unsecured consumer debt (except for debts owed
to creditors defined in section 461(b)(1)(A)(iv) of title 12,
United States Code) and the debtor has not waived the
debtor’s right to a hearing on the agreement in accordance
with subsection (c)(2)(C) of this section’’.
SEC. 109. PROMOTION OF ALTERNATIVE DISPUTE RESOLU-
TION.
(a) REDUCTION OF CLAIM.—Section 502 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(k)(1) The court, on the motion of the debtor and
after a hearing, may reduce a claim filed under this sec-
tion based wholly on unsecured consumer debts by not
more than 20 percent, if the debtor can prove by clear
and convincing evidence that the claim was filed by a cred-
itor who unreasonably refused to negotiate a reasonable
alternative repayment schedule proposed by an approved
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credit counseling agency acting on behalf of the debtor,
and if—
‘‘(A) such offer was made within the period be-
ginning 60 days before the filing of the petition;
‘‘(B) such offer provided for payment of at least
60 percent of the amount of the debt over a period
not to exceed the repayment period of the loan, or
a reasonable extension thereof; and
‘‘(C) no part of the debt under the alternative
repayment schedule is nondischargeable, is entitled
to priority under section 507 of this title, or would
be paid a greater percentage in a chapter 13 pro-
ceeding than offered by the debtor.
‘‘(2) The debtor shall have the burden of proving that
the proposed alternative repayment schedule was made in
the 60-day period specified in subparagraph (A) and that
the creditor unreasonably refused to consider the debtor’s
proposal.’’.
(b) LIMITATION ON AVOIDABILITY.—Section 547 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(h) The trustee may not avoid a transfer if such
transfer was made as a part of an alternative repayment
plan between the debtor and any creditor of the debtor
created by an approved credit counseling agency.’’.
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SEC. 110. ENHANCED DISCLOSURE FOR CREDIT EXTEN-
SIONS SECURED BY A DWELLING.
(a) STUDY REQUIRED.—During the period beginning
180 days after the date of the enactment of this Act and
ending 18 months after the date of the enactment, the
Board of Governors of the Federal Reserve System (in this
section referred to as the ‘‘Board’’) shall conduct a study
and submit to Congress a report (including recommenda-
tions for any appropriate legislation) regarding—
(1) whether a consumer engaging in an open-
end credit transaction (as defined pursuant to sec-
tion 103 of the Truth in lending Act) secured by the
consumer’s principal dwelling is provided adequate
information under Federal law, including under sec-
tion 127A of the Truth in Lending Act, regarding
the tax deductibility of interest paid on such trans-
action; and
(2) whether a consumer engaging in a closed-
end credit transaction (as defined pursuant to sec-
tion 103 of the Truth in Lending Act) secured by
the consumer’s principal dwelling is provided ade-
quate information regarding the tax deductibility of
interest paid on such transaction.
In conducting such study, the Board shall specifically con-
sider whether additional disclosures are necessary with re-
spect to such open-end or closed-end credit transactions
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in which the amount of the credit extended exceeds the
fair market value of the dwelling.
(b) REGULATIONS.—If the Board determines that ad-
ditional disclosures are necessary in connection with trans-
actions described in subsection (a), the Board, pursuant
to its authority under the Truth in Lending Act, may pro-
mulgate regulations that would require such additional
disclosures. Any such regulations promulgated by the
Board under this section shall not take effect before the
end of the 36-month period after the date of the enact-
ment of this Act.
SEC. 111. DUAL USE DEBIT CARD.
(a) STUDY REQUIRED.—The Board of Governors of
the Federal Reserve System (in this section referred to
as the ‘‘Board’’) shall conduct a study of existing protec-
tions provided to consumers to limit their liability for un-
authorized use of a debit card or similar access device.
(b) SPECIFIC CONSIDERATIONS.—In conducting the
study required by subsection (a), the Board shall specifi-
cally consider the following—
(1) the extent to which existing provisions of
section 909 of the Electronic Fund Transfer Act and
the Board’s implementing regulations provide ade-
quate unauthorized use liability protection for con-
sumers;
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(2) the extent to which any voluntary industry
rules have enhanced the level of protection afforded
consumers in connection with such unauthorized use
liability; and
(3) whether amendments to the Electronic
Funds Transfer Act or the Board’s implementing
regulations thereto are necessary to provide ade-
quate protection for consumers in this area.
(c) REPORT AND REGULATIONS.—Not later than 2
years after the date of the enactment of this Act, the
Board shall make public a report on its findings with re-
spect to the adequacy of existing protections afforded con-
sumers with respect to unauthorized-use liability for debit
cards and similar access devices. If the Board determines
that such protections are inadequate, the Board, pursuant
to its authority under the Electronic Funds Transfer Act,
may issue regulations to address such inadequacy. Any
regulations issued by the Board shall not be effective be-
fore 36 months after the date of the enactment of this
Act.
SEC. 112. ENHANCED DISCLOSURES UNDER AN OPEN-END
CREDIT PLAN.
(a) INITIAL AND ANNUAL MINIMUM PAYMENT DIS-
CLOSURE.—Section 127(a) of the Truth in Lending Act
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(15 U.S.C. 1637(a)) is amended by adding at the end the
following:
‘‘(9) In the case of any credit or charge card
account under an open-end consumer credit plan on
which a minimum monthly or periodic payment will
be required, other than an account described in
paragraph (8)—
‘‘(A) the following statement: ‘The min-
imum payment amount shown on your billing
statement is the smallest payment which you
can make in order to keep the account in good
standing. This payment option is offered as a
convenience and you may make larger payments
at any time. Making only the minimum pay-
ment each month will increase the amount of
interest you pay and the length of time it takes
to repay your outstanding balance.’;
‘‘(B) if the plan provides that the con-
sumer will be permitted to forgo making a min-
imum payment during a specified billing cycle,
a statement, if applicable, that if the consumer
chooses to forgo making the minimum payment,
finance charges will continue to accrue; and
‘‘(C) the following examples:
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‘‘(i) if the average account balance
under a creditor’s open-end consumer cred-
it plan, taken as an average of the account
balances for all consumer accounts under
that open-end consumer credit plan, is
$1,000 or less, two examples, based on an
annual percentage rate and method for de-
termining minimum periodic payments re-
cently in effect for that creditor, and based
on outstanding balances of $250 and $500,
showing the estimated minimum periodic
payments, and the estimated period of time
it would take to repay those outstanding
balances of $250 and $500, if the con-
sumer paid only the minimum periodic
payment on each monthly or periodic state-
ment and obtained no additional extensions
of credit; or
‘‘(ii) if the average account balance
under a creditor’s open-end consumer cred-
it plan, taken as an average of the account
balances for all consumer accounts under
that open-end consumer credit plan, is
more than $1,000, three examples, based
on an annual percentage rate and method
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for determining minimum periodic pay-
ments recently in effect for that creditor,
and 
outstanding 
balances 
of 
$1,000,
$1,500 and $2,000, showing the estimated
minimum periodic payments, and the esti-
mated period of time it would take to
repay 
those 
outstanding 
balances 
of
$1,000, $1,500 and $2,000 if the con-
sumer paid only the minimum periodic
payment on each monthly or periodic state-
ment and obtained no additional extensions
of credit.
‘‘(10) With respect to one billing cycle per cal-
endar year, the creditor shall transmit to each con-
sumer to whom the creditor is required to transmit
a statement pursuant to subsection (b) for such bill-
ing cycle the following information:
‘‘(A) the following statement: ‘The min-
imum payment amount shown on your billing
statement is the smallest payment which you
can make in order to keep the account in good
standing. This payment option is offered as a
convenience and you may make larger payments
at any time. Making only the minimum pay-
ment each month will increase the amount of
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interest you pay and the length of time it takes
to repay your outstanding balance.’;
‘‘(B) if the plan provides that the con-
sumer will be permitted to forgo making a min-
imum payment during a specified billing cycle,
a statement, if applicable, that if the consumer
chooses to forgo making the minimum payment,
finance charges will continue to accrue;
‘‘(C) an example, based on an annual per-
centage rate and method for determining min-
imum periodic payments recently in effect for
that creditor, and a $500 outstanding balance,
showing the estimated minimum periodic pay-
ment, and the estimated period of time it would
take to repay the $500 outstanding balance if
the consumer paid only the minimum periodic
payment on each monthly or periodic statement
and obtained no additional extensions of credit;
and
‘‘(D) a worksheet prescribed by the Board
to assist the consumer in determining the con-
sumer’s household income and debt obliga-
tions.’’.
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(b) PERIODIC MINIMUM PAYMENT DISCLOSURES.—
Section 127(b) of the Truth in Lending Act (15 U.S.C.
1637(b)) is amended by adding at the end the following:
‘‘(11) The following statement: ‘The minimum
payment amount shown on your billing statement is
the smallest payment which you can make in order
to keep the account in good standing. This payment
option is offered as a convenience and you may
make larger payments at any time. Making only the
minimum payment each month will increase the
amount of interest you pay and the length of time
it takes to repay your outstanding balance.’.
‘‘(12) the required minimum payment amount
represented as a dollar figure.
‘‘(13) the date by which or the period within
which the required minimum payment must be
made.’’.
(c) DISCLOSURES
RELATED
TO
INTRODUCTORY
RATES.—Section 127(c)(1)(A)(i) of the Truth in Lending
Act (15 U.S.C. 1637(c)(1)(A)(i)) is amended by inserting
the following at the end of subclause (III):
‘‘(IV) Where the initial rate is tem-
porary and will expire within a period of
less than 1 year, and is lower than the rate
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that will apply after the temporary rate
expires—
‘‘(A) the time period during
which the initial rate will remain in
effect; and
‘‘(B) the annual percentage rate
that will apply to the account after
the temporary rate expires, or if that
rate is a variable rate, the fact that
the rate is variable, the rate at the
time of mailing, and how the rate is
determined.
‘‘(V)(A) Subject to subclauses (C) and
(D), where the initial rate may increase
upon the occurrence of one or more spe-
cific events, the following information:
‘‘(i) the initial rate and the in-
creased rate that may apply;
‘‘(ii) if the increased rate is a
variable rate, the fact that the in-
creased rate is variable, the rate at
the time of mailing, and how the rate
is determined; and
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‘‘(iii) the specific event or events
that may result in imposing the in-
creased rate.
‘‘(B) At the creditor’s option, the
creditor may disclose the period for which
the increased rate will remain in effect.
‘‘(C) If the increased rate cannot be
determined at the time disclosures are
given, an explanation of the specific event
or events that may result in an increased
rate must be disclosed.
‘‘(D) A creditor is not required to dis-
close an increased rate that is imposed
when credit privileges are permanently ter-
minated.’’.
(d) INTERNET-BASED
CREDIT
CARD
SOLICITA-
TIONS.—(1)––Section 127(c) of the Truth in Lending Act
(15 U.S.C. 1637(c)) is amended by inserting after para-
graph (5) the following:
‘‘(6)(A) Any application to open a credit card
account for any person under an open-end consumer
credit plan, and any solicitation to open such an ac-
count without requiring an application, that is made
available through the Internet or an interactive com-
puter service, shall disclose the following:
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‘‘(i) the information.—
‘‘(I) described in paragraph (1)(A) in
the form required under section 122(c) of
this chapter, subject to subsection (e); and
‘‘(II) described in paragraph (1)(B) in
a clear and conspicuous form, subject to
subsections (e) and (f);
‘‘(ii) a statement, in a conspicuous and
prominent location on or with the application or
solicitation, that—
‘‘(I) the information is accurate as of
the date the application or solicitation was
posted;
‘‘(II) the information contained in the
application or solicitation is subject to
change after such date;
‘‘(III) the applicant should contact the
creditor for information on any change in
the information presented on or with the
application or solicitation since it was post-
ed;
‘‘(iii) a clear and conspicuous disclosure of
the date the application or solicitation was post-
ed and how frequently the information de-
scribed in subclause (i) is updated; and
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‘‘(iv) a disclosure, in a conspicuous and
prominent location on or with the application or
solicitation, of a toll-free telephone number or
e-mail address at which the applicant may con-
tact the creditor to obtain any change in the in-
formation provided on or with the application or
solicitation since it was posted.
‘‘(B) The disclosures required under subparagraph
(A) may be contained either:
‘‘(i) on the webpage which contains the applica-
tion or solicitation; or
‘‘(ii) on a separate webpage which can be di-
rectly accessed using a hypertext link which is con-
tained on the webpage which contains the applica-
tion or solicitation.
‘‘(C) Upon receipt of a request for any of the infor-
mation referred to in subparagraph (A), the creditor or
its agent shall promptly disclose any change in the infor-
mation required to be disclosed under subparagraph (A).
‘‘(D) For purposes of this paragraph (6)—
‘‘(i) the term ‘Internet’ means the international
computer network of both Federal and non-Federal
interoperable packets switched data networks; and
‘‘(ii) the term ‘interactive computer service’
means any information service system, or access
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software provider that provides or enables computer
access by multiple users to a computer server, in-
cluding specifically a service or system that provides
access to the Internet and such systems operated or
services offered by libraries or educational institu-
tions.’’.
(2) Section 122(c)(1) of the Truth in Lending Act
(15 U.S.C. 1632(c)(1)) is amended by striking ‘‘and
(4)(C)(i)(I)’’ 
and 
inserting 
‘‘, 
(4)(C)(i)(I) 
and
(6)(A)(i)(I)’’.
(e) ENFORCEMENT.—Section 127 of the Truth in
Lending Act (15 U.S.C. 1637) is amended by adding at
the end the following:
‘‘(h) In promulgating regulations to implement the
disclosure of an example required under subsection
(a)(9)(C) and (a)(10), the Board shall set forth a model
disclosure to accompany the example stating that the cred-
it features shown are only an example which does not obli-
gate the creditor, but is intended to illustrate the approxi-
mate length of time it could take to repay using the as-
sumptions set forth in subsection (a)(9)(C) without regard
to any other factors that could impact an approximate re-
payment period, including other credit features or the con-
sumer’s payment or other behavior with respect to the ac-
count. Compliance with the disclosures required under
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subsection (a)(9)(C) and (a)(10) shall be enforced exclu-
sively by the Federal agencies set forth in section 108.’’.
(f) REGULATORY IMPLEMENTATION.—The Board of
Governors of the Federal Reserve System (in this section
referred to as the ‘‘Board’’) shall promulgate regulations
implementing the amendments made by subsections (a)
and (b). Such regulations shall take effect no earlier than
the end of the 36-month period beginning on the date of
the enactment of this Act.
(g) STUDY REQUIRED.—The Board shall conduct a
study to determine whether consumers have adequate in-
formation about borrowing activities which may result in
financial problems. In studying this issue, the Board shall
consider the extent to which—
(1) consumers, in establishing new credit ar-
rangements, are aware of their existing payment ob-
ligations, the need to consider those obligations in
deciding to take on new credit, and how taking on
excessive credit can result in financial difficulty;
(2) minimum periodic payment features offered
in connection with open-end credit plans impact con-
sumer default rates;
(3) consumers always make only the minimum
payment throughout the life of the plan;
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(4) consumers are aware that making only min-
imum payments will increase the cost and repayment
period of an open-end loan; and
(5) the availability of low minimum payment
options is a cause of consumers experiencing finan-
cial difficulty.
(h) REPORT TO CONGRESS.—Before the end of the
2-year period beginning on the date of the enactment of
this Act, the Board shall submit to Congress a report con-
taining the findings of the Board in connection with the
study required under subsection (g).
(i) REGULATIONS.—The Board shall, by regulation
promulgated pursuant to its authority under the Truth in
Lending Act, require additional disclosures to consumers
regarding minimum payment features, including periodic
statement disclosures, if the Board determines that such
disclosures are necessary based on its findings. Any such
regulations promulgated by the Board shall not take effect
earlier than January 1, 2002.
SEC. 113. PROTECTION OF SAVINGS EARMARKED FOR THE
POSTSECONDARY EDUCATION OF CHILDREN.
Section 522 of title 11, United States Code, is
amended—
(1) in subsection (b)(2)—
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(A) in subparagraph (A) by striking ‘‘and’’
at the end;
(B) in subparagraph (B) by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(C) except as provided in paragraph (n), funds
placed in an education individual retirement account
(as defined in section 530(b)(1) of the Internal Rev-
enue Code of 1986) not less than 365 days before
the date of entry of the order of relief but only to
the extent such funds—
‘‘(i) are not pledged or promised to any en-
tity in connection with any extension of credit;
and
‘‘(ii) are not excess contributions (as de-
scribed in section 4973(e) of the Internal Rev-
enue Code of 1986).’’; and
(2) by adding at the end the following:
‘‘(n) For purposes of subsection (b)(3)(C), funds
placed in an education individual retirement account shall
not be exempt under this subsection—
‘‘(1) unless the designated beneficiary of such
account was a dependent child of the debtor for the
taxable year for which the funds were placed in such
account; and
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‘‘(2) to the extent such funds exceed—
‘‘(A) $50,000 in the aggregate in all such
accounts having the same designated bene-
ficiary; or
‘‘(B) $100,000 in the aggregate in all such
accounts attributable to all such dependent chil-
dren of the debtor.’’.
SEC. 114. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(i) The willful failure of a creditor to credit pay-
ments received under a plan confirmed under this title (in-
cluding a plan of reorganization confirmed under chapter
11 of this title) in the manner required by the plan (in-
cluding crediting the amounts required under the plan)
shall constitute a violation of any injunction under sub-
section (a)(2) which has arisen at the time of the failure.
‘‘(j)(1) An individual who is injured by the willful fail-
ure of a creditor to comply with the requirements for a
reaffirmation agreement under subsections (c) and (d), or
by any willful violation of the injunction under subsection
(a)(2), shall be entitled to recover—
‘‘(A) the greater of—
‘‘(i) the amount of actual damages; or
‘‘(ii) $1,000; and
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‘‘(B) costs and attorneys’ fees.
‘‘(2) An action to recover for a violation specified in
paragraph (1) may not be brought as a class action.’’.
SEC. 115. LIMITING TRUSTEE LIABILITY.
(a) QUALIFICATION OF TRUSTEE.—Section 322 of
title 11, United States Code, is amended—
(1) in subsection (a) by adding at the end the
following:
‘‘The trustee in a case under this title is not liable
personally or on such trustee’s bond for acts taken
within the scope of the trustee’s duties or authority
as delineated by other sections of this title or by
order of the court, except to the extent that the
trustee acted with gross negligence. Gross negligence
shall be defined as reckless indifference or deliberate
disregard of the trustee’s fiduciary duty.’’; and
(2) in subsection (c) by inserting ‘‘for any acts
within the scope of the trustee’s authority defined in
subsection (a)’’ before the period at the end.
(b) ROLE AND CAPACITY OF TRUSTEE.—Section 323
of title 11, United States Code, is amended—
(1) in subsection (b) by inserting at the end the
following: ‘‘in the trustee’s official capacity as rep-
resentative of the estate’’ before the period at the
end; and
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(2) by adding at the end the following:
‘‘(c) The trustee in a case under this title may not
be sued, either personally, in a representative capacity, or
against the trustee’s bond in favor of the United States—
‘‘(1) for acts taken in furtherance of the trust-
ee’s duties or authority in a case in which the debtor
is subsequently determined to be ineligible for relief
under the chapter in which the trustee was ap-
pointed; or
‘‘(2) for the dissemination of statistics and
other information regarding a case or cases, unless
the trustee has actual knowledge that the informa-
tion is false.
‘‘(d) The trustee in a case under this title may not
be sued in a personal capacity without leave of the bank-
ruptcy court in which the case is pending.’’.
SEC. 116. REINFORCE THE FRESH START.
(a) RESTORATION OF AN EFFECTIVE DISCHARGE.—
Section 523(a)(17) of title 11, United States Code, is
amended—
(1) by striking ‘‘by a court’’ and inserting ‘‘by
any court’’;
(2) by striking ‘‘section 1915(b) or (f)’’ and in-
serting ‘‘subsection (b) or (f)(2) of section 1915’’;
and
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(3) by inserting ‘‘(or a similar non-Federal
law)’’ after ‘‘title 28’’ each place it appears.
SEC. 117. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is
amended—
(1) in paragraph (1) by striking ‘‘and’’ at the
end;
(2) in paragraph (2) by striking the period at
the end and inserting a semicolon; and
(3) by adding at the end the following new
paragraphs:
‘‘(3) If a single or joint case is filed by or
against an individual debtor under chapter 7, 11, or
13 (other than a case refiled under a chapter other
than chapter 7 after dismisssal under section 707(b)
of this title), and if a single or joint case of the debt-
or was pending within the previous 1-year period but
was dismissed, the stay under subsection (a) with re-
spect to any action taken with respect to a debt or
property securing such debt or with respect to any
lease will terminate with respect to the debtor on the
30th day after the filing of the later case. Upon mo-
tion by a party in interest for continuation of the
automatic stay and upon notice and a hearing, the
court may extend the stay in particular cases as to
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any or all creditors (subject to such conditions or
limitations as the court may then impose) after no-
tice and a hearing completed before the expiration of
the 30-day period only if the party in interest dem-
onstrates that the filing of the later case is in good
faith as to the creditors to be stayed. A case is pre-
sumptively filed not in good faith (but such pre-
sumption may be rebutted by clear and convincing
evidence to the contrary)—
‘‘(A) as to all creditors if—
‘‘(i) more than one previous case
under any of chapter 7, 11, or 13 in which
the individual was a debtor was pending
within such 1-year period;
‘‘(ii) a previous case under any of
chapters 7, 11, or 13 in which the indi-
vidual was a debtor was dismissed within
such 1-year period, after the debtor failed
to file or amend the petition or other docu-
ments as required by this title or the court
without substantial excuse (but mere inad-
vertence or negligence shall not be sub-
stantial excuse unless the dismissal was
caused by the negligence of the debtor’s at-
torney), failed to provide adequate protec-
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tion as ordered by the court, or failed to
perform the terms of a plan confirmed by
the court; or
‘‘(iii) there has not been a substantial
change in the financial or personal affairs
of the debtor since the dismissal of the
next most previous case under any of chap-
ters 7, 11, or 13 of this title, or there is
not any other reason to conclude that the
later case will be concluded, if a case under
chapter 7 of this title, with a discharge,
and if a chapter 11 or 13 case, a con-
firmed plan which will be fully performed;
‘‘(B) as to any creditor that commenced an
action under subsection (d) in a previous case
in which the individual was a debtor if, as of
the date of dismissal of such case, that action
was still pending or had been resolved by termi-
nating, conditioning, or limiting the stay as to
actions of such creditor.
‘‘(4) If a single or joint case is filed by or
against an individual debtor under this title (other
than a case refiled under a chapter other than chap-
ter 7 after a dismissal under section 707(b) of this
title), and if two or more single or joint cases of the
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debtor were pending within the previous year but
were dismissed, the stay under subsection (a) will
not go into effect upon the filing of the later case.
On request of a party in interest, the court shall
promptly enter an order confirming that no stay is
in effect. If a party in interest requests within 30
days of the filing of the later case, the court may
order the stay to take effect in the case as to any
or all creditors (subject to such conditions or limita-
tions as the court may impose), after notice and
hearing, only if the party in interest demonstrates
that the filing of the later case is in good faith as
to the creditors to be stayed. A stay imposed pursu-
ant to the preceding sentence will be effective on the
date of entry of the order allowing the stay to go
into effect. A case is presumptively not filed in good
faith (but such presumption may be rebutted by
clear and convincing evidence to the contrary)—
‘‘(A) as to all creditors if—
‘‘(i) two or more previous cases under
this title in which the individual was a
debtor were pending within the 1-year pe-
riod;
‘‘(ii) a previous case under this title in
which the individual was a debtor was dis-
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missed within the time period stated in
this paragraph after the debtor failed to
file or amend the petition or other docu-
ments as required by this title or the court
without substantial excuse (but mere inad-
vertence or negligence shall not be sub-
stantial excuse unless the dismissal was
caused by the negligence of the debtor’s at-
torney), failed to provide adequate protec-
tion as ordered by the court, or failed to
perform the terms of a plan confirmed by
the court; or
‘‘(iii) there has not been a substantial
change in the financial or personal affairs
of the debtor since the dismissal of the
next most previous case under this title, or
there is not any other reason to conclude
that the later case will be concluded, if a
case under chapter 7, with a discharge,
and if a case under chapter 11 or 13, with
a confirmed plan that will be fully per-
formed; or
‘‘(B) as to any creditor that commenced an
action under subsection (d) in a previous case
in which the individual was a debtor if, as of
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the date of dismissal of such case, such action
was still pending or had been resolved by termi-
nating, conditioning, or limiting the stay as to
action of such creditor.’’.
SEC. 118. CURBING ABUSIVE FILINGS.
(a) IN GENERAL.—Section 362(d) of title 11, United
States Code, is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the
end;
(2) in paragraph (3), by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(4) with respect to a stay of an act against
real property under subsection (a), by a creditor
whose claim is secured by an interest in such real
estate, if the court finds that the filing of the bank-
ruptcy petition was part of a scheme to delay,
hinder, and defraud creditors that involved either—
‘‘(A) transfer of all or part ownership of,
or other interest in, the real property without
the consent of the secured creditor or court ap-
proval; or
‘‘(B) multiple bankruptcy filings affecting
the real property.
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If recorded in compliance with applicable State laws gov-
erning notices of interests or liens in real property, an
order entered pursuant to this subsection shall be binding
in any other case under this title purporting to affect the
real property filed not later than 2 years after that record-
ing, except that a debtor in a subsequent case may move
for relief from such order based upon changed cir-
cumstances or for good cause shown, after notice and a
hearing. Any Federal, State, or local governmental unit
which accepts notices of interests or liens in real property
shall accept any certified copy of an order described in
this subsection for indexing and recording.’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, is amended—
(1) in paragraph (17), by striking ‘‘or’’ at the
end;
(2) in paragraph (18) by striking the period at
the end and inserting a semicolon; and
(3) by inserting after paragraph (18) the fol-
lowing:
‘‘(19) under subsection (a), of any act to en-
force any lien against or security interest in real
property following the entry of an order under sec-
tion 362(d)(4) of this title as to that property in any
prior bankruptcy case for a period of 2 years after
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entry of such an order. The debtor in a subsequent
case, however, may move the court for relief from
such order based upon changed circumstances or for
other good cause shown (consistent with the stand-
ards for good faith in subsection (c)), after notice
and a hearing; or
‘‘(20) under subsection (a), of any act to en-
force any lien against or security interest in real
property—
‘‘(A) if the debtor is ineligible under sec-
tion 109(g) of this title to be a debtor in a
bankruptcy case; or
‘‘(B) if the bankruptcy case was filed in
violation of a bankruptcy court order in a prior
bankruptcy case prohibiting the debtor from
being a debtor in another bankruptcy case.’’.
SEC. 119. DEBTOR RETENTION OF PERSONAL PROPERTY
SECURITY.
Title 11, United States Code, is amended—
(1) in section 521—
(A) in paragraph (4) by striking ‘‘, and’’
at the end and inserting a semicolon;
(B) in paragraph (5) by striking the period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
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‘‘(6) in an individual case under chapter 7 of
this title, not retain possession of personal property
as to which a creditor has an allowed claim for the
purchase price secured in whole or in part by an in-
terest in that personal property unless, in the case
of an individual debtor, the debtor takes one of the
following actions within 45 days after the first meet-
ing of creditors under section 341(a)—
‘‘(A) enters into an agreement with the
creditor pursuant to section 524(c) of this title
with respect to the claim secured by such prop-
erty; or
‘‘(B) redeems such property from the secu-
rity interest pursuant to section 722 of this
title.
‘‘If the debtor fails to so act within the 45-day pe-
riod, the stay under section 362(a) of this title is
terminated with respect to the personal property of
the estate or of the debtor which is affected, such
property shall no longer be property of the estate,
and the creditor may take whatever action as to
such property as is permitted by applicable nonbank-
ruptcy law, unless the court determines on the mo-
tion of the trustee brought before the expiration of
such 45-day period, and after notice and a hearing,
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that such property is of consequential value or ben-
efit to the estate, orders appropriate adequate pro-
tection of the creditor’s interest, and orders the
debtor to deliver any collateral in the debtor’s pos-
session to the trustee.’’; and
(2) in section 722 by inserting ‘‘in full at the
time of redemption’’ before the period at the end.
SEC. 120. RELIEF FROM THE AUTOMATIC STAY WHEN THE
DEBTOR DOES NOT COMPLETE INTENDED
SURRENDER OF CONSUMER DEBT COLLAT-
ERAL.
Title 11, United States Code, is amended as
follows—
(1) in section 362—
(A) by striking ‘‘(e), and (f)’’ in subsection
(c) and inserting in lieu thereof ‘‘(e), (f), and
(h)’’; and
(B) by redesignating subsection (h) as sub-
section (i) and by inserting after subsection (g)
the following:
‘‘(h) In an individual case pursuant to chapter 7, 11,
or 13 the stay provided by subsection (a) is terminated
with respect to personal property of the estate or of the
debtor securing in whole or in part a claim, or subject
to an unexpired lease, and such personal property shall
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no longer be property of the estate if the debtor fails with-
in the applicable time set by section 521(a)(2) of this
title—
‘‘(1) to file timely any statement of intention
required under section 521(a)(2) of this title with
respect to that property or to indicate therein that
the debtor will either surrender the property or re-
tain it and, if retaining it, either redeem the prop-
erty pursuant to section 722 of this title, reaffirm
the debt it secures pursuant to section 524(c) of this
title, or assume the unexpired lease pursuant to sec-
tion 365(p) of this title if the trustee does not do
so, as applicable; or
‘‘(2) to take timely the action specified in that
statement of intention, as it may be amended before
expiration of the period for taking action, unless the
statement of intention specifies reaffirmation and
the creditor refuses to reaffirm on the original con-
tract terms;
unless the court determines on the motion of the trustee
filed before the expiration of the applicable time set by
section 521(a)(2), and after notice and a hearing, that
such property is of consequential value or benefit to the
estate, orders appropriate adequate protection of the
creditor’s interest, and orders the debtor to deliver any
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collateral in the debtor’s possession to the trustee. If the
court does not so determine an order, the stay shall termi-
nate upon the conclusion of the proceeding on the mo-
tion.’’; and
(2) in section 521, as amended by sections 603
and 604—
(A) in paragraph (2) by striking ‘‘con-
sumer’’;
(B) in paragraph (2)(B)—
(i) by striking ‘‘forty-five days after
the filing of a notice of intent under this
section’’ and inserting ‘‘30 days after the
first date set for the meeting of creditors
under section 341(a) of this title’’; and
(ii) by striking ‘‘forty-five day’’ the
second place it appears and inserting ‘‘30-
day’’;
(C) in paragraph (2)(C) by inserting ‘‘ex-
cept as provided in section 362(h) of this title’’
before the semicolon; and
(D) by inserting after subsection (b) the
following:
‘‘(c) If the debtor fails timely to take the action speci-
fied in subsection (a)(6) of this section, or in paragraphs
(1) and (2) of section 362(h) of this title, with respect
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to property which a lessor or bailor owns and has leased,
rented, or bailed to the debtor or as to which a creditor
holds a security interest not otherwise voidable under sec-
tion 522(f), 544, 545, 547, 548, or 549 of this title, noth-
ing in this title shall prevent or limit the operation of a
provision in the underlying lease or agreement which has
the effect of placing the debtor in default under such lease
or agreement by reason of the occurrence, pendency, or
existence of a proceeding under this title or the insolvency
of the debtor. Nothing in this subsection shall be deemed
to justify limiting such a provision in any other cir-
cumstance.’’.
SEC. 121. GIVING SECURED CREDITORS FAIR TREATMENT
IN CHAPTER 13.
Section 1325(a)(5)(B)(i) of title 11, United States
Code, is amended to read as follows:
‘‘(i) the plan provides that the holder of
such claim retain the lien securing such claim
until the earlier of payment of the underlying
debt determined under nonbankruptcy law or
discharge under section 1328 of this title, and
that if the case under this chapter is dismissed
or converted without completion of the plan,
such lien shall also be retained by such holder
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to the extent recognized by applicable nonbank-
ruptcy law; and’’.
SEC. 122. RESTRAINING ABUSIVE PURCHASES ON SECURED
CREDIT.
Section 506 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) In an individual case under chapter 7, 11, 12,
or 13—
‘‘(1) subsection (a) shall not apply to an al-
lowed claim to the extent attributable in whole or in
part to the purchase price of personal property ac-
quired by the debtor within 5 years of the filing of
the petition, except for the purpose of applying para-
graph (3) of this subsection;
‘‘(2) if such allowed claim attributable to the
purchase price is secured only by the personal prop-
erty so acquired, the value of the personal property
and the amount of the allowed secured claim shall
be the sum of the unpaid principal balance of the
purchase price and accrued and unpaid interest and
charges at the contract rate;
‘‘(3) if such allowed claim attributable to the
purchase price is secured by the personal property so
acquired and other property, the value of the secu-
rity may be determined under subsection (a), but the
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value of the security and the amount of the allowed
secured claim shall be not less than the unpaid prin-
cipal balance of the purchase price of the personal
property acquired and unpaid interest and charges
at the contract rate; and
‘‘(4) in any subsequent case under this title
that is filed by or against the debtor in the 2-year
period beginning on the date the petition is filed in
the original case, the value of the personal property
and the amount of the allowed secured claim shall
be deemed to be not less than the amount provided
under paragraphs (2) and (3) less any payments ac-
tually received.’’.
SEC. 123. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code, is
amended by adding at the end the following:
‘‘In the case of an individual debtor under chapters 7 and
13, such value with respect to personal property securing
an allowed claim shall be determined based on the replace-
ment value of such property as of the date of filing the
petition without deduction for costs of sale or marketing.
With respect to property acquired for personal, family, or
household purpose, replacement value shall mean the price
a retail merchant would charge for property of that kind
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considering the age and condition of the property at the
time value is determined.’’.
SEC. 124. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.
Section 522(b)(2)(A) of title 11, United States Code,
is amended—
(1) by striking ‘‘180’’ and inserting ‘‘730’’; and
(2) by striking ‘‘, or for a longer portion of
such 180-day period than in any other place’’ and
inserting ‘‘or if the debtor’s domicile has not been
located at a single State for such 730-day period,
the place in which the debtor’s domicile was located
for 180 days immediately preceding the 730-day pe-
riod or for a longer portion of such 180-day period
than in any other place’’.
SEC. 125. RESTRICTIONS ON CERTAIN EXEMPT PROPERTY
OBTAINED THROUGH FRAUD.
Section 522 of title 11, United States Code, as
amended by section 113, is amended—
(1) in subsection (b)(2)(A) by inserting ‘‘sub-
ject to subsection (o),’’ before ‘‘any property’’; and
(2) by adding at the end the following:
‘‘(o) For purposes of subsection (b)(3)(A) and not-
withstanding subsection (a), the value of an interest in—
‘‘(1) real or personal property that the debtor
or a dependent of the debtor uses as a residence;
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‘‘(2) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a resi-
dence; or
‘‘(3) a burial plot for the debtor or a dependent
of the debtor,
shall be reduced to the extent such value is attributable
to any portion of any property that the debtor disposed
of in the 730-day period ending of the date of the filing
of the petition, with the intent to hinder, delay, or defraud
a creditor and that the debtor could not exempt, or that
portion that the debtor could not exempt, under subsection
(b) if on such date the debtor had held the property so
disposed of.’’.
SEC. 126. ROLLING STOCK EQUIPMENT.
(a) IN GENERAL.—Section 1168 of title 11, United
States Code, is amended to read as follows:
‘‘§ 1168. Rolling stock equipment
‘‘(a)(1) The right of a secured party with a security
interest in or of a lessor or conditional vendor of equip-
ment described in paragraph (2) to take possession of such
equipment in compliance with an equipment security
agreement, lease, or conditional sale contract, and to en-
force any of its other rights or remedies under such secu-
rity agreement, lease, or conditional sale contract, to sell,
lease, or otherwise retain or dispose of such equipment,
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is not limited or otherwise affected by any other provision
of this title or by any power of the court, except that the
right to take possession and enforce those other rights and
remedies shall be subject to section 362 of this title, if—
‘‘(A) before the date that is 60 days after the
date of commencement of a case under this chapter,
the trustee, subject to the court’s approval, agrees to
perform all obligations of the debtor under such se-
curity agreement, lease, or conditional sale contract;
and
‘‘(B) any default, other than a default of a kind
described in section 365(b)(2) of this title, under
such security agreement, lease, or conditional sale
contract—
‘‘(i) that occurs before the date of com-
mencement of the case and is an event of de-
fault therewith is cured before the expiration of
such 60-day period;
‘‘(ii) that occurs or becomes an event of
default after the date of commencement of the
case and before the expiration of such 60-day
period is cured before the later of—
‘‘(I) the date that is 30 days after the
date of the default or event of the default;
or
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‘‘(II) the expiration of such 60-day
period; and
‘‘(iii) that occurs on or after the expiration
of such 60-day period is cured in accordance
with the terms of such security agreement,
lease, or conditional sale contract, if cure is per-
mitted under that agreement, lease, or condi-
tional sale contract.
‘‘(2) The equipment described in this paragraph—
‘‘(A) is rolling stock equipment or accessories
used on rolling stock equipment, including super-
structures or racks, that is subject to a security in-
terest granted by, leased to, or conditionally sold to
a debtor; and
‘‘(B) includes all records and documents relat-
ing to such equipment that are required, under the
terms of the security agreement, lease, or conditional
sale contract, that is to be surrendered or returned
by the debtor in connection with the surrender or re-
turn of such equipment.
‘‘(3) Paragraph (1) applies to a secured party, lessor,
or conditional vendor acting in its own behalf or acting
as trustee or otherwise in behalf of another party.
‘‘(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is pro-
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tected under subsection (a) may agree, subject to the
court’s approval, to extend the 60-day period specified in
subsection (a)(1).
‘‘(c)(1) In any case under this chapter, the trustee
shall immediately surrender and return to a secured party,
lessor, or conditional vendor, described in subsection
(a)(1), equipment described in subsection (a)(2), if at any
time after the date of commencement of the case under
this chapter such secured party, lessor, or conditional ven-
dor is entitled pursuant to subsection (a)(1) to take pos-
session of such equipment and makes a written demand
for such possession of the trustee.
‘‘(2) At such time as the trustee is required under
paragraph (1) to surrender and return equipment de-
scribed in subsection (a)(2), any lease of such equipment,
and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or
conditional sale contract is an executory contract, shall be
deemed rejected.
‘‘(d) With respect to equipment first placed in service
on or prior to October 22, 1994, for purposes of this
section—
‘‘(1) the term ‘lease’ includes any written agree-
ment with respect to which the lessor and the debt-
or, as lessee, have expressed in the agreement or in
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a substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal in-
come tax purposes; and
‘‘(2) the term ‘security interest’ means a pur-
chase-money equipment security interest.
‘‘(e) With respect to equipment first placed in service
after October 22, 1994, for purposes of this section, the
term ‘rolling stock equipment’ includes rolling stock equip-
ment that is substantially rebuilt and accessories used on
such equipment.’’.
(b) AIRCRAFT EQUIPMENT AND VESSELS.—Section
1110 of title 11, United States Code, is amended to read
as follows:
‘‘§ 1110. Aircraft equipment and vessels
‘‘(a)(1) Except as provided in paragraph (2) and sub-
ject to subsection (b), the right of a secured party with
a security interest in equipment described in paragraph
(3), or of a lessor or conditional vendor of such equipment,
to take possession of such equipment in compliance with
a security agreement, lease, or conditional sale contract,
and to enforce any of its other rights or remedies, under
such security agreement, lease, or conditional sale con-
tract, to sell, lease, or otherwise retain or dispose of such
equipment, is not limited or otherwise affected by any
other provision of this title or by any power of the court.
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‘‘(2) The right to take possession and to enforce the
other rights and remedies described in paragraph (1) shall
be subject to section 362 of this title if—
‘‘(A) before the date that is 60 days after the
date of the order for relief under this chapter, the
trustee, subject to the approval of the court, agrees
to perform all obligations of the debtor under such
security agreement, lease, or conditional sale con-
tract; and
‘‘(B) any default, other than a default of a kind
specified in section 365(b)(2) of this title, under
such security agreement, lease, or conditional sale
contract—
‘‘(i) that occurs before the date of the
order is cured before the expiration of such 60-
day period;
‘‘(ii) that occurs after the date of the order
and before the expiration of such 60-day period
is cured before the later of—
‘‘(I) the date that is 30 days after the
date of the default; or
‘‘(II) the expiration of such 60-day
period; and
‘‘(iii) that occurs on or after the expiration
of such 60-day period is cured in compliance
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with the terms of such security agreement,
lease, or conditional sale contract, if a cure is
permitted under that agreement, lease, or con-
tract.
‘‘(3) The equipment described in this paragraph—
‘‘(A) is—
‘‘(i) an aircraft, aircraft engine, propeller,
appliance, or spare part (as defined in section
40102 of title 49) that is subject to a security
interest granted by, leased to, or conditionally
sold to a debtor that, at the time such trans-
action is entered into, holds an air carrier oper-
ating certificate issued pursuant to chapter 447
of title 49 for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of
cargo; or
‘‘(ii) a documented vessel (as defined in
section 30101(1) of title 46) that is subject to
a security interest granted by, leased to, or con-
ditionally sold to a debtor that is a water car-
rier that, at the time such transaction is en-
tered into, holds a certificate of public conven-
ience and necessity or permit issued by the De-
partment of Transportation; and
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‘‘(B) includes all records and documents relat-
ing to such equipment that are required, under the
terms of the security agreement, lease, or conditional
sale contract, to be surrendered or returned by the
debtor in connection with the surrender or return of
such equipment.
‘‘(4) Paragraph (1) applies to a secured party, lessor,
or conditional vendor acting in its own behalf or acting
as trustee or otherwise in behalf of another party.
‘‘(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is pro-
tected under subsection (a) may agree, subject to the ap-
proval of the court, to extend the 60-day period specified
in subsection (a)(1).
‘‘(c)(1) In any case under this chapter, the trustee
shall immediately surrender and return to a secured party,
lessor, or conditional vendor, described in subsection
(a)(1), equipment described in subsection (a)(3), if at any
time after the date of the order for relief under this chap-
ter such secured party, lessor, or conditional vendor is en-
titled pursuant to subsection (a)(1) to take possession of
such equipment and makes a written demand for such pos-
session to the trustee.
‘‘(2) At such time as the trustee is required under
paragraph (1) to surrender and return equipment de-
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scribed in subsection (a)(3), any lease of such equipment,
and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or
conditional sale contract is an executory contract, shall be
deemed rejected.
‘‘(d) With respect to equipment first placed in service
on or before October 22, 1994, for purposes of this
section—
‘‘(1) the term ‘lease’ includes any written agree-
ment with respect to which the lessor and the debt-
or, as lessee, have expressed in the agreement or in
a substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal in-
come tax purposes; and
‘‘(2) the term ‘security interest’ means a pur-
chase-money equipment security interest.’’.
SEC. 127. DISCHARGE UNDER CHAPTER 13.
Section 1328(a) of title 11, United States Code, is
amended by striking paragraphs (1) through (3) and in-
serting the following:
‘‘(1) provided for under section 1322(b)(5) of
this title;
‘‘(2) of the kind specified in paragraph (2), (4),
(3)(B), (5), (8), or (9) of section 523(a) of this title;
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‘‘(3) for restitution, or a criminal fine, included
in a sentence on the debtor’s conviction of a crime;
or
‘‘(4) for restitution, or damages, awarded in a
civil action against the debtor as a result of willful
or malicious injury by the debtor that caused per-
sonal injury to an individual or the death of an indi-
vidual.’’.
SEC. 128. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE.—This section may be cited as the
‘‘Bankruptcy Judgeship Act of 1999’’.
(b) TEMPORARY JUDGESHIPS.—
(1) APPOINTMENTS.—The following judgeship
positions shall be filled in the manner prescribed in
section 152(a)(1) of title 28, United States Code, for
the appointment of bankruptcy judges provided for
in section 152(a)(2) of such title:
(A) One additional bankruptcy judgeship
for the eastern district of California.
(B) Four additional bankruptcy judgeships
for the central district of California.
(C) One additional bankruptcy judgeship
for the southern district of Florida.
(D) Two additional bankruptcy judgeships
for the district of Maryland.
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(E) One additional bankruptcy judgeship
for the eastern district of Michigan.
(F) One additional bankruptcy judgeship
for the southern district of Mississippi.
(G) One additional bankruptcy judgeship
for the district of New Jersey.
(H) One additional bankruptcy judgeship
for the eastern district of New York.
(I) One additional bankruptcy judgeship
for the northern district of New York.
(J) One additional bankruptcy judgeship
for the southern district of New York.
(K) One additional bankruptcy judgeship
for the eastern district of Pennsylvania.
(L) One additional bankruptcy judgeship
for the middle district of Pennsylvania.
(M) One additional bankruptcy judgeship
for the western district of Tennessee.
(N) One additional bankruptcy judgeship
for the eastern district of Virginia.
(2) VACANCIES.—The first vacancy occurring in
the office of a bankruptcy judge in each of the judi-
cial districts set forth in paragraph (1) that—
(A) results from the death, retirement, res-
ignation, or removal of a bankruptcy judge; and
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(B) occurs 5 years or more after the ap-
pointment date of a bankruptcy judge ap-
pointed under paragraph (1),
shall not be filled.
(c) EXTENSIONS.—
(1) IN GENERAL.—The temporary bankruptcy
judgeship positions authorized for the northern dis-
trict of Alabama, the district of Delaware, the dis-
trict of Puerto Rico, the district of South Carolina,
and the eastern district of Tennessee under section
3(a)(1), (3), (7), (8), and (9) of the Bankruptcy
Judgeship Act of 1992 (28 U.S.C. 152 note) are ex-
tended until the first vacancy occurring in the office
of a bankruptcy judge in the applicable district re-
sulting from the death, retirement, resignation, or
removal of a bankruptcy judge and occurring—
(A) 8 years or more after November 8,
1993, with respect to the northern district of
Alabama;
(B) 10 years or more after October 28,
1993, with respect to the district of Delaware;
(C) 8 years or more after August 29,
1994, with respect to the district of Puerto
Rico;
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(D) 8 years or more after June 27, 1994,
with respect to the district of South Carolina;
and
(E) 8 years or more after November 23,
1993, with respect to the eastern district of
Tennessee.
(2) APPLICABILITY OF OTHER PROVISIONS.—
All other provisions of section 3 of the Bankruptcy
Judgeship Act of 1992 remain applicable to such
temporary judgeship position.
(d) TECHNICAL AMENDMENT.—The first sentence of
section 152(a)(1) of title 28, United States Code, is
amended to read as follows: ‘‘Each bankruptcy judge to
be appointed for a judicial district as provided in para-
graph (2) shall be appointed by the United States court
of appeals for the circuit in which such district is lo-
cated.’’.
(e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—
Section 156 of title 28, United States Code, is amended
by adding at the end the following new subsection:
‘‘(g)(1) In this subsection, the term ‘travel
expenses’—
‘‘(A) means the expenses incurred by a bank-
ruptcy judge for travel that is not directly related to
any case assigned to such bankruptcy judge; and
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‘‘(B) shall not include the travel expenses of a
bankruptcy judge if—
‘‘(i) the payment for the travel expenses is
paid by such bankruptcy judge from the per-
sonal funds of such bankruptcy judge; and
‘‘(ii) such bankruptcy judge does not re-
ceive funds (including reimbursement) from the
United States or any other person or entity for
the payment of such travel expenses.
‘‘(2) Each bankruptcy judge shall annually submit
the information required under paragraph (3) to the chief
bankruptcy judge for the district in which the bankruptcy
judge is assigned.
‘‘(3)(A) Each chief bankruptcy judge shall submit an
annual report to the Director of the Administrative Office
of the United States Courts on the travel expenses of each
bankruptcy judge assigned to the applicable district (in-
cluding the travel expenses of the chief bankruptcy judge
of such district).
‘‘(B) The annual report under this paragraph shall
include—
‘‘(i) the travel expenses of each bankruptcy
judge, with the name of the bankruptcy judge to
whom the travel expenses apply;
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‘‘(ii) a description of the subject matter and
purpose of the travel relating to each travel expense
identified under clause (i), with the name of the
bankruptcy judge to whom the travel applies; and
‘‘(iii) the number of days of each travel de-
scribed under clause (ii), with the name of the bank-
ruptcy judge to whom the travel applies.
‘‘(4)(A) The Director of the Administrative Office of
the United States Courts shall—
‘‘(i) consolidate the reports submitted under
paragraph (3) into a single report; and
‘‘(ii) annually submit such consolidated report
to Congress.
‘‘(B) The consolidated report submitted under this
paragraph shall include the specific information required
under paragraph (3)(B), including the name of each bank-
ruptcy judge with respect to clauses (i), (ii), and (iii) of
paragraph (3)(B).’’.
SEC. 129. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED
STATES CODE.
Section 507(a) of title 11, United States Code, is
amended by inserting after paragraph (9) the following:
‘‘(10) Tenth, allowed claims for death or per-
sonal injuries resulting from the operation of a
motor vehicle or vessel if such operation was unlaw-
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ful because the debtor was intoxicated from using al-
cohol, a drug or another substance.’’.
SEC. 130. AMENDMENT TO SECTION 1325 OF TITLE 11,
UNITED STATES CODE.
Section 1325(b) of title 11, United States Code, is
amended—
(1) in paragraph (1), by inserting ‘‘to unse-
cured creditors’’ after ‘‘to make payments’’;
(2) in paragraph (2)—
(A) by inserting ‘‘current monthly’’ before
‘‘income’’;
(B) by striking ‘‘and which is not’’ and in-
serting ‘‘less amounts’’;
(C) by inserting after ‘‘received by the
debtor’’, ‘‘(other than child support payments,
foster care payments, or disability payments for
a dependent child made in accordance with ap-
plicable nonbankruptcy law and which is rea-
sonably necessary to be expended)’’; and
(D) in subparagraph (A) by inserting after
‘‘dependent of the debtor’’ the following: ‘‘, as
determined 
in 
accordance 
with 
section
707(b)(2)(A) and if applicable 707(b)(2)(B)’’.
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SEC. 131. APPLICATION OF THE CODEBTOR STAY ONLY
WHEN THE STAY PROTECTS THE DEBTOR.
Section 1301(b) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(2) by adding at the end the following:
‘‘(2)(A) Notwithstanding subsection (c) and except as
provided in subparagraph (B), in any case in which the
debtor did not receive the consideration for the claim held
by a creditor, the stay provided by subsection (a) shall
apply to that creditor for a period not to exceed 30 days
beginning on the date of the order for relief, to the extent
the creditor proceeds against—
‘‘(i) the individual that received that consider-
ation; or
‘‘(ii) property not in the possession of the debt-
or that secures that claim.
‘‘(B) Notwithstanding subparagraph (A), the stay
provided by subsection (a) shall apply in any case in which
the debtor is primarily obligated to pay the creditor in
whole or in part with respect to a claim described in sub-
paragraph (A) under a legally binding separation or prop-
erty settlement agreement or divorce or dissolution decree
with respect to—
‘‘(i) an individual described in subparagraph
(A)(i); or
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(1) in paragraph (19) by striking ‘‘or’’ at the
end;
(2) in paragraph (20) by striking the period at
the end and a inserting ‘‘; or’’; and
(3) by inserting after paragraph (20) the fol-
lowing:
‘‘(21) under subsection (a), of the commence-
ment or continuation of an investigation or action by
a securities self regulatory organization to enforce
such organization’s regulatory power; of the enforce-
ment of an order or decision, other than for mone-
tary sanctions, obtained in an action by the securi-
ties self regulatory organization to enforce such or-
ganization’s regulatory power; or of any act taken by
the securities self regulatory organization to delist,
delete, or refuse to permit quotation of any stock
that does not meet applicable regulatory require-
ments.’’.
SEC. 133. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States Code,
is amended to read as follows:
‘‘(C)(i) for purposes of subparagraph (A),
consumer debts owed to a single creditor and
aggregating more than $250 for ‘luxury goods
or services’ incurred by an individual debtor on
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or within 90 days before the order for relief
under this title, or cash advances aggregating
more than $250 that are extensions of con-
sumer credit under an open end credit plan ob-
tained by an individual debtor on or within 90
days before the order for relief under this title,
are presumed to be nondischargeable; and
‘‘(ii) for purposes of this subparagraph—
‘‘(I) the term ‘luxury goods or serv-
ices’ does not include goods or services rea-
sonably necessary for the support or main-
tenance of the debtor or a dependent of the
debtor; and
‘‘(II) the term ‘an extension of con-
sumer credit under an open end credit
plan’ has the same meaning such term has
for purposes of the Consumer Credit Pro-
tection Act;’’.
SEC. 134. ALLOWING THE DEBTOR TO RETAIN LEASED PER-
SONAL PROPERTY BY ASSUMPTION.
Section 365 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(p)(1) If a lease of personal property is rejected or
not timely assumed by the trustee under subsection (d),
the leased property is no longer property of the estate and
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the stay under section 362(a) of this title is automatically
terminated.
‘‘(2) In the case of an individual under chapter 7,
the debtor may notify the creditor in writing that the debt-
or desires to assume the lease. Upon being so notified,
the creditor may, at its option, notify the debtor that it
is willing to have the lease assumed by the debtor and
may, at its option, condition such assumption on cure of
any outstanding default on terms set by the contract. If
within 30 days of the notice from the creditor the debtor
notifies the lessor in writing that the lease is assumed,
the liability under the lease will be assumed by the debtor
and not by the estate. The stay under section 362 of this
title and the injunction under section 524(a) of this title
shall not be violated by notification of the debtor and ne-
gotiation of cure under this subsection. Nothing in this
paragraph shall require a debtor to assume a lease, or a
creditor to permit assumption.
‘‘(3) In a case under chapter 11 of this title in which
the debtor is an individual and in a case under chapter
13 of this title, if the debtor is the lessee with respect
to personal property and the lease is not assumed in the
plan confirmed by the court, the lease is deemed rejected
as of the conclusion of the hearing on confirmation. If the
lease is rejected, the stay under section 362 of this title
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and any stay under section 1301 is automatically termi-
nated with respect to the property subject to the lease.’’.
SEC. 135. ADEQUATE PROTECTION OF LESSORS AND PUR-
CHASE MONEY SECURED CREDITORS.
(a) IN GENERAL.—Chapter 13 of title 11, United
States Code, is amended by adding after section 1307 the
following:
‘‘§ 1307A. Adequate protection in chapter 13 cases
‘‘(a)(1)(A) On or before the date that is 30 days after
the filing of a case under this chapter, the debtor shall
make cash payments in an amount determined under
paragraph (2), to—
‘‘(i) any lessor of personal property; and
‘‘(ii) any creditor holding a claim secured by
personal property to the extent that the claim is at-
tributable to the purchase of that property by the
debtor.
‘‘(B) The debtor or the plan shall continue making
the adequate protection payments required under subpara-
graph (A) until the earlier of the date on which—
‘‘(i) the creditor begins to receive actual pay-
ments under the plan; or
‘‘(ii) the debtor relinquishes possession of the
property referred to in subparagraph (A) to—
‘‘(I) the lessor or creditor; or
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‘‘(II) any third party acting under claim of
right, as applicable.
‘‘(2) The payments referred to in paragraph (1)(A)
shall be the contract amount and shall reduce any amount
payable under section 1326(a) of the title.
‘‘(b)(1) Subject to the limitations under paragraph
(2), the court may, after notice and hearing, change the
amount and timing of the dates of payment of payments
made under subsection (a).
‘‘(2)(A) The payments referred to in paragraph (1)
shall be payable not less frequently than monthly.
‘‘(B) The amount of payments referred to in para-
graph (1) shall not be less than the amount of any weekly,
biweekly, monthly, or other periodic payment scheduled as
payable under the contract between the debtor and cred-
itor.
‘‘(c) Notwithstanding section 1326(b), the payments
referred to in subsection (a)(1)(A) shall be continued in
addition to plan payments under a confirmed plan until
actual payments to the creditor begin under that plan, if
the confirmed plan provides—
‘‘(1) for payments to a creditor or lessor de-
scribed in subsection (a)(1); and
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‘‘(2) for the deferral of payments to such cred-
itor or lessor under the plan until the payment of
amounts described in section 1326(b).
‘‘(d) Notwithstanding sections 362, 542, and 543, a
lessor or creditor described in subsection (a) may retain
possession of property described in that subsection that
was obtained in accordance with applicable law before the
date of filing of the petition until the first payment under
subsection (a)(1)(A) is received by the lessor or creditor.
‘‘(e) On or before 60 days after the filling of a case
under this chapter, a debtor retaining possession of per-
sonal property subject to a lease or securing a claim attrib-
utable in whole or in part to the purchase price of such
property shall provide each creditor or lessor reasonable
evidence of the maintenance of any required insurance
coverage with respect to the use or ownership of such
property and continue to do so for so long as the debtor
retains possession of such property.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 13 of title 11, United States
Code, is amended by inserting after the item relating to
section 1307 the following:
‘‘1307A. Adequate protection in chapter 13 cases.’’.
SEC. 136. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as
amended by sections 118 and 132, is amended—
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(1) in paragraph (20), by striking ‘‘or’’ at the
end;
(2) in paragraph (21), by striking the period at
the end and inserting a semicolon; and
(3) by inserting after paragraph (21) the fol-
lowing:
‘‘(22) under subsection (a) of any transfer that
is not avoidable under section 544 of this title and
that is not avoidable under section 549 of this title;
‘‘(23) under subsection (a)(3), of the continu-
ation of any eviction, unlawful detainer action, or
similar proceeding by a lessor against a debtor in-
volving residential real property in which the debtor
resides as a tenant under a rental agreement and
the debtor has not paid rent to the lessor pursuant
to the terms of the lease agreement or applicable
State law after the commencement and during the
course of the case;
‘‘(24) under subsection (a)(3), of the com-
mencement or continuation of any eviction, unlawful
detainer action, or similar proceeding by a lessor
against a debtor involving residential real property
in which the debtor resides as a tenant under a rent-
al agreement that has terminated pursuant to the
lease agreement or applicable State law;
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‘‘(25) under subsection (a)(3), of any eviction,
unlawful detainer action, or similar proceeding, if
the debtor has previously filed within the last year
and failed to pay post-petition rent during the
course of that case; or
‘‘(26) under subsection (a)(3), of eviction ac-
tions based on endangerment to property or person
or the use of illegal drugs.’’.
SEC. 137. EXTEND PERIOD BETWEEN BANKRUPTCY DIS-
CHARGES.
Title 11, United States Code, is amended—
(1) in section 727(a)(8) by striking ‘‘six’’ and
inserting ‘‘8’’; and
(2) in section 1328 by adding at the end the
following:
‘‘(f) Notwithstanding subsections (a) and (b), the
court shall not grant a discharge of all debts provided for
by the plan or disallowed under section 502 of this title
if the debtor has received a discharge in any case filed
under this title within 5 years of the order for relief under
this chapter.’’.
SEC. 138. DEFINITION OF DOMESTIC SUPPORT OBLIGA-
TION.
Section 101 of title 11, United States Code, is
amended—
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(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the fol-
lowing:
‘‘(14A) ‘domestic support obligation’ means a
debt that accrues before or after the entry of an
order for relief under this title that is—
‘‘(A) owed to or recoverable by—
‘‘(i) a spouse, former spouse, or child
of the debtor or that child’s legal guardian;
or
‘‘(ii) a governmental unit;
‘‘(B) in the nature of alimony, mainte-
nance, or support (including assistance provided
by a governmental unit) of such spouse, former
spouse, or child, without regard to whether such
debt is expressly so designated;
‘‘(C) established or subject to establish-
ment before or after entry of an order for relief
under this title, by reason of applicable provi-
sions of—
‘‘(i) a separation agreement, divorce
decree, or property settlement agreement;
‘‘(ii) an order of a court of record; or
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‘‘(iii) a determination made in accord-
ance with applicable nonbankruptcy law by
a governmental unit; and
‘‘(D) not assigned to a nongovernmental
entity, unless that obligation is assigned volun-
tarily by the spouse, former spouse, child, or
parent solely for the purpose of collecting the
debt.’’.
SEC. 139. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP-
PORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is
amended—
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through
(6) as paragraphs (2) through (7), respectively;
(3) in paragraph (2), as redesignated, by strik-
ing ‘‘First’’ and inserting ‘‘Second’’;
(4) in paragraph (3), as redesignated, by strik-
ing ‘‘Second’’ and inserting ‘‘Third’’;
(5) in paragraph (4), as redesignated, by strik-
ing ‘‘Third’’ and inserting ‘‘Fourth’’;
(6) in paragraph (5), as redesignated, by strik-
ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;
(7) in paragraph (6), as redesignated, by strik-
ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;
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(8) in paragraph (7), as redesignated, by strik-
ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and
(9) by inserting before paragraph (2), as redes-
ignated, the following:
‘‘(1) First, allowed claims for domestic support
obligations to be paid in the following order on the
condition that funds received under this paragraph
by a governmental unit in a case under this title be
applied:
‘‘(A) Claims that, as of the date of entry
of the order for relief, are owed directly to a
spouse, former spouse, or child of the debtor, or
the parent of such child, without regard to
whether the claim is filed by the spouse, former
spouse, child, or parent, or is filed by a govern-
mental unit on behalf of that person.
‘‘(B) Claims that, as of the date of entry
of the order for relief, are assigned by a spouse,
former spouse, child of the debtor, or the par-
ent of that child to a governmental unit or are
owed directly to a governmental unit under ap-
plicable nonbankruptcy law.’’.
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SEC. 140. REQUIREMENTS TO OBTAIN CONFIRMATION AND
DISCHARGE IN CASES INVOLVING DOMESTIC
SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended—
(1) in section 1129(a), by adding at the end the
following:
‘‘(14) If the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or statute for such obliga-
tion that become payable after the date on which the
petition is filed.’’;
(2) in section 1325(a)—
(A) in paragraph (5), by striking ‘‘and’’ at
the end;
(B) in paragraph (6), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(7) if the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order for such obligation that
become payable after the date on which the petition
is filed.’’; and
(3) in section 1328(a), as amended by section
127, in the matter preceding paragraph (1), by in-
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serting ‘‘, and with respect to a debtor who is re-
quired by a judicial or administrative order to pay
a domestic support obligation, certifies that all
amounts payable under such order or statute that
are due on or before the date of the certification (in-
cluding amounts due before or after the petition was
filed) have been paid’’ after ‘‘completion by the debt-
or of all payments under the plan’’.
SEC. 141. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, as
amended by sections 118, 132, and 136, is amended—
(1) by striking paragraph (2) and inserting the
following:
‘‘(2) under subsection (a)—
‘‘(A) of the commencement or continuation
of an action or proceeding for—
‘‘(i) the establishment of paternity; or
‘‘(ii) the establishment or modification
of an order for domestic support obliga-
tions; or
‘‘(B) the collection of a domestic support
obligation from property that is not property of
the estate;’’;
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(2) in paragraph (25), by striking ‘‘or’’ at the
end;
(3) in paragraph (26), by striking the period at
the end and inserting a semicolon; and
(4) by inserting after paragraph (26) the fol-
lowing:
‘‘(27) under subsection (a) with respect to the
withholding of income pursuant to an order as speci-
fied in section 466(b) of the Social Security Act (42
U.S.C. 666(b)); or
‘‘(28) under subsection (a) with respect to—
‘‘(A) the withholding, suspension, or re-
striction of drivers’ licenses, professional and
occupational licenses, and recreational licenses
pursuant to State law, as specified in section
466(a)(16) of the Social Security Act (42
U.S.C. 666(a)(16)) or with respect to the re-
porting of overdue support owed by an absent
parent to any consumer reporting agency as
specified in section 466(a)(7) of the Social Se-
curity Act (42 U.S.C. 666(a)(7));
‘‘(B) the interception of tax refunds, as
specified in sections 464 and 466(a)(3) of the
Social Security Act (42 U.S.C. 664 and
666(a)(3)); or
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‘‘(C) the enforcement of medical obliga-
tions as specified under title IV of the Social
Security Act (42 U.S.C. 601 et seq.).’’.
SEC. 142. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR
ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is
amended—
(1) in subsection (a), by striking paragraph (5)
and inserting the following:
‘‘(5) for a domestic support obligation;’’;
(2) in subsection (a)(15)—
(A) by inserting ‘‘or’’ after ‘‘court of
record,’’; and
(B) by striking ‘‘unless—’’ and all that fol-
lows through ‘‘debtor’’ the last place it appears;
and
(3) in subsection (c), by striking ‘‘(6), or (15)’’
each place it appears and inserting ‘‘or (6)’’.
SEC. 143. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is
amended—
(1) in subsection (c), by striking paragraph (1)
and inserting the following:
‘‘(1) a debt of a kind specified in paragraph (1)
or (5) of section 523(a) (in which case, notwith-
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standing any provision of applicable nonbankruptcy
law to the contrary, such property shall be liable for
a debt of a kind specified in section 523(a)(5);’’; and
(2) in subsection (f)(1)(A), by striking the dash
and all that follows through the end of the subpara-
graph and inserting ‘‘of a kind that is specified in
section 523(a)(5); or’’.
SEC. 144. PROTECTION OF DOMESTIC SUPPORT CLAIMS
AGAINST 
PREFERENTIAL 
TRANSFER 
MO-
TIONS.
Section 547(c)(7) of title 11, United States Code, is
amended to read as follows:
‘‘(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obligation;
or’’.
SEC. 145. CLARIFICATION OF MEANING OF HOUSEHOLD
GOODS.
Section 101 of title 11, United States Code, is
amended by inserting after paragraph (27) the following:
‘‘(27A) ‘household goods’ includes tangible per-
sonal property normally found in or around a resi-
dence, but does not include motorized vehicles used
for transportation purposes;’’.
100
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SEC. 146. NONDISCHARGEABLE DEBTS.
Section 523(a) of title 11, United States Code, is
amended by inserting after paragraph (14) the following:
‘‘(14A) incurred to pay a debt that is non-
dischargeable by reason of section 727, 1141,
1228(a), 1228(b), or 1328(c), or any other provision
of this subsection, if the debtor incurred the debt to
pay such a nondischargeable debt with the intent to
discharge in bankruptcy the newly-created debt, ex-
cept that all debts incurred to pay nondischargeable
debts, without regard to intent, are nondischargeable
if incurred within 90 days of the filing of the peti-
tion;’’.
SEC. 147. MONETARY LIMITATION ON CERTAIN EXEMPT
PROPERTY.
(a) AMENDMENT.—Section 522 of title 11, United
States Code, as amended by section 125, is amended—
(1) in subsection (b)(2)(A) by striking ‘‘sub-
section (o)’’ and inserting ‘‘subsections (o) and (p)’’
before ‘‘any property’’; and
(2) by adding at the end the following:
‘‘(p)(1) Except as provided in paragraphs (2) and
(3), as a result of electing under subsection (b)(3)(A) to
exempt property under State or local law, a debtor may
not exempt any interest that exceeds $250,000 in value,
in the aggregate, in—
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‘‘(A) real or personal property that the debtor
or a dependent of the debtor uses as a residence;
‘‘(B) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a resi-
dence; or
‘‘(C) a burial plot for the debtor or a dependent
of the debtor.
‘‘(2) The limitation under paragraph (1) shall not
apply to an exemption claimed under subsection (b)(3)(A)
by a family farmer for the principal residence of that
farmer.
‘‘(3) Paragraph (1) shall not apply to debtors if appli-
cable State law provides by statute that such paragraph
shall not apply to debtors.’’.
(b) APPLICATION OF AMENDMENT TO INDIVIDUAL
STATES.—(1) Section 522(p) of title 11, United States
Code, as added by subsection (a), shall not apply with re-
spect to a State before the end of the first regular session
of the State legislature following the date of the enactment
of this Act.
(2) For purposes of paragraph (1), the term ‘‘State’’
has the meaning given such term in section 101 of title
11, United States Code.
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SEC. 148. BANKRUPTCY FEES.
Section 1930 of title 28, United States Code, is
amended—
(1) in subsection (a) by striking ‘‘Notwith-
standing section 1915 of this title, the’’ and insert-
ing ‘‘The’’; and
(2) by adding at the end the following:
‘‘(f)(1) Pursuant to procedures prescribed by the Ju-
dicial Conference of the United States, the district court
or the bankruptcy court may waive the filing fee in a case
under chapter 7 of title 11 for an individual debtor who
is unable to pay such fee in installments. For purposes
of this paragraph, the term ‘filing fee’ means the filing
fee required by subsection (a), or any other fee prescribed
by the Judicial Conference under subsections (b) and (c)
that is payable to the clerk upon the commencement of
a case under chapter 7 of title 11, United States Code.
‘‘(2) The district court or the bankruptcy court may
also waive for such debtors other fees prescribed pursuant
to subsections (b) and (c).
‘‘(3) This subsection does not restrict the district
court or the bankruptcy court from waiving, in accordance
with Judicial Conference policy, fees prescribed pursuant
to such subsections for other debtors and creditors.’’.
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SEC. 149. COLLECTION OF CHILD SUPPORT.
(a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec-
tion 704 of title 11, United States Code, as amended by
section 102, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The trustee’’;
(2) in paragraph (9) by striking ‘‘and’’ at the
end;
(3) in paragraph (10) by striking the period
and inserting ‘‘; and’’; and
(4) by adding at the end the following:
‘‘(11) if, with respect to an individual debtor,
there is a claim for support of a child of the debtor
or a custodial parent of such child entitled to receive
priority under section 507(a)(1) of this title, provide
the applicable notification specified in subsection (b).
‘‘(b)(1) In any case described in subsection (a)(11),
the trustee shall—
‘‘(A)(i) notify in writing the holder of the claim
of the right of such holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act for the State in which the holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
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‘‘(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim; and
‘‘(iii) at such time as the debtor is granted a
discharge under section 727 of this title, notify the
holder of such claim and the State child support
agency of the State in which such holder resides
of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor; and
‘‘(III) with respect to the debtor’s case, the
name of each creditor that holds a claim that
is not discharged under paragraph (2), (4), or
(14A) of section 523(a) of this title or that was
reaffirmed by the debtor under section 524(c)
of this title.
‘‘(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject
of the notice, such holder or such agency may request from
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a creditor described in paragraph (1)(B)(iii)(III) the last
known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making such disclosure.’’.
(b) DUTIES OF TRUSTEE UNDER CHAPTER 13.—
Section 1302 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (4) by striking ‘‘and’’ at
the end;
(B) in paragraph (5) by striking the period
and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) if, with respect to an individual debtor,
there is a claim for support of a child of the debtor
or a custodial parent of such child entitled to receive
priority under section 507(a)(1) of this title, provide
the applicable notification specified in subsection
(d).’’; and
(2) by adding at the end the following:
‘‘(d)(1) In any case described in subsection (b)(6),
the trustee shall—
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‘‘(A)(i) notify in writing the holder of the claim
of the right of such holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act for the State in which the holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
‘‘(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim; and
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim;
‘‘(iii) at such time as the debtor is granted a
discharge under section 1328 of this title, notify the
holder of the claim and the State child support
agency of the State in which such holder resides
of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor; and
‘‘(III) with respect to the debtor’s case, the
name of each creditor that holds a claim that
is not discharged under paragraph (2), (4), or
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(14A) of section 523(a) of this title or that was
reaffirmed by the debtor under section 524(c)
of this title.
‘‘(2)(A) If, after receiving a notice under paragraph
(1)(B)(iii), a holder of a claim or a State child support
agency is unable to locate the debtor that is the subject
of the notice, such holder or such agency may request from
a creditor described in paragraph (1)(B)(iii) the last
known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making such disclosure.’’.
SEC. 150. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICI-
PANT CONTRIBUTIONS AND OTHER PROP-
ERTY FROM THE ESTATE.
(a) IN GENERAL.—Section 541(b) of title 11, United
States Code, is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(4)(B)(ii);
(2) by striking the period at the end of para-
graph (5) and inserting ‘‘; or’’; and
(3) by inserting after paragraph (5) the fol-
lowing:
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‘‘(7) any amount or interest in property to the
extent that an employer has withheld amounts from
the wages of employees for contribution to an em-
ployee benefit plan subject to title I of the Employee
Retirement Income Security Act of 1974, or to the
extent that the employer has received amounts as a
result of payments by participants or beneficiaries to
an employer for contribution to an employee benefit
plan subject to title I of the Employee Retirement
Income Security Act of 1974.’’.
(b) APPLICATION OF AMENDMENT.—The amendment
made by this section shall not apply to cases commenced
under title 11, United States Code, before the expiration
of the 180-day period beginning on the date of the enact-
ment of this Act.
SEC. 151. CLARIFICATION OF POSTPETITION WAGES AND
BENEFITS.
Section 503(b)(1)(A) of title 11, United States Code,
is amended to read as follows:
‘‘(A) the actual, necessary costs and expenses of
preserving the estate, including wages, salaries, or
commissions for services rendered after the com-
mencement of the case, and wages and benefits at-
tributable to any period of time after commencement
of the case as a result of the debtor’s violation of
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Federal law, without regard to when the original un-
lawful act occurred or to whether any services were
rendered;’’.
SEC. 152. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b)(2) of title 11, United States Code, is
amended—
(1) in subparagraph (A) by striking ‘‘or’’ at the
end;
(2) in subparagraph (B) by adding ‘‘or’’ at the
end; and
(3) by adding at the end the following:
‘‘(C) under subsection (a) of—
‘‘(i) the withholding of income for
payment of a domestic support obligation
pursuant to a judicial or administrative
order or statute for such obligation that
first becomes payable after the date on
which the petition is filed; or
‘‘(ii) the withholding of income for
payment of a domestic support obligation
owed directly to the spouse, former spouse
or child of the debtor or the parent of such
child, pursuant to a judicial or administra-
tive order or statute for such obligation
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that becomes payable before the date on
which the petition is filed unless the court
finds, after notice and hearing, that such
withholding would render the plan infeasi-
ble;’’.
SEC. 153. AUTOMATIC STAY INAPPLICABLE TO CERTAIN
PROCEEDINGS AGAINST THE DEBTOR.
Section 362(b)(2) of title 11, United States Code, as
amended by section 153, is amended—
(1) in subparagraph (B) by striking ‘‘or’’ at the
end;
(2) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) the commencement or continuation of
a proceeding concerning a child custody or visi-
tation;
‘‘(E) the commencement or continuation of
a proceeding alleging domestic violence; or
‘‘(F) the commencement or continuation of
a proceeding seeking a dissolution of marriage,
except to the extent the proceeding concerns
property of the estate;’’.
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SEC. 154. DISCLOSURES.
(a) DISCLOSURES.—Subchapter II of chapter 5 of
title 11, United States Code, as amended by section 106,
is amended by adding at the end the following:
‘‘§ 527. Disclosures
‘‘(a) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide the following no-
tices to the assisted person:
‘‘(1) the written notice required under section
342(b)(1) of this title; and
‘‘(2) to the extent not covered in the written no-
tice described in paragraph (1) of this section and
no later than three business days after the first date
on which a debt relief agency first offers to provide
any bankruptcy assistance services to an assisted
person, a clear and conspicuous written notice advis-
ing assisted persons of the following—
‘‘(A) all information the assisted person is
required to provide with a petition and there-
after during a case under this title must be
complete, accurate and truthful;
‘‘(B) all assets and all liabilities must be
completely and accurately disclosed in the docu-
ments filed to commence the case, and the re-
placement value of each asset as defined in sec-
tion 506 of this title must be stated in those
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documents where requested after reasonable in-
quiry to establish such value;
‘‘(C) current monthly income, the amounts
specified in section 707(b)(2) and, in a chapter
13 case, disposable income (determined in ac-
cordance with section 707(b)(2)) must be stated
after reasonable inquiry; and
‘‘(D) that information an assisted person
provides during their case may be audited pur-
suant to this title and that failure to provide
such information may result in dismissal of the
proceeding under this title or other sanction in-
cluding, in some instances, criminal sanctions.
‘‘(b) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide each assisted per-
son at the same time as the notices required under sub-
section (a)(1) with the following statement, to the extent
applicable, or one substantially similar. The statement
shall be clear and conspicuous and shall be in a single
document separate from other documents or notices pro-
vided to the assisted person:
‘‘ ‘IMPORTANT INFORMATION ABOUT BANK-
RUPTCY ASSISTANCE SERVICES FROM AN AT-
TORNEY 
OR 
BANKRUPTCY 
PETITION 
PRE-
PARER.
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‘‘ ‘If you decide to seek bankruptcy relief, you can
represent yourself, you can hire an attorney to represent
you, or you can get help in some localities from a bank-
ruptcy petition preparer who is not an attorney. THE
LAW REQUIRES AN ATTORNEY OR BANKRUPTCY
PETITION PREPARER TO GIVE YOU A WRITTEN
CONTRACT SPECIFYING WHAT THE ATTORNEY
OR BANKRUPTCY PETITION PREPARER WILL DO
FOR YOU AND HOW MUCH IT WILL COST. Ask to
see the contract before you hire anyone.
‘‘ ‘The following information helps you understand
what must be done in a routine bankruptcy case to help
you evaluate how much service you need. Although bank-
ruptcy can be complex, many cases are routine.
‘‘ ‘Before filing a bankruptcy case, either you or your
attorney should analyze your eligibility for different forms
of debt relief made available by the Bankruptcy Code and
which form of relief is most likely to be beneficial for you.
Be sure you understand the relief you can obtain and its
limitations. To file a bankruptcy case, documents called
a Petition, Schedules and Statement of Financial Affairs,
as well as in some cases a Statement of Intention need
to be prepared correctly and filed with the bankruptcy
court. You will have to pay a filing fee to the bankruptcy
court. Once your case starts, you will have to attend the
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required first meeting of creditors where you may be ques-
tioned by a court official called a ‘‘trustee’’ and by credi-
tors.
‘‘ ‘If you choose to file a chapter 7 case, you may be
asked by a creditor to reaffirm a debt. You may want help
deciding whether to do so and a creditor is not permitted
to coerce you into reaffirming your debts.
‘‘ ‘If you choose to file a chapter 13 case in which
you repay your creditors what you can afford over three
to five years, you may also want help with preparing your
chapter 13 plan and with the confirmation hearing on your
plan which will be before a bankruptcy judge.
‘‘ ‘If you select another type of relief under the Bank-
ruptcy Code other than chapter 7 or chapter 13, you will
want to find out what needs to be done from someone fa-
miliar with that type of relief.
‘‘ ‘Your bankruptcy case may also involve litigation.
You are generally permitted to represent yourself in litiga-
tion in bankruptcy court, but only attorneys, not bank-
ruptcy petition preparers, can give you legal advice.’.
‘‘(c) Except to the extent the debt relief agency pro-
vides the required information itself after reasonably dili-
gent inquiry of the assisted person or others so as to ob-
tain such information reasonably accurately for inclusion
on the petition, schedules or statement of financial affairs,
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a debt relief agency providing bankruptcy assistance to an
assisted person, to the extent permitted by nonbankruptcy
law, shall provide each assisted person at the time re-
quired for the notice required under subsection (a)(1) rea-
sonably sufficient information (which shall be provided in
a clear and conspicuous writing) to the assisted person
on how to provide all the information the assisted person
is required to provide under this title pursuant to section
521, including—
‘‘(1) how to value assets at replacement value,
determine current monthly income, the amounts
specified in section 707(b)(2)) and, in a chapter 13
case, how to determine disposable income in accord-
ance with section 707(b)(2) and related calculations;
‘‘(2) how to complete the list of creditors, in-
cluding how to determine what amount is owed and
what address for the creditor should be shown; and
‘‘(3) how to determine what property is exempt
and how to value exempt property at replacement
value as defined in section 506 of this title.
‘‘(d) A debt relief agency shall maintain a copy of
the notices required under subsection (a) of this section
for two years after the date on which the notice is given
the assisted person.’’.
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(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by section 106, is amended by inserting after the
item relating to section 526 the following:
‘‘527. Disclosures.’’.
SEC. 155. DEBTOR’S BILL OF RIGHTS.
Subchapter II of chapter 5 of title 11, United States
Code, as amended by sections 106 and 154, is amended
by adding at the end the following:
‘‘§ 528. Debtor’s bill of rights
‘‘(a) A debt relief agency shall—
‘‘(1) no later than five business days after the
first date on which a debt relief agency provides any
bankruptcy assistance services to an assisted person,
but prior to such assisted person’s petition under
this title being filed, execute a written contract with
the assisted person specifying clearly and conspicu-
ously the services the agency will provide the as-
sisted person and the basis on which fees or charges
will be made for such services and the terms of pay-
ment, and give the assisted person a copy of the
fully executed and completed contract in a form the
person can keep;
‘‘(2) disclose in any advertisement of bank-
ruptcy assistance services or of the benefits of bank-
ruptcy directed to the general public (whether in
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general media, seminars or specific mailings, tele-
phonic or electronic messages or otherwise) that the
services or benefits are with respect to proceedings
under this title, clearly and conspicuously using the
following statement: ‘We are a debt relief agency.
We help people file Bankruptcy petitions to obtain
relief under the Bankruptcy Code.’ or a substantially
similar statement. An advertisement shall be of
bankruptcy assistance services if it describes or of-
fers bankruptcy assistance with a chapter 13 plan,
regardless of whether chapter 13 is specifically men-
tioned, including such statements as ‘federally super-
vised repayment plan’ or ‘Federal debt restructuring
help’ or other similar statements which would lead
a reasonable consumer to believe that help with
debts was being offered when in fact in most cases
the help available is bankruptcy assistance with a
chapter 13 plan; and
‘‘(3) if an advertisement directed to the general
public indicates that the debt relief agency provides
assistance with respect to credit defaults, mortgage
foreclosures, lease eviction proceedings, excessive
debt, debt collection pressure, or inability to pay any
consumer debt, disclose conspicuously in that adver-
tisement that the assistance is with respect to or
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may involve proceedings under this title, using the
following statement: ‘We are a debt relief agency.
We help people file Bankruptcy petitions to obtain
relief under the Bankruptcy Code.’ or a substantially
similar statement.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by sections 106 and 154, is amended by inserting
after the item relating to section 527, the following:
‘‘528. Debtor’s bill of rights.’’.
TITLE II—DISCOURAGING
BANKRUPTCY ABUSE
SEC. 201. REENACTMENT OF CHAPTER 12.
(a) REENACTMENT.—Chapter 12 of title 11, United
States Code, as in effect on March 31, 1999, is hereby
reenacted.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on March 31, 1999.
SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY
HOLDERS.
Section 341 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) Notwithstanding subsections (a) and (b), the
court, on the request of a party in interest and after notice
and a hearing, for cause may order that the United States
trustee not convene a meeting of creditors or equity secu-
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rity holders if the debtor has filed a plan as to which the
debtor solicited acceptances prior to the commencement
of the case.’’.
SEC. 203. PROTECTION OF RETIREMENT SAVINGS IN BANK-
RUPTCY.
(a) IN GENERAL.—Section 522 of title 11, United
States Code, as amended by sections 113, 125, and 147
is amended—
(1) in subsection (b)—
(A) in paragraph (2)—
(i) by striking ‘‘(2)(A)’’ and inserting:
‘‘(3) Property listed in this paragraph is—
‘‘(A) subject to subsections (o) and (p),’’;
(ii) in subparagraph (B), by striking
‘‘and’’ at the end;
(iii) in subparagraph (C), by striking
the period at the end and inserting ‘‘;
and’’; and
(iv) by adding at the end the fol-
lowing:
‘‘(D) retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’;
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(B) by striking paragraph (1) and insert-
ing:
‘‘(2) Property listed in this paragraph is property
that is specified under subsection (d), unless the State law
that is applicable to the debtor under paragraph (3)(A)
specifically does not so authorize.’’;
(C) in the matter preceding paragraph
(2)—
(i) by striking ‘‘(b)’’ and inserting
‘‘(b)(1)’’;
(ii) by striking ‘‘paragraph (2)’’ both
places it appears and inserting ‘‘paragraph
(3)’’;
(iii) by striking ‘‘paragraph (1)’’ each
place it appears and inserting ‘‘paragraph
(2)’’; and
(iv) by striking ‘‘Such property is—’’;
and
(D) by adding at the end of the subsection
the following:
‘‘(4) For purposes of paragraph (3)(D) and sub-
section (d)(12), the following shall apply:
‘‘(A) If the retirement funds are in a retirement
fund that has received a favorable determination
pursuant to section 7805 of the Internal Revenue
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Code of 1986, and that determination is in effect as
of the date of the commencement of the case under
section 301, 302, or 303 of this title, those funds
shall be presumed to be exempt from the estate.
‘‘(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
pursuant to such section 7805, those funds are ex-
empt from the estate if the debtor demonstrates
that—
‘‘(i) no prior determination to the contrary
has been made by a court or the Internal Rev-
enue Service; and
‘‘(ii) the retirement fund is in substantial
compliance with the applicable requirements of
the Internal Revenue Code of 1986.
‘‘(C) A direct transfer of retirement funds from
one fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986, pur-
suant to section 401(a)(31) of the Internal Revenue
Code of 1986, or otherwise, shall not cease to qualify
for exemption under paragraph (3)(D) or subsection
(d)(12) by reason of that direct transfer.
‘‘(D)(i) Any distribution that qualifies as an eli-
gible rollover distribution within the meaning of sec-
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tion 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
qualify for exemption under paragraph (3)(D) or
subsection (d)(12) by reason of that distribution.
‘‘(ii) A distribution described in this clause is
an amount that—
‘‘(I) has been distributed from a fund or
account that is exempt from taxation under sec-
tion 401, 403, 408, 408A, 414, 457, or 501(a)
of the Internal Revenue Code of 1986; and
‘‘(II) to the extent allowed by law, is de-
posited in such a fund or account not later than
60 days after the distribution of that amount.’’;
and
(2) in subsection (d)—
(A) in the matter preceding paragraph (1),
by striking ‘‘subsection (b)(1)’’ and inserting
‘‘subsection (b)(2)’’; and
(B) by adding at the end the following:
‘‘(12) Retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’.
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(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, as amended by sections 118, 132,
136, and 141 is amended—
(1) in paragraph (27), by striking ‘‘or’’ at the
end;
(2) in paragraph (28), by striking the period
and inserting ‘‘; or’’;
(3) by inserting after paragraph (28) the fol-
lowing:
‘‘(29) under subsection (a), of withholding of
income from a debtor’s wages and collection of
amounts withheld, pursuant to the debtor’s agree-
ment authorizing that withholding and collection for
the benefit of a pension, profit-sharing, stock bonus,
or other plan established under section 401, 403,
408, 408A, 414, 457, or 501(a) of the Internal Rev-
enue Code of 1986 that is sponsored by the em-
ployer of the debtor, or an affiliate, successor, or
predecessor of such employer—
‘‘(A) to the extent that the amounts with-
held and collected are used solely for payments
relating to a loan from a plan that satisfies the
requirements of section 408(b)(1) of the Em-
ployee Retirement Income Security Act of 1974
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or is subject to section 72(p) of the Internal
Revenue Code of 1986; or
‘‘(B) in the case of a loan from a thrift
savings plan described in subchapter III of title
5, that satisfies the requirements of section
8433(g) of such title.’’; and
(4) by adding at the end of the flush material
following paragraph (29) the following: ‘‘Paragraph
(29) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under
a loan made during the 1-year period preceding the
filing of a petition. Nothing in paragraph (29) may
be construed to provide that any loan made under
a governmental plan under section 414(d), or a con-
tract or account under section 403(b), of the Inter-
nal Revenue Code of 1986 constitutes a claim or a
debt under this title.’’.
(c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of
title 11, United States Code, is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(17);
(2) by striking the period at the end of para-
graph (18) and inserting ‘‘; or’’; and
(3) by adding at the end the following:
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‘‘(19) owed to a pension, profit-sharing, stock
bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(c) of the Internal
Revenue Code of 1986, pursuant to—
‘‘(A) a loan permitted under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974) or subject to section
72(p) of the Internal Revenue Code of 1986; or
‘‘(B) a loan from the thrift savings plan
described in subchapter III of title 5, that satis-
fies the requirements of section 8433(g) of such
title.
Paragraph (19) does not apply to any amount owed to
a plan referred to in that paragraph that is incurred under
a loan made during the 1-year period preceding the filing
of a petition. Nothing in paragraph (19) may be construed
to provide that any loan made under a governmental plan
under section 414(d), or a contract or account under sec-
tion 403(b), of the Internal Revenue Code of 1986 con-
stitutes a claim or a debt under this title.’’.
(d) PLAN CONTENTS.—Section 1322 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(f) A plan may not materially alter the terms of a
loan described in section 362(b)(29) of this title.’’.
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SEC. 204. PROTECTION OF REFINANCE OF SECURITY IN-
TEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2)
of title 11, United States Code, are amended by striking
‘‘10’’ each place it appears and inserting ‘‘30’’.
SEC. 
205. 
EXECUTORY 
CONTRACTS 
AND 
UNEXPIRED
LEASES.
Section 365(d)(4) of title 11, United States Code, is
amended to read as follows:
‘‘(4)(A) Subject to subparagraph (B), in any case
under any chapter in this title, an unexpired lease of non-
residential real property under which the debtor is the les-
see shall be deemed rejected, and the trustee shall imme-
diately surrender such property to the lessor, if the trustee
does not assume or reject the unexpired lease by the ear-
lier of—
‘‘(i) the date that is 120 days after the date of
the order for relief; or
‘‘(ii) the date of the entry of an order con-
firming a plan.
‘‘(B)(i) The court may extend the period determined
under subparagraph (A) for 120 days upon motion of the
trustee or the lessor for cause.
‘‘(ii) If the court grants an extension under clause
(i), the court may grant a subsequent extension only upon
prior written consent of the lessor.’’.
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SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS
COMMITTEES.
(a) APPOINTMENT.—Section 1102(a)(2) of title 11,
United States Code, is amended by inserting before the
first sentence the following: ‘‘On its own motion or on re-
quest of a party in interest, and after notice and hearing,
the court may order a change in the membership of a com-
mittee appointed under this subsection, if the court deter-
mines that the change is necessary to ensure adequate rep-
resentation of creditors or equity security holders. The
court may expand the membership of a committee to in-
clude a creditor that is small business if the court deter-
mines that such creditor holds claims of the kind rep-
resented by such committee that are, in the aggregate, dis-
proportionately large when compared to the annual gross
revenue of such creditor.’’.
(b) INFORMATION.—Section 1102(b) of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(3) A committee appointed under subsection (a)
shall provide access to information for creditors who hold
claims of the kind represented by such committee and who
are not appointed such committee, shall to be open for
comment from such creditors, and shall be subject to a
court order compelling additional reports or disclosure to
be made to such creditors.’’.
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SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11,
UNITED STATES CODE.
Section 546 of title 11, United States Code, is
amended by inserting at the end thereof:
‘‘(i) Notwithstanding section 545 (2) and (3) of this
title, the trustee may not avoid a warehouseman’s lien for
storage, transportation or other costs incidental to the
storage and handling of goods, as provided by section 7–
209 of the Uniform Commercial Code.’’.
SEC. 208. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code,
is amended by striking ‘‘20’’ and inserting ‘‘45’’.
SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11,
UNITED STATES CODE.
Section 330(a) of title 11, United States Code, is
amended—
(1) in paragraph (3)—
(A) in subparagraph (A) after ‘‘awarded’’,
by inserting ‘‘to an examiner, chapter 11 trust-
ee, or professional person’’; and
(B) by redesignating subdivisions (A)
through (E) as clauses (i) through (iv), respec-
tively; and
(2) by adding at the the following:
‘‘(B) In determining the amount of reasonable
compensation to be awarded a trustee, the court
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shall treat such compensation as a commission based
on the results achieved.’’.
SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.
Section 1125 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(g) Notwithstanding subsection (b), an acceptance
or rejection of the plan may be solicited from a holder
of a claim or interest if such solicitation complies with ap-
plicable nonbankruptcy law and if such holder was solic-
ited before the commencement of the case in a manner
complying with applicable nonbankruptcy law.’’.
SEC. 211. PREFERENCES.
Section 547(c) of title 11, United States Code, is
amended—
(1) by amending paragraph (2) to read as fol-
lows:
‘‘(2) to the extent that such transfer was in
payment of a debt incurred by the debtor in the or-
dinary course of business or financial affairs of the
debtor and the transferee, and such transfer was—
‘‘(A) made in the ordinary course of busi-
ness or financial affairs of the debtor and the
transferee; or
‘‘(B) made according to ordinary business
terms;’’;
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(2) in paragraph (7) by striking ‘‘or’’ at the
end;
(3) in paragraph (8) by striking the period at
the end and inserting ‘‘; or’’; and
(4) by adding at the end the following:
‘‘(9) if, in a case filed by a debtor whose debts
are not primarily consumer debts, the aggregate
value of all property that constitutes or is affected
by such transfer is less than $5,000.’’.
SEC. 212. VENUE OF CERTAIN PROCEEDINGS.
Section 1409(b) of title 28, United States Code, is
amended by inserting ‘‘, or a nonconsumer debt against
a noninsider of less than $10,000,’’ after ‘‘$5,000’’.
SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.
Section 1121(d) of title 11, United States Code, is
amended—
(1) by striking ‘‘On’’ and inserting ‘‘(1) Subject
to paragraph (1), on’’; and
(2) by adding at the end the following:
‘‘(2)(A) Such 120-day period may not be extended
beyond a date that is 18 months after the date of the order
for relief under this chapter.
‘‘(B) Such 180-day period may not be extended be-
yond a date that is 20 months after the date of the order
for relief under this chapter.’’.
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SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP IN-
TERESTS.
Section 523(a)(16) of title 11, United States Code,
is amended—
(1) by striking ‘‘dwelling’’ the first place it ap-
pears;
(2) by striking ‘‘ownership or’’ and inserting
‘‘ownership,’’;
(3) by striking ‘‘housing’’ the first place it ap-
pears; and
(4) by striking ‘‘but only’’ and all that follows
through ‘‘such period,’’, and inserting ‘‘or a lot in a
homeowners association, for as long as the debtor or
the trustee has a legal, equitable, or possessory own-
ership interest in such unit, such corporation, or
such lot,’’.
SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGA-
TIONS.
(a) EXECUTORY
CONTRACTS
AND
UNEXPIRED
LEASES.—Section 365 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (1)(A) by striking the
semicolon at the end and inserting the fol-
lowing:
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‘‘other than a default that is a breach of a provision
relating to—
‘‘(i) the satisfaction of any provision (other
than a penalty rate or penalty provision) relat-
ing to a default arising from any failure to per-
form nonmonetary obligations under an unex-
pired lease of real property, if it is impossible
for the trustee to cure such default by per-
forming nonmonetary acts at and after the time
of assumption; or
‘‘(ii) the satisfaction of any provision
(other than a penalty rate or penalty provision)
relating to a default arising from any failure to
perform nonmonetary obligations under an ex-
ecutory contract (excluding executory contracts
that transfer a right or interest under a filed or
issued patent, copyright, trademark, trade
dress, or trade secret), if it is impossible for the
trustee to cure such default by performing non-
monetary acts at and after the time of assump-
tion and if the court determines, based on the
equities of the case, that this subparagraph
should not apply with respect to such default;’’;
and
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(B) by amending paragraph (2)(D) to read
as follows:
‘‘(D) the satisfaction of any penalty rate or
penalty provision relating to a default arising from
a failure to perform nonmonetary obligations under
an executory contract (excluding executory contracts
that transfer a right or interest under a filed or
issued patent, copyright, trademark, trade dress, or
trade secret) or under an unexpired lease of real or
personal property.’’;
(2) in subsection (c)—
(A) in paragraph (2) by adding ‘‘or’’ at the
end;
(B) in paragraph (3) by striking ‘‘; or’’ at
the end and inserting a period; and
(C) by striking paragraph (4);
(3) in subsection (d)—
(A) by striking paragraphs (5) through
(9); and
(B) by redesignating paragraph (10) as
paragraph (5); and
(4) in subsection (f)(1) by striking ‘‘; except
that’’ and all that follows through the end of the
paragraph and inserting a period.
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(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec-
tion 1124(2) of title 11, United States Code, is
amended—
(1) in subparagraph (A) by inserting ‘‘or of a
kind that section 365(b)(2) of this title expressly
does not require to be cured’’ before the semicolon
at the end;
(2) in subparagraph (C) by striking ‘‘and’’ at
the end;
(3) by redesignating subparagraph (D) as sub-
paragraph (E); and
(4) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) if such claim or such interest arises
from any failure to perform a nonmonetary ob-
ligation, compensates the holder of such claim
or such interest (other than the debtor or an in-
sider) for any actual pecuniary loss incurred by
such holder as a result of such failure; and’’.
SEC. 216. SHARING OF COMPENSATION.
Section 504 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(c) This section shall not apply with respect to shar-
ing, or agreeing to share, compensation with a bona fide
public service attorney referral program that operates in
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accordance with non-Federal law regulating attorney re-
ferral services and with rules of professional responsibility
applicable to attorney acceptance of referrals.’’.
SEC. 217. PRIORITY FOR ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, is
amended—
(1) by deleting ‘‘and’’ at the end of paragraph
(5);
(2) by striking the period at the end of para-
graph (6) and inserting ‘‘; and’’; and
(3) by inserting the following after paragraph
(6):
‘‘(7) with respect to a nonresidential real prop-
erty lease previously assumed under section 365,
and subsequently rejected, a sum equal to all mone-
tary obligations due, excluding those arising from or
relating to a failure to operate or penalty provisions,
for the period of one year following the later of the
rejection date or date of actual turnover of the
premises, without reduction or setoff for any reason
whatsoever except for sums actually received or to be
received from a nondebtor; and the claim for remain-
ing sums due for the balance of the term of the lease
shall be a claim under section 502(b)(6).’’.
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SEC. 
218. 
NONDISCHARGEABILITY 
OF 
CERTAIN 
EDU-
CATIONAL BENEFITS AND LOANS.
Section 523(a)(8) of title 11, United States Code, is
amended to read as follows:
‘‘(8) for—
‘‘(A) an educational benefit overpayment
or loan made, insured or guaranteed by a gov-
ernmental unit, or made under any program
funded in whole or in part by a governmental
unit or nonprofit institution, or for an obliga-
tion to repay funds received as an educational
benefit, scholarship or stipend; or
‘‘(B) any other education loan incurred by
an individual debtor that meets the definition of
‘Qualified 
Education 
Loan’ 
under 
section
221(e)(1) of the Internal Revenue Code,
unless excepting such debt from discharge under this
paragraph will impose an undue hardship on the
debtor and a debtor’s dependents;’’.
TITLE III—GENERAL BUSINESS
BANKRUPTCY PROVISIONS
SEC. 301. DEFINITION OF DISINTERESTED PERSON.
Section 101(14) of title 11, United States Code, is
amended to read as follows:
‘‘(14) ‘disinterested person’ means a person
that—
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‘‘(A) is not a creditor, an equity security
holder, or an insider;
‘‘(B) is not and was not, within 2 years be-
fore the date of the filing of the petition, a di-
rector, officer, or employee of the debtor; and
‘‘(C) does not have an interest materially
adverse to the interest of the estate or of any
class of creditors or equity security holders, by
reason of any direct or indirect relationship to,
connection with, or interest in, the debtor, or
for any other reason;’’.
SEC. 302. MISCELLANEOUS IMPROVEMENTS.
(a) WHO MAY BE A DEBTOR.—Section 109 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(h)(1) Subject to paragraphs (2) and (3) and not-
withstanding any other provision of this section, an indi-
vidual may not be a debtor under this title unless that
individual has, during the 90-day period preceding the
date of filing of the petition of that individual, received
credit counseling, including, at a minimum, participation
in an individual or group briefing that outlined the oppor-
tunities for available credit counseling and assisted that
individual in performing an initial budget analysis,
through a credit counseling program (offered through an
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approved credit counseling service described in section
111(a)).
‘‘(2)(A) Paragraph (1) shall not apply with respect
to a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
credit counseling services for that district are not reason-
ably able to provide adequate services to the additional
individuals who would otherwise seek credit counseling
from those programs by reason of the requirements of
paragraph (1).
‘‘(B) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
paragraph (A) shall review that determination not later
than one year after the date of that determination, and
not less frequently than every year thereafter.
‘‘(3)(A) Subject to subparagraph (B), the require-
ments of paragraph (1) shall not apply with respect to
a debtor who submits to the court a certification that—
‘‘(i) describes exigent circumstances that merit
a waiver of the requirements of paragraph (1);
‘‘(ii) states that the debtor requested credit
counseling services from an approved credit coun-
seling service, but was unable to obtain the services
referred to in paragraph (1) during the 5-day period
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beginning on the date on which the debtor made
that request or that the exigent circumstances re-
quire filing before such 5-day period expires; and
‘‘(iii) is satisfactory to the court.
‘‘(B) With respect to a debtor, an exemption under
subparagraph (A) shall cease to apply to that debtor on
the date on which the debtor meets the requirements of
paragraph (1), but in no case may the exemption apply
to that debtor after the date that is 30 days after the debt-
or files a petition.’’.
(b) CHAPTER 7 DISCHARGE.—Section 727(a) of title
11, United States Code, is amended—
(1) in paragraph (9), by striking ‘‘or’’ at the
end;
(2) in paragraph (10), by striking the period
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(11) after the filing of the petition, the debtor
failed to complete an instructional course concerning
personal financial management described in section
111 unless the debtor resides in a district for which
the United States trustee or bankruptcy adminis-
trator of the bankruptcy court of that district deter-
mines that the approved instructional courses are
not adequate to provide service to the additional in-
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dividuals who would be required to compete the in-
structional course by reason of the requirements of
this section. Each United States trustee or bank-
ruptcy administrator that makes such a determina-
tion shall review that determination not later than 1
year after the date of that determination, and not
less frequently than every year thereafter.’’.
(c) CHAPTER 13 DISCHARGE.—Section 1328 of title
11, United States Code, as amended by section 137, is
amended by adding at the end the following:
‘‘(g) The court shall not grant a discharge under this
section to a debtor, unless after filing a petition the debtor
has completed an instructional course concerning personal
financial management described in section 111.
‘‘(h) Subsection (g) shall not apply with respect to
a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
instructional courses are not adequate to provide service
to the additional individuals who would be required to
complete the instructional course by reason of the require-
ments of this section.
‘‘(i) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
section (h) shall review that determination not later than
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1 year after the date of that determination, and not less
frequently than every year thereafter.’’.
(d) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 604 and 120,
is amended by adding at the end the following:
‘‘(d) In addition to the requirements under subsection
(a), an individual debtor shall file with the court—
‘‘(1) a certificate from the credit counseling
service that provided the debtor services under sec-
tion 109(h); and
‘‘(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the credit
counseling service referred to in paragraph (1).’’.
(e) GENERAL PROVISIONS.—
(1) IN GENERAL.—Chapter 1 of title 11, United
States Code, is amended by adding at the end the
following:
‘‘§ 111. Credit counseling services; financial manage-
ment instructional courses
‘‘(a) The clerk of each district shall maintain a pub-
licly available list of credit counseling agencies and of pro-
grams described in section 109(h) and instructional
courses offered by such agencies currently approved by—
‘‘(1) the United States Trustee; or
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‘‘(2) the bankruptcy administrator for the dis-
trict.
‘‘(b) The United States Trustee or bankruptcy ad-
ministrator shall only approve credit counseling agencies
which satisfy standards set in regulations promulgated by
the Federal Trade Commission and which are accredited
by the Council on Accreditation or an equivalent third
party nonprofit accrediting organization.
‘‘(c) The United States Trustee or bankruptcy ad-
ministrator shall only approve programs or courses under
subsection (a) if they satisfy standards set in regulations
promulgated by the Executive Office of the United States
Trustees. The Executive Office of the United States
Trustee is authorized to promulgate regulations setting
such standards.
‘‘(d) The Federal Trade Commission shall have au-
thority to promulgate regulations setting standards for
credit counseling agencies for the purposes of subsection
(b). Such standards shall establish minimum requirements
for such agencies with respect to providing qualified coun-
selors, safekeeping and payment of client funds, disclosure
to clients, adequate counseling with respect to client credit
problems, and such other matters as relate to the quality
and financial security of such programs. Nothing in this
provision shall limit the authority of the Federal Trade
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Commission pursuant to the Federal Trade Commission
Act (15 U.S.C. 45 et seq.).
‘‘(e) The United States Trustee or bankruptcy ad-
ministrator may notify the clerk that a credit counseling
agency, or a program or course, is no longer approved,
in which case the clerk shall remove it from the list main-
tained under subsection (a).’’.
(2) REGULATIONS.—The Federal Trade Com-
mission and the Executive Office of United States
Trustees shall promulgate regulations pursuant to
the power delegated in this section within 180 days
of the date of the enactment of this Act.
(3) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 1 of title 11,
United States Code, is amended by adding at the
end the following:
‘‘111. Credit counseling services; financial management instructional courses.’’.
(e) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (13) the fol-
lowing:
‘‘(13A) ‘debtor’s principal residence’ means a
residential structure including incidental property
when the structure contains 1 to 4 units, whether or
not that structure is attached to real property, and
includes, without limitation, an individual condo-
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minium or cooperative unit or mobile or manufac-
tured home or trailer;’’;
(2) by inserting after paragraph (27A), as
added by section 318 of this Act, the following:
‘‘(27B) ‘incidental property’ means property in-
cidental to such residence including, without limita-
tion, property commonly conveyed with a principal
residence where the real estate is located, window
treatments, carpets, appliances and equipment lo-
cated in the residence, and easements, appur-
tenances, fixtures, rents, royalties, mineral rights, oil
and gas rights, escrow funds and insurance pro-
ceeds;’’;
(3) in section 362(b), as amended by sections
117, 118, 132, 136, 141, 203, 818, and 1007—
(A) in paragraph (28) by striking ‘‘or’’ at
the end thereof;
(B) in paragraph (29) by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(C) by inserting after paragraph (29) the
following:
‘‘(30) under subsection (a), until a prepetition
default is cured fully in a case under chapter 13 of
this title by actual payment of all arrears as re-
quired by the plan, of the postponement, continu-
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ation or other similar delay of a prepetition fore-
closure proceeding or sale in accordance with appli-
cable nonbankruptcy law, but nothing herein shall
imply that such postponement, continuation or other
similar delay is a violation of the stay under sub-
section (a).’’; and
(4) by amending section 1322(b)(2) to read as
follows:
‘‘(2) modify the rights of holders of secured
claims, other than a claim secured primarily by a se-
curity interest in property used as the debtor’s prin-
cipal residence at any time during 180 days prior to
the filing of the petition, or of holders of unsecured
claims, or leave unaffected the rights of holders of
any class of claims;’’.
(f) LIMITATION.—Section 362 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘(j) If one case commenced under chapter 7, 11, or
13 of this title is dismissed due to the creation of a debt
repayment plan administered by a credit counseling agen-
cy approved pursuant to section 111 of this title, then for
purposes of section 362(c)(3) of this title the subsequent
case commenced under any such chapter shall not be pre-
sumed to be filed not in good faith.’’.
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(g) RETURN OF GOODS SHIPPED.—Section 546(g) of
title 11, United States Code, as added by section 222(a)
of Public Law 103–394, is amended to read as follows:
‘‘(h) Notwithstanding the rights and powers of a
trustee under sections 544(a), 545, 547, 549, and 553 of
this title, if the court determines on a motion by the trust-
ee made not later than 120 days after the date of the order
for relief in a case under chapter 11 of this title and after
notice and hearing, that a return is in the best interests
of the estate, the debtor, with the consent of the creditor,
and subject to the prior rights, if any, of third parties in
such goods, may return goods shipped to the debtor by
the creditor before the commencement of the case, and the
creditor may offset the purchase price of such goods
against any claim of the creditor against the debtor that
arose before the commencement of the case.’’.
SEC. 303. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United
States Trustees, and Family Farmer Bankruptcy Act of
1986 (28 U.S.C. 581 note) is amended—
(1) in subparagraph (A), in the matter fol-
lowing clause (ii), by striking ‘‘or October 1, 2002,
whichever occurs first’’; and
(2) in subparagraph (F)—
(A) in clause (i)—
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(i) in subclause (II), by striking ‘‘or
October 1, 2002, whichever occurs first’’;
and
(ii) in the matter following subclause
(II), by striking ‘‘October 1, 2003, or’’;
and
(B) in clause (ii), in the matter following
subclause (II)—
(i) by striking ‘‘before October 1,
2003, or’’; and
(ii) by striking ‘‘, whichever occurs
first’’.
SEC. 304. LOCAL FILING OF BANKRUPTCY CASES.
Section 1408 of title 28, United States Code, is
amended—
(1) by striking ‘‘Except’’ and inserting ‘‘(a) Ex-
cept’’; and
(2) by adding at the end the following:
‘‘(b) For the purposes of subsection (a), if the debtor
is a corporation, the domicile and residence of the debtor
are conclusively presumed to be where the debtor’s prin-
cipal place of business in the United States is located.’’.
SEC. 305. PERMITTING ASSUMPTION OF CONTRACTS.
(a) Section 365(c) of title 11, United States Code,
is amended to read as follows:
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‘‘(c)(1) The trustee may not assume or assign an ex-
ecutory contract or unexpired lease of the debtor, whether
or not the contract or lease prohibits or restricts assign-
ment of rights or delegation of duties, if—
‘‘(A)(i) applicable law excuses a party to the
contract or lease from accepting performance from
or rendering performance to an assignee of the con-
tract or lease, whether or not the contract or lease
prohibits or restricts assignment of rights or delega-
tion of duties; and
‘‘(ii) the party does not consent to the assump-
tion or assignment; or
‘‘(B) the contract is a contract to make a loan,
or extend other debt financing or financial accom-
modations, to or for the benefit of the debtor, or to
issue a security of the debtor.
‘‘(2) Notwithstanding paragraph (1)(A) and applica-
ble nonbankruptcy law, in a case under chapter 11 of this
title, a trustee in a case in which a debtor is a corporation,
or a debtor in possession, may assume an executory con-
tract or unexpired lease of the debtor, whether or not the
contract or lease prohibits or restricts assignment of rights
or delegation of duties.
‘‘(3) The trustee may not assume or assign an unex-
pired lease of the debtor of nonresidential real property,
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whether or not the contract or lease prohibits or restricts
assignment of rights or delegation of duties, if the lease
has been terminated under applicable nonbankruptcy law
before the order for relief.’’.
(b) Section 365(d) of title 11, United States Code,
is amended by striking paragraphs (5), (6), (7), (8), and
(9), and redesignating paragraph (10) as paragraph (5).
(c) Section 365(e) of title 11, United States Code,
is amended to read as follows:
‘‘(e)(1) Notwithstanding a provision in an executory
contract or unexpired lease, or in applicable law, an execu-
tory contract or unexpired lease of the debtor may not be
terminated or modified, and any right or obligation under
such contract or lease may not be terminated or modified,
at any time after the commencement of the case solely
because of a provision in such contract or lease that is
conditioned on—
‘‘(A) the insolvency or financial condition of the
debtor at any time before the closing of the case;
‘‘(B) the commencement of a case under this
title; or
‘‘(C) the appointment of or taking possession by
a trustee in a case under this title or a custodian be-
fore such commencement.
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‘‘(2) Paragraph (1) does not apply to an executory
contract or unexpired lease of the debtor if the trustee
may not assume or assign, and the debtor in possession
may not assume, the contract or lease by reason of the
provisions of subsection (c) of this section.’’.
(d) Section 365(f)(1) of title 11, United States Code,
is amended by striking the semicolon and all that follows
through ‘‘event’’.
TITLE IV SMALL BUSINESS
BANKRUPTCY PROVISIONS
SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT
AND PLAN.
(a) Section 1125(a)(1) of title 11, United States
Code, is amended by inserting before the semicolon fol-
lowing:
‘‘and in determining whether a disclosure statement pro-
vides adequate information, the court shall consider the
complexity of the case, the benefit of additional informa-
tion to creditors and other parties in interest, and the cost
of providing additional information’’.
(b) Section 1125(f) of title 11, United States Code,
is amended to read as follows:
‘‘(f) Notwithstanding subsection (b)—
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‘‘(1) the court may determine that the plan
itself provides adequate information and that a sepa-
rate disclosure statement is not necessary;
‘‘(2) the court may approve a disclosure state-
ment submitted on standard forms approved by the
court or adopted pursuant to section 2075 of title
28, United States Code; and
‘‘(3)(A) the court may conditionally approve a
disclosure statement subject to final approval after
notice and a hearing;
‘‘(B) acceptances and rejections of a plan may
be solicited based on a conditionally approved disclo-
sure statement if the debtor provides adequate infor-
mation to each holder of a claim or interest that is
solicited, but a conditionally approved disclosure
statement shall be mailed not less than 20 days be-
fore the date of the hearing on confirmation of the
plan; and
‘‘(C) the hearing on the disclosure statement may be
combined with the hearing on confirmation of a plan.’’.
SEC. 402. DEFINITIONS.
(a) DEFINITIONS. Section 101 of title 11, United
States Code, is amended by striking paragraph (51C) and
inserting the following:
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‘‘(51C) ‘small business case’ means a case filed
under chapter 11 of this title in which the debtor is
a small business debtor; and
‘‘(51D) ‘small business debtor’ means (A) a
person (including affiliates of such person that are
also debtors under this title) that has aggregate non-
contingent, liquidated secured and unsecured debts
as of the date of the petition or the order for relief
in an amount not more than $4,000,000 (excluding
debts owed to one or more affiliates or insiders), ex-
cept that if a group of affiliated debtors has aggre-
gate noncontingent liquidated secured and unsecured
debts greater than $4,000,000 (excluding debt owed
to one or more affiliates or insiders), then no mem-
ber of such group is a small business debtor;’’.
(b) CONFORMING AMENDMENT.—Section 1102(a)(3)
of title 11, United States Code, is amended by inserting
‘‘debtor’’ after ‘‘small business’’ .
SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND
PLAN.
The Advisory Committee on Bankruptcy Rules of the
Judicial Conference of the United States shall, within a
reasonable period of time after the date of the enactment
of this Act, propose for adoption standard form disclosure
statements and plans of reorganization for small business
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debtors (as defined in section 101 of title 11, United
States Code, as amended by this Act), designed to achieve
a practical balance between—
(1) the reasonable needs of the courts, the
United States trustee, creditors, and other parties in
interest for reasonably complete information; and
(2) economy and simplicity for debtors.
SEC. 404. UNIFORM NATIONAL REPORTING REQUIRE-
MENTS.
(a) REPORTING REQUIRED.—
(1) Title 11, United States Code, is amended by
inserting after section 307 the following:
‘‘§ 308. Debtor reporting requirements
‘‘A small business debtor shall file periodic financial
and other reports containing information including—
‘‘(1) the debtor’s profitability, that is, approxi-
mately how much money the debtor has been earn-
ing or losing during current and recent fiscal peri-
ods;
‘‘(2) reasonable approximations of the debtor’s
projected cash receipts and cash disbursements over
a reasonable period;
‘‘(3) comparisons of actual cash receipts and
disbursements with projections in prior reports; and
‘‘(4) whether the debtor is—
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‘‘(A) in compliance in all material respects
with postpetition requirements imposed by this
title and the Federal Rules of Bankruptcy Pro-
cedure; and
‘‘(B) timely filing tax returns and paying
taxes and other administrative claims when due,
and, if not, what the failures are and how, at
what cost, and when the debtor intends to rem-
edy such failures; and
‘‘(5) such other matters as are in the best inter-
ests of the debtor and creditors, and in the public
interest in fair and efficient procedures under chap-
ter 11 of this title.’’.
(2) The table of sections of chapter 3 of title
11, United States Code, is amended by inserting
after the item relating to section 307 the following:
‘‘308. Debtor reporting requirements.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect 60 days after the date on
which rules are prescribed pursuant to section 2075, title
28, United States Code to establish forms to be used to
comply with section 308 of title 11, United States Code,
as added by subsection (a).
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SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR
SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS.—The Advi-
sory Committee on Bankruptcy Rules of the Judicial Con-
ference of the United States shall propose for adoption
amended Federal Rules of Bankruptcy Procedure and Of-
ficial Bankruptcy Forms to be used by small business
debtors to file periodic financial and other reports con-
taining information, including information relating to—
(1) the debtor’s profitability;
(2) the debtor’s cash receipts and disburse-
ments; and
(3) whether the debtor is timely filing tax re-
turns and paying taxes and other administrative
claims when due.
(b) PURPOSE.—The rules and forms proposed under
subsection (a) shall be designed to achieve a practical bal-
ance between—
(1) the reasonable needs of the bankruptcy
court, the United States trustee, creditors, and other
parties in interest for reasonably complete informa-
tion;
(2) the small business debtor’s interest that re-
quired reports be easy and inexpensive to complete;
and
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(3) the interest of all parties that the required
reports help the small business debtor to understand
its financial condition and plan its future.
SEC. 406. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES
IN CHAPTER 11 CASES.—Title 11,
United States Code, is amended by inserting after section
1114 the following:
‘‘§ 1115. Duties of trustee or debtor in possession in
small business cases
‘‘(a) In a small business case, a trustee or the debtor
in possession, in addition to the duties provided in this
title and as otherwise required by law, shall—
‘‘(1) append to the voluntary petition or, in an
involuntary case, file within 3 days after the date of
the order for relief—
‘‘(A) its most recent balance sheet, state-
ment of operations, cash-flow statement, Fed-
eral income tax return; or
‘‘(B) a statement made under penalty of
perjury that no balance sheet, statement of op-
erations, or cash-flow statement has been pre-
pared and no Federal tax return has been filed;
‘‘(2) attend, through its responsible individual,
meetings scheduled by the court or the United
States trustee, including initial debtor interviews
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and meetings of creditors convened under section
341 of this title;
‘‘(3) timely file all schedules and statements of
financial affairs, unless the court, after notice and a
hearing, grants an extension, which shall not extend
such time period to a date later than 30 days after
the date of the order for relief, absent extraordinary
and compelling circumstances;
‘‘(4) file all postpetition financial and other re-
ports required by the Federal Rules of Bankruptcy
Procedure or by local rule of the district court;
‘‘(5) subject to section 363(c)(2) of this title,
maintain insurance customary and appropriate to
the industry;
‘‘(6)(A) timely file tax returns;
‘‘(B) subject to section 363(c)(2) of this title,
timely pay all administrative expense tax claims, ex-
cept those being contested by appropriate pro-
ceedings being diligently prosecuted; and
‘‘(C) subject to section 363(c)(2) of this title,
establish one or more separate deposit accounts not
later than 10 business days after the date of order
for relief (or as soon thereafter as possible if all
banks contacted decline the business) and deposit
therein, not later than 1 business day after receipt
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thereof or a responsible time set by the court, all
taxes payable for periods beginning after the date
the case is commenced that are collected or withheld
by the debtor for governmental units unless the
court waives this requirement after notice and hear-
ing; and
‘‘(7) allow the United States trustee, or its des-
ignated representative, to inspect the debtor’s busi-
ness premises, books, and records at reasonable
times, after reasonable prior written notice, unless
notice is waived by the debtor.’’.
(b) TECHNICAL AMENDMENT.—The table of sections
of chapter 11, United States Code, is amended by insert-
ing after the item relating to section 1114 the following:
‘‘1115. Duties of trustee or debtor in possession in small business cases.’’.
SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121(e) of title 11, United States Code, is
amended to read as follows:
‘‘(e) In a small business case—
‘‘(1) only the debtor may file a plan until after
90 days after the date of the order for relief, unless
a trustee has been appointed under this chapter, or
unless the court, on request of a party in interest
and after notice and hearing, shortens such time;
‘‘(2) the debtor shall file a plan, and any nec-
essary disclosure statement, not later than 90 days
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after the date of the order for relief, unless the
United States Trustee has appointed under section
1102(a)(1) of this title a committee of unsecured
creditors that the court has determined, before the
90 days has expired, is sufficiently active and rep-
resentative to provide effective oversight of the debt-
or; and
‘‘(3) the time periods specified in paragraphs
(1) and (2) of this subsection and the time fixed in
section 1129(e) of this title for confirmation of a
plan, may be extended only as follows:
‘‘(A) On request of a party in interest
made within the respective periods, and after
notice and hearing, the court may for cause
grant one or more extensions, cumulatively not
to exceed 60 days, if the movant establishes—
‘‘(i) that no cause exists to dismiss or
convert the case or appoint a trustee or ex-
aminer under subparagraphs (A) (I) of
section 1112(b) of this title; and
‘‘(ii) that there is a reasonable possi-
bility the court will confirm a plan within
a reasonable time;
‘‘(B) On request of a party in interest
made within the respective periods, and after
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notice and hearing, the court may for cause
grant one or more extensions in excess of those
authorized under subparagraph (A) of this
paragraph, if the movant establishes:
‘‘(i) that no cause exists to dismiss or
convert the case or appoint a trustee or ex-
aminer under subparagraphs (A) (I) of
section 1112(b)(3) of this title; and
‘‘(ii) that it is more likely than not
that the court will confirm a plan within a
reasonable time; and
‘‘(C) a new deadline shall be imposed
whenever an extension is granted.’’.
SEC. 408. PLAN CONFIRMATION DEADLINE.
Section 1129 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) In a small business case, the debtor shall confirm
a plan not later than 150 days after the date of the order
for relief unless—
‘‘(1) the United States Trustee has appointed,
under section 1102(a)(1) of this title, a committee
of unsecured creditors that the court has deter-
mined, before the 150 days has expired, is suffi-
ciently active and representative to provide effective
oversight of the debtor; or
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‘‘(2) such 150-day period is extended as pro-
vided in section 1121(e)(3) of this title.’’.
SEC. 409. PROHIBITION AGAINST EXTENSION OF TIME.
Section 105(d) of title 11, United States Code, is
amended—
(1) in paragraph (2)(B)(vi) by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(2) by adding at the end the following:
‘‘(3) in a small business case, not extend the
time periods specified in sections 1121(e) and
1129(e) of this title except as provided in section
1121(e)(3) of this title.’’.
SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.
Section 586(a) of title 28, United States Code, is
amended—
(1) in paragraph (3)—
(A) in subparagraph (G) by striking ‘‘and
at the end’’;
(B) by redesignating subparagraph (H) as
subparagraph (I); and
(C) by inserting after subparagraph (G)
the following:
‘‘(H) in small business cases (as defined in
section 101 of title 11), performing the addi-
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tional duties specified in title 11 pertaining to
such cases’’;
(2) in paragraph (5) by striking ‘‘and at the
end’’;
(3) in paragraph (6) by striking the period at
the end and inserting ‘‘; and’’; and
(4) by inserting after paragraph (7) the fol-
lowing:
‘‘(7) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as
soon as practicable after the entry of order for
relief but before the first meeting scheduled
under section 341(a) of title 11 at which time
the United States trustee shall begin to inves-
tigate the debtor’s viability, inquire about the
debtor’s business plan, explain the debtor’s obli-
gations to file monthly operating reports and
other required reports, attempt to develop an
agreed scheduling order, and inform the debtor
of other obligations;
‘‘(B) when determined to be appropriate
and advisable, visit the appropriate business
premises of the debtor and ascertain the state
of the debtor’s books and records and verify
that the debtor has filed its tax returns; and
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‘‘(C) review and monitor diligently the
debtor’s activities, to identify as promptly as
possible whether the debtor will be unable to
confirm a plan; and
‘‘(8) in cases in which the United States trustee
finds material grounds for any relief under section
1112 of title 11, the United States trustee shall
apply promptly to the court for relief.’’.
SEC. 411. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is
amended—
(1) in the matter preceding paragraph (1) by
striking ‘‘, may’’;
(2) by amending paragraph (1) to read as fol-
lows:
‘‘(1) shall hold such status conferences as are
necessary to further the expeditious and economical
resolution of the case; and’’; and
(3) in paragraph (2) by striking ‘‘unless incon-
sistent with another provision of this title or with
applicable Federal Rules of Bankruptcy Procedure’’,
and inserting ‘‘may’’.
SEC. 412. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, as
amended by section 302, is amended—
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(1) in subsection (i) as so redesignated by sec-
tion 122—
(A) by striking ‘‘An’’ and inserting ‘‘(1)
Except as provided in paragraph (2), an’’; and
(B) by adding at the end the following:
‘‘(2) If such violation is based on an action taken by
an entity in the good-faith belief that subsection (h) ap-
plies to the debtor, then recovery under paragraph (1)
against such entity shall be limited to actual damages.’’;
and
(2) by inserting after subsection (j), as added
by section 302, the following:
‘‘(k)(1) Except as provided in paragraph (2) of this
subsection, the provisions of subsection (a) of thissection
shall not apply in a case in which the debtor—
‘‘(A) is a debtor in a case under this title pend-
ing at the time the petition is filed;
‘‘(B) was a debtor in a case under this title
which was dismissed for any reason by an order that
became final in the 2-year period ending on the date
of the order for relief entered with respect to the pe-
tition;
‘‘(C) was a debtor in a case under this title in
which a chapter 11, 12, or 13 plan was confirmed
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in the 2-year period ending on the date of the order
for relief entered with respect to the petition; or
‘‘(D) is an entity that has succeeded to sub-
stantially all of the assets or business of a debtor de-
scribed in subparagraph (A), (B), or (C).
‘‘(2) This subsection shall not apply—
‘‘(A) to a case initiated by an involuntary peti-
tion filed by a creditor that is not an insider or affil-
iate of the debtor; or
‘‘(B) after such time as the debtor, after notice
and a hearing, demonstrates by a preponderance of
the evidence, that the filing of such petition resulted
from circumstances beyond the control of the debtor
and not foreseeable at the time the earlier case was
filed; and that it is more likely than not that the
court will confirm a plan, other than a liquidating
plan, within a reasonable time.’’.
SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE
OR EXAMINER.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION.—Section 1112(b) of title 11, United States
Code, is amended to read as follows:
‘‘(b)(1) Except as provided in paragraphs (2) and (4)
of this subsection, and in subsection (c) of this section,
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on request of a party in interest, and after notice and a
hearing, the court shall convert a case under this chapter
to a case under chapter 7 of this title or dismiss a case
under this chapter, or appoint a trustee or examiner under
section 1104(e) of this title, whichever is in the best inter-
est of creditors and the estate, if the movant establishes
cause.
‘‘(2) The court may decline to grant the relief speci-
fied in paragraph (1) of this subsection if the debtor or
another party in interest objects and establishes by a pre-
ponderance of the evidence that—
‘‘(A) it is more likely than not that a plan will
be confirmed within a time as fixed by this title or
by order of the court entered pursuant to section
1121(e)(3), or within a reasonable time if no time
has been fixed; and
‘‘(B) if the cause is an act or omission of the
debtor that—
‘‘(i) there exists a reasonable justification
for the act or omission; and
‘‘(ii) the act or omission will be cured with-
in a reasonable time fixed by the court not to
exceed 30 days after the court decides the mo-
tion, unless the movant expressly consents to a
continuance for a specific period of time, or
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compelling circumstances beyond the control of
the debtor justify an extension.
‘‘(3) For purposes of this subsection, cause
includes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate;
‘‘(B) gross mismanagement of the estate;
‘‘(C) failure to maintain insurance that poses a
material risk to the estate or the public;
‘‘(D) unauthorized use of cash collateral harm-
ful to one or more creditors;
‘‘(E) failure to comply with an order of the
court;
‘‘(F) failure timely to satisfy any filing or re-
porting requirement established by this title or by
any rule applicable to a case under this chapter;
‘‘(G) failure to attend the meeting of creditors
convened under section 341(a) of this title;
‘‘(H) failure timely to provide information or
attend meetings reasonably requested by the United
States trustee or bankruptcy administrator;
‘‘(I) failure timely to pay taxes due after the
date of the order for relief or to file tax returns due
after the order for relief;
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‘‘(J) failure to file a disclosure statement, or to
file or confirm a plan, within the time fixed by this
title or by order of the court;
‘‘(K) failure to pay any fees or charges required
under chapter 123 of title 28, United States Code;
‘‘(L) revocation of an order of confirmation
under section 1144 of this title;
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan;
‘‘(N) material default by the debtor with re-
spect to a confirmed plan; and
‘‘(O) termination of a plan by reason of the oc-
currence of a condition specified in the plan.
‘‘(4) The court may grant relief under this subsection
for cause as defined in subparagraphs C, F, G, H, or K
of paragraph 3 of this subsection only upon motion of the
United States trustee or bankruptcy administrator or
upon the courts own motion.
‘‘(5) The court shall commence the hearing on any
motion under this subsection not later than 30 days after
filing of the motion, and shall decide the motion within
15 days after commencement of the hearing, unless the
movant expressly consents to a continuance for a specific
period of time or compelling circumstances prevent the
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court from meeting the time limits established by this
paragraph.’’.
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF
TRUSTEE
OR EXAMINER.—Section 1104 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(e) If grounds exist to convert or dismiss the case
under section 1112 of this title, the court may instead ap-
point a trustee or examiner, if it determines that such ap-
pointment is in the best interests of creditors and the es-
tate.’’.
SEC. 414. STUDY OF OPERATION OF TITLE 11, UNITED
STATES CODE, WITH RESPECT TO SMALL
BUSINESSES.
Not later than 2 years after the date of the enact-
ment of this Act, the Administrator of the Small Business
Administration, in consultation with the Attorney General,
the Director of the Administrative Office of United States
Trustees, and the Director of the Administrative Office
of the United States Courts, shall—
(1) conduct a study to determine—
(A) the internal and external factors that
cause small businesses, especially sole propri-
etorships, to become debtors in cases under title
11, United States Code, and that cause certain
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small businesses to successfully complete cases
under chapter 11 of such title; and
(B) how Federal laws relating to bank-
ruptcy may be made more effective and efficient
in assisting small businesses to remain viable;
and
(2) submit to the President pro tempore of the
Senate and the Speaker of the House of Representa-
tives a report summarizing that study.
SEC. 415. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is
amended—
(1) by inserting ‘‘or 30 days after the court de-
termines that the debtor is subject to this para-
graph, whichever is later’’ after ‘‘90-day period)’’;
and
(2) by amending subparagraph (B) to read as
follows:
‘‘(B) the debtor has commenced monthly
payments (which payments may, in the debtor’s
sole 
discretion, 
notwithstanding 
section
363(c)(2) of this title, be made from rents or
other income generated before or after the com-
mencement of the case by or from the property)
to each creditor whose claim is secured by such
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real estate (other than a claim secured by a
judgment lien or by an unmatured statutory
lien), which payments are in an amount equal
to interest at the then-applicable nondefault
contract rate of interest on the value of the
creditor’s interest in the real estate; or’’.
TITLE V—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI-
TION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States
Code, is amended by inserting ‘‘notwithstanding section
301(b)’’ before the period at the end.
(b) CONFORMING AMENDMENT.—Section 301 of title
11, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;
and
(2) by amending the last sentence to read as
follows:
‘‘(b) The commencement of a voluntary case under
a chapter of this title constitutes an order for relief under
such chapter.’’.
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SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP-
TER 9.
Section 901(a) of title 11, United States Code, is
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and
(2) by inserting ‘‘559, 560, 561, 562’’ after
‘‘557,’’.
TITLE VI—STREAMLINING THE
BANKRUPTCY SYSTEM
SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING
OF CREDITORS.
Section 341(c) of title 11, United States Code, is
amended by inserting after the first sentence the fol-
lowing: ‘‘Notwithstanding any local court rule, provision
of a State constitution, any other Federal or State law
that is not a bankruptcy law, or other requirement that
representation at the meeting of creditors under sub-
section (a) be by an attorney, a creditor holding a con-
sumer debt or any representative of the creditor (which
may include an entity or an employee of an entity and
may be a representative for more than one creditor) shall
be permitted to appear at and participate in the meeting
of creditors and activities related thereto in a case under
chapter 7 or 13, either alone or in conjunction with an
attorney for the creditor. Nothing in this subsection shall
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be construed to require any creditor to be represented by
an attorney at any meeting of creditors.’’.
SEC. 602. AUDIT PROCEDURES.
(a) AMENDMENTS.—Section 586 of title 28, United
States Code, is amended—
(1) in subsection (a) by amending striking
paragraph (6) to read as follows:
‘‘(6) make such reports as the Attorney General
directs, including the results of audits performed
under subsection (f); and’’; and
(2) by adding at the end the following:
‘‘(f)(1)(A) The Attorney General shall establish pro-
cedures to determine the accuracy, veracity, and complete-
ness of petitions, schedules, and other information which
the debtor is required to provide under sections 521 and
1322 of title 11, and, if applicable, section 111 of title
11, in individual cases filed under chapter 7 or 13 of such
title. Such audits shall be in accordance with generally ac-
cepted auditing standards and performed by independent
certified public accountants or independent licensed public
accountants.
‘‘(B) Those procedures shall—
‘‘(i) establish a method of selecting appropriate
qualified persons to contract to perform those au-
dits;
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‘‘(ii) establish a method of randomly selecting
cases to be audited, except that not less than 1 out
of every 250 cases in each Federal judicial district
shall be selected for audit;
‘‘(iii) require audits for schedules of income and
expenses 
which 
reflect 
greater 
than 
average
variances from the statistical norm of the district in
which the schedules were filed; and
‘‘(iv) establish procedures for providing, not less
frequently than annually, public information con-
cerning the aggregate results of such audits includ-
ing the percentage of cases, by district, in which a
material misstatement of income or expenditures is
reported.
‘‘(2) The United States trustee for each district is
authorized to contract with auditors to perform audits in
cases designated by the United States trustee according
to the procedures established under paragraph (1).
‘‘(3)(A) The report of each audit conducted under
this subsection shall be filed with the court and trans-
mitted to the United States trustee. Each report shall
clearly 
and 
conspicuously 
specify 
any 
material
misstatement of income or expenditures or of assets iden-
tified by the person performing the audit. In any case
where a material misstatement of income or expenditures
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or of assets has been reported, the clerk of the bankruptcy
court shall give notice of the misstatement to the creditors
in the case.
‘‘(B) If a material misstatement of income or expend-
itures or of assets is reported, the United States trustee
shall—
‘‘(i) report the material misstatement, if appro-
priate, to the United States Attorney pursuant to
section 3057 of title 18, United States Code; and
‘‘(ii) if advisable, take appropriate action, in-
cluding but not limited to commencing an adversary
proceeding to revoke the debtor’s discharge pursuant
to section 727(d) of title 11, United States Code.’’.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11,
U.S.C.—Section 521(a) of title 11, United States Code,
as amended by section 603, is amended in paragraphs (3)
and (4) by adding ‘‘or an auditor appointed pursuant to
section 586 of title 28, United States Code’’ after ‘‘serving
in the case’’.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11,
U.S.C.—Section 727(d) of title 11, United States Code,
is amended—
(1) by deleting ‘‘or’’ at the end of paragraph
(2);
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(2) by substituting ‘‘; or’’ for the period at the
end of paragraph (3); and
(3) by adding the following at the end the fol-
lowing:
‘‘(4) 
the 
debtor 
has 
failed 
to 
explain
satisfactorily—
‘‘(A) a material misstatement in an audit
performed pursuant to section 586(f) of title
28, United States Code; or
‘‘(B) a failure to make available for inspec-
tion all necessary accounts, papers, documents,
financial records, files, and all other papers,
things, or property belonging to the debtor that
are requested for an audit conducted pursuant
to section 586(f) of title 28, United States
Code.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
the enactment of this Act.
SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7
AND 13 CASES.
(a) NOTICE.—Section 342 of title 11, United States
Code, is amended—
(1) in subsection (c)—