II
Calendar No. 457
105TH CONGRESS
2D SESSION
H. R. 3150
IN THE SENATE OF THE UNITED STATES
JUNE 11, 1998
Received
JULY 6, 1998
Read the first time
JULY 7, 1998
Read the second time 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 1998’’.
(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. Needs-based bankruptcy.
Sec. 102. Adequate income shall be committed to a chapter 13 plan that pays
unsecured creditors.
Sec. 103. Definition of inappropriate use.
Sec. 104. Debtor participation in credit counseling program.
Sec. 105. Who may be a debtor under chapter 11.
Subtitle B—Adequate Protections for Consumers
Sec. 111. Notice of alternatives.
Sec. 112. Debtor financial management training test program.
Sec. 113. Definitions.
Sec. 114. Disclosures.
Sec. 115. Debtor’s bill of rights.
Sec. 116. Enforcement.
Sec. 117. Sense of the Congress.
Sec. 118. Charitable contributions.
Sec. 119. Reinforce the fresh start.
Sec. 119A. Chapter 11 discharge of debts arising from tobacco-related debts.
Subtitle C—Adequate Protections for Secured Creditors
Sec. 121. Discouraging bad faith repeat filings.
Sec. 122. Definition of household goods.
Sec. 123. Debtor retention of personal property security.
Sec. 124. Relief from the automatic stay when the debtor does not complete in-
tended surrender of consumer debt collateral.
Sec. 125. Giving secured creditors fair treatment in chapter 13.
Sec. 126. Prompt relief from the automatic stay in individual cases.
Sec. 127. Stopping abusive conversions from chapter 13.
Sec. 128. Restraining abusive purchases on secured credit.
Sec. 129. Fair valuation of collateral.
Sec. 130. Protection of holders of claims secured by debtor’s principal resi-
dence.
Sec. 131. Aircraft equipment and vessels.
Subtitle D—Adequate Protections for Unsecured Creditors
Sec. 141. Debts incurred to pay nondischargeable debts.
Sec. 142. Credit extensions on the eve of bankruptcy presumed nondischarge-
able.
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Sec. 143. Fraudulent debts are nondischargeable in chapter 13 cases.
Sec. 144. Applying the codebtor stay only when it protects the debtor.
Sec. 145. Debts for alimony, maintenance, and support.
Sec. 146. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 147. Other exceptions to discharge.
Sec. 148. Fees arising from certain ownership interests.
Sec. 149. Protection of child support and alimony.
Sec. 150. Adequate protection for investors.
Sec. 151. Higher priority for debts for alimony, maintenance, and support.
Subtitle E—Adequate Protections for Lessors
Sec. 161. Giving debtors the ability to keep leased personal property by as-
sumption.
Sec. 162. Adequate protection of lessors and purchase money secured creditors.
Sec. 163. Adequate protection for lessors.
Subtitle F—Bankruptcy Relief Less Frequently Available for Repeat Filers
Sec. 171. Extend period between bankruptcy discharges.
Subtitle G—Exemptions
Sec. 181. Exemptions.
Sec. 182. Limitation.
TITLE II—BUSINESS BANKRUPTCY PROVISIONS
Subtitle A—General Provisions
Sec. 201. Limitation relating to the use of fee examiners.
Sec. 202. Sharing of compensation.
Sec. 203. Chapter 12 made permanent law.
Sec. 204. Meetings of creditors and equity security holders.
Sec. 205. Creditors’ and equity security holders’ committees.
Sec. 206. Postpetition disclosure and solicitation.
Sec. 207. Preferences.
Sec. 208. Venue of certain proceedings.
Sec. 209. Period for filing plan under chapter 11.
Sec. 210. Period for filing plan under chapter 12.
Sec. 211. Cases ancillary to foreign proceedings involving foreign insurance
companies that are engaged in the business of insurance or re-
insurance in the United States.
Sec. 212. Rejection of executory contracts affecting intellectual property rights
to recordings of artistic performance.
Sec. 213. Unexpired leases of nonresidential real property.
Sec. 214. Definition of disinterested person.
Sec. 215. Defaults based on nonmonetary obligations.
Subtitle B—Specific Provisions
CHAPTER 1—SMALL BUSINESS BANKRUPTCY
Sec. 231. Definitions.
Sec. 232. Flexible rules for disclosure statement and plan.
Sec. 233. Standard form disclosure statement and plan.
Sec. 234. Uniform national reporting requirements.
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Sec. 235. Uniform reporting rules and forms for small business cases.
Sec. 236. Duties in small business cases.
Sec. 237. Plan filing and confirmation deadlines.
Sec. 238. Plan confirmation deadline.
Sec. 239. Prohibition against extension of time.
Sec. 240. Duties of the United States trustee and bankruptcy administrator.
Sec. 241. Scheduling conferences.
Sec. 242. Serial filer provisions.
Sec. 243. Expanded grounds for dismissal or conversion and appointment of
trustee.
Sec. 244. Study of operation of title 11 of the United States Code with respect
to small businesses.
CHAPTER 2—SINGLE ASSET REAL ESTATE
Sec. 251. Single asset real estate defined.
Sec. 252. Payment of interest.
TITLE III—MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 301. Petition and proceedings related to petition.
Sec. 302. Applicability of other sections to chapter 9.
TITLE IV—BANKRUPTCY ADMINISTRATION
Subtitle A—General Provisions
Sec. 401. Adequate preparation time for creditors before the meeting of credi-
tors in individual cases.
Sec. 402. Creditor representation at first meeting of creditors.
Sec. 403. Filing proofs of claim.
Sec. 404. Audit procedures.
Sec. 405. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 406. Debtor to provide tax returns and other information.
Sec. 407. Dismissal for failure to file schedules timely or provide required infor-
mation.
Sec. 408. Adequate time to prepare for hearing on confirmation of the plan.
Sec. 409. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 410. Sense of the Congress regarding expansion of rule 9011 of the Fed-
eral Rules of Bankruptcy Procedure.
Sec. 411. Jurisdiction of courts of appeals.
Sec. 412. Establishment of official forms.
Sec. 413. Elimination of certain fees payable in chapter 11 bankruptcy cases.
Sec. 414. Study of bankruptcy impact of credit extended to dependent students.
Subtitle B—Data Provisions
Sec. 441. Improved bankruptcy statistics.
Sec. 442. Uniform rules for the collection of bankruptcy data.
Sec. 443. Sense of the Congress regarding availability of bankruptcy data.
TITLE V—TAX PROVISIONS
Sec. 501. Treatment of certain liens.
Sec. 502. Enforcement of child and spousal support.
Sec. 503. Effective notice to Government.
Sec. 504. Notice of request for a determination of taxes.
Sec. 505. Rate of interest on tax claims.
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Sec. 506. Tolling of priority of tax claim time periods.
Sec. 507. Assessment defined.
Sec. 508. Chapter 13 discharge of fraudulent and other taxes.
Sec. 509. Chapter 11 discharge of fraudulent taxes.
Sec. 510. Stay of tax proceedings.
Sec. 511. Periodic payment of taxes in chapter 11 cases.
Sec. 512. Avoidance of statutory tax liens prohibited.
Sec. 513. Payment of taxes in the conduct of business.
Sec. 514. Tardily filed priority tax claims.
Sec. 515. Income tax returns prepared by tax authorities.
Sec. 516. Discharge of the estate’s liability for unpaid taxes.
Sec. 517. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 518. Standards for tax disclosure.
Sec. 519. Setoff of tax refunds.
TITLE VI—ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 601. Amendment to add a chapter 6 to title 11, United States Code.
Sec. 602. Amendments to other chapters in title 11, United States Code.
TITLE VII—MISCELLANEOUS
Sec. 701. Technical amendments.
Sec. 702. Application of amendments.
TITLE I—CONSUMER
BANKRUPTCY PROVISIONS
Subtitle A—Needs-Based
Bankruptcy
SEC. 101. NEEDS-BASED BANKRUPTCY.
Title 11, United States Code, is amended—
(1) in section 101 as follows:
(A) by inserting after paragraph (10) the
following:
‘‘(10A) ‘current monthly total income’ means
the average 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 wheth-
er it is taxable income, in the six months preceding
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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 regu-
lar 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;’’; and
(B) by inserting after paragraph (40) the
following:
‘‘(40A) ‘national median family income’ and
‘national median household income for 1 earner’
shall mean during any calendar year, the national
median family income and the national median
household income for 1 earner which the Bureau of
the Census has reported as of January 1 of such cal-
endar year for the most recent previous calendar
year;’’;
(2) in section 104(b)(1) by striking ‘‘109(e)’’
and inserting ‘‘subsections (b), (e), and (h) of sec-
tion 109’’;
(3) in section 109(b)—
(A) in paragraph (2) by striking ‘‘or’’ at
the end;
(B) in paragraph (3) by striking the period
and inserting ‘‘; or’’; and
(C) by adding at the end the following:
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‘‘(4) an individual or, in a joint case, an indi-
vidual and such individual’s spouse, who have in-
come available to pay creditors as determined under
subsection (h).’’;
(4) by adding at the end of section 109 the fol-
lowing:
‘‘(h)(1) An individual or, in a joint case, an individual
and such individual’s spouse, have income available to pay
creditors if the individual, or, in a joint case, the individual
and the individual’s spouse combined, as of the date of
the order for relief, have—
‘‘(A) current monthly total income of not less
than the highest national median family income re-
ported for a family of equal or lesser size or, in the
case of a household of 1 person, of not less than the
national median household income for 1 earner, as
of the date of the order for relief;
‘‘(B) projected monthly net income greater than
$50; and
‘‘(C) projected monthly net income sufficient to
repay twenty percent or more of unsecured nonprior-
ity claims during a five-year repayment plan.
‘‘(2) Projected monthly net income shall be sufficient
under paragraph (1)(C) if, when multiplied by 60 months,
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it equals or exceeds 20 percent of the total amount sched-
uled as payable to unsecured nonpriority creditors.
‘‘(3) ‘Projected monthly net income’ means current
monthly total income less—
‘‘(A) the expense allowances under the applica-
ble National Standards, Local Standards and Other
Necessary Expenses allowance (excluding payments
for debts), issued by the Internal Revenue Service,
for the debtor, the debtor’s dependents, and, in a
joint case, the debtor’s spouse if not otherwise a de-
pendent, in the area in which the debtor resides as
determined by the Internal Revenue Service allow-
ance for such expenses in effect as of the date of the
order for relief;
‘‘(B) the average monthly payment on account
of secured creditors, which shall be calculated as the
total of all amounts scheduled as contractually pay-
able to secured creditors in each month of the 60
months following the date of the petition by the
debtor, or, in a joint case, by the debtor and the
debtor’s spouse combined, and dividing that total by
60 months; and
‘‘(C) the average monthly payment on account
of priority creditors, which shall be calculated as the
total amount of debts entitled to priority, reasonably
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estimated by the debtor as of the date of the peti-
tion, and dividing that total by 60 months.
‘‘(4) In the event that the debtor establishes extraor-
dinary circumstances that require allowance for additional
expenses or adjustment of current monthly total income,
projected monthly net income for purposes of this section
shall be the amount calculated under paragraph (3) less
such additional expenses or income adjustment as such ex-
traordinary circumstances require.
‘‘(A) This paragraph shall not apply unless the
debtor files with the petition—
‘‘(i) a written statement that this para-
graph applies in determining the debtor’s eligi-
bility for relief under chapter 7 of this title;
‘‘(ii) if adjustment of current monthly total
income is claimed, an explanation of any income
that has been lost in the 6 months preceding
the date of determination and any replacement
income that has been offered or secured, or is
expected, and an itemization of such lost and
replacement income;
‘‘(iii) if allowance for additional expenses is
claimed, a list itemizing each additional expense
which exceeds the expenses allowances provided
under paragraph (3)(A);
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‘‘(iv) a detailed description of the extraor-
dinary circumstances that explain why each loss
of income described under clause (ii) will not be
replaced or each additional expense itemized
under clause (iii) requires allowance; and
‘‘(v) a sworn statement signed by the debt-
or and, if the debtor is represented by counsel,
by the debtor’s attorney, that the information
required under this paragraph is true and cor-
rect.
‘‘(B) Until the trustee or any party in interest
objects to the debtor’s statement that this paragraph
applies and the court rejects or modifies the debtor’s
statement, the projected monthly net income in the
debtor’s statement shall be the projected monthly
net income for the purposes of this section. If an ob-
jection is filed with the court within 60 days after
the debtor has provided all the information required
under subsections (a)(1) and (c)(1)(A) of section
521, the court, after notice and hearing, shall deter-
mine whether such extraordinary circumstances exist
and shall establish the amount of the additional ex-
pense allowance, if any. The burden of proving such
extraordinary circumstances shall be on the debtor.’’;
(5) in section 704—
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(A) by striking ‘‘and’’ at the end of para-
graph (8);
(B) by striking the period at the end of
paragraph (9) and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(10) with respect to an individual debtor, re-
view all materials provided by the debtor under sub-
sections (a)(1) and (c)(1) of section 521, investigate
and verify the debtor’s projected monthly net income
and within 30 days after such materials are so pro-
vided—
‘‘(A) file a report with the court as to
whether the debtor qualifies for relief under this
chapter under section 109(b)(4); and
‘‘(B) if the trustee determines that the
debtor does not qualify for such relief, the
trustee shall provide a copy of such report to
the parties in interest.’’;
(6) in section 1302(b)—
(A) in paragraph (4) by striking ‘‘and’’ at
the end;
(B) in paragraph (5) by striking the period
and inserting a semicolon; and
(C) by adding at the end the following:
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‘‘(6) investigate and verify the debtor’s monthly
net income and other information provided by the
debtor pursuant to sections 521 and 1322, and pur-
suant to section 111, if applicable; and
‘‘(7) file annual reports with the court, with
copies to holders of claims under the plan, as to
whether a modification of the amount paid creditors
under the plan is appropriate because of changes in
the debtor’s monthly net income.’’.
SEC. 102. ADEQUATE INCOME SHALL BE COMMITTED TO A
CHAPTER 13 PLAN THAT PAYS UNSECURED
CREDITORS.
Title 11, United States Code, is amended—
(1) in section 101 by inserting after paragraph
(39) the following:
‘‘(39A) ‘monthly net income’ means the amount
determined by taking the current monthly total in-
come of the debtor less—
‘‘(A) the expense allowances under the ap-
plicable National Standards, Local Standards
and Other Necessary Expenses allowance (ex-
cluding payments for debts), issued by the In-
ternal Revenue Service, for the debtor, the
debtor’s dependents, and, in a joint case, the
debtor’s spouse if not otherwise a dependent, in
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the area in which the debtor resides as deter-
mined by the Internal Revenue Service allow-
ance for such expenses in effect as of the date
it is being determined;
‘‘(B) the average monthly payment on ac-
count of secured creditors, which shall be cal-
culated as of the date of determination as the
total of all amounts then remaining to be paid
on account of secured claims pursuant to the
plan less any of such amounts to be paid from
sources other than the debtor’s income, divided
by the total months remaining under the plan;
and
‘‘(C) the average monthly payment on ac-
count of priority creditors, which shall be cal-
culated as the total of all amounts then remain-
ing to be paid on account of priority claims pur-
suant to the plan less any of such amounts to
be paid from sources other than the debtor’s in-
come, divided by the total months remaining
under the plan;’’;
(2) in section 104(b)(1) by striking ‘‘and
523(a)(2)(C)’’ and inserting ‘‘523(a)(2)(C), and
1325(b)(1)’’; and
(3) by adding after section 110 the following:
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‘‘§ 111. Adjustment to monthly net income
‘‘(a) Monthly net income for purposes of a plan under
chapter 13 of this title shall be adjusted under this section
when the debtor’s extraordinary circumstances require ad-
justment as determined herein. Under this section, month-
ly net income shall be determined by subtracting there-
from such loss of income or additional expenses as the
debtor’s extraordinary circumstances require as deter-
mined under this section. This section shall not apply un-
less—
‘‘(1) the debtor files with the court and with the
trustee at the times required in subsection (b) a
statement of extraordinary circumstances as fol-
lows—
‘‘(A) a written statement that this section
applies in determining the debtor’s monthly net
income;
‘‘(B) if applicable, an explanation of any
income that has been lost in the six months
preceding the date of determination and any re-
placement income which has been secured or is
expected, and an itemization of such lost and
replacement income;
‘‘(C) if applicable, a list itemizing each ad-
ditional expense which exceeds the expense al-
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lowance provided in determining monthly net
income under section 101(39A);
‘‘(D) if applicable, a detailed description of
the extraordinary circumstances which explains
why each of the additional expenses itemized
under paragraph (C) requires allowance; and
‘‘(E) a sworn statement signed by the
debtor and, if the debtor is represented by
counsel, by the debtor’s attorney, of the amount
of monthly net income that the debtor has pur-
suant to this subsection and that the informa-
tion provided under this subsection is true and
correct; and
‘‘(2) until the trustee or any party in interest
objects to the debtor’s request that this section be
applied and the court rejects or modifies the debtor’s
statement, the monthly net income in the debtor’s
statement shall be the monthly net income for the
purposes of the debtor’s plan. If an objection is filed
with the court within the times provided in sub-
section (b), the court, after notice and hearing, shall
determine whether such extraordinary circumstances
asserted by the debtor exist and establish the
amount of the loss of income and such additional ex-
pense allowance, if any. The burden of proving such
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extraordinary circumstances and the amount of the
loss of income and the additional expense allowance,
if any, shall be on the debtor. The court may award
to the party that prevails with respect to such objec-
tion a reasonable attorney’s fee and costs incurred
by the prevailing party in connection with such ob-
jection if the court finds that the position of the
nonprevailing party was not substantially justified,
but the court shall not award such fee or such costs
if special circumstances make the award unjust.
‘‘(b) For the purposes of chapter 13 of this title, the
statement of extraordinary circumstances shall be filed
with the court and served on the trustee on or before 45
days before each anniversary of the confirmation of the
plan in order to be applicable during the next year of the
plan. Any objection thereto shall be filed 30 days after
the statement is filed with the trustee. Whenever a state-
ment is timely filed with the trustee, the trustee shall give
notice to creditors that such statement has been filed and
the amount of monthly net income stated therein within
15 days of receipt of the statement.’’;
(4) in section 1322(a)—
(A) by striking ‘‘and’’ at the end of para-
graph (2);
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(B) by striking the period at the end of
paragraph (3) and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(4) state, under penalties of perjury, the
amount of monthly net income, which may be as ad-
justed under section 111, if applicable, of this title
and the amount of monthly net income which will be
paid per month to unsecured nonpriority creditors
under the plan.’’; and
(5) by amending section 1325(b)(1)(B) to read
as follows:
‘‘(B) the plan provides—
‘‘(i) that payments to unsecured nonprior-
ity creditors who are not insiders shall equal or
exceed $50 in each month of the plan;
‘‘(ii) that during the applicable commit-
ment period beginning on the date that the first
payment is due under the plan, the total
amount of monthly net income received by the
debtor shall be paid to unsecured nonpriority
creditors under the plan less only payments
pursuant to section 1326(b); the ‘applicable
commitment period’ shall be not less than 5
years if the debtor’s current monthly total in-
come is not less than the highest national me-
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dian family income reported for a family of
equal or lesser size or, in the case of a house-
hold of 1 person, is not less than the national
median household income for 1 earner, as of
the date of confirmation of the plan and shall
be not less than 3 years if the debtor’s current
monthly total income is 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 1 person, is less than the na-
tional median household income for 1 earner, as
of the date of confirmation of the plan;
‘‘(iii) that the amount payable to each
class of unsecured nonpriority claims under the
plan shall be increased or decreased during the
plan proportionately to the extent the debtor’s
monthly net income during the plan increases
or decreases as reasonably determined by the
trustee, subject to section 111 of this title, no
less frequently than as of each anniversary of
the confirmation of the plan based on monthly
net income as of 45 days before such anniver-
sary; and
‘‘(iv) nothing in subparagraph (i) or (ii)
shall prevent the payment of obligations de-
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scribed in section 507(a)(7) at the times pro-
vided for in the plan, and the plan shall specify
how payments to other creditors under subpara-
graph (ii) will be accordingly adjusted.’’; and
(6) by striking section 1325(b)(2).
SEC. 103. DEFINITION OF INAPPROPRIATE USE.
Section 707(b) of title 11, United States Code, is
amended to read as follows:
‘‘(b)(1) After notice and a hearing, the court—
‘‘(A) on its own motion or on the motion of the
United States trustee or any party in interest, shall
dismiss a case filed by an individual debtor under
this chapter; or
‘‘(B) with the debtor’s consent, convert the case
to a case under chapter 13 of this title;
if the court finds that the granting of relief would be an
inappropriate use of the provisions of this chapter.
‘‘(2) The court shall determine that inappropriate use
of the provisions of this chapter exists if—
‘‘(A) the debtor is excluded from this chapter
pursuant to section 109 of this title; or
‘‘(B) the totality of the circumstances of the
debtor’s financial situation demonstrates such inap-
propriate use.
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‘‘(3) In the case of a motion filed by a party in inter-
est other than the trustee or United States trustee under
paragraph (1) that is denied by the court, the court shall
award against the moving party a reasonable attorney’s
fee and costs that the debtor incurred in opposing the mo-
tion if the court finds that the position of the moving party
was not substantially justified, but the court shall not
award such fee and costs if special circumstances would
make the award unjust.
‘‘(4)(A) If a trustee appointed under this title or the
United States Trustee files a motion under this subsection
and the case is subsequently dismissed or converted to an-
other chapter, the court shall award to such party in inter-
est a reasonable attorney’s fee and costs incurred in con-
nection with such motion, payable by the debtor, unless
the court finds that awarding such fee and costs would
impose an unreasonable hardship on the debtor, consider-
ing the debtor’s conduct.
‘‘(B) The signature of the debtor’s attorney on any
petition, pleading, motion, or other paper filed with the
court in the case of the debtor shall constitute a certificate
that the attorney has—
‘‘(i) performed a reasonable investigation into
the circumstances that gave rise to the petition,
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schedules, and statement of financial affairs or the
pleading, as applicable; and
‘‘(ii) determined that the petition, schedules,
and statement of financial affairs or the pleading, as
applicable, including the choice of this chapter—
‘‘(I) is well grounded in fact; and
‘‘(II) is warranted by existing law or a
good-faith argument for the extension, modi-
fication, or reversal of existing law and does not
constitute an inappropriate use of the provi-
sions of this chapter.
‘‘(C) If the court finds that the attorney for the debt-
or signed a paper in violation of subparagraph (B), at a
minimum, the court shall order—
‘‘(i) the assessment of an appropriate civil pen-
alty against the attorney for the debtor; and
‘‘(ii) the payment of the civil penalty to the
trustee or the United States Trustee.’’.
SEC. 104. DEBTOR PARTICIPATION IN CREDIT COUNSELING
PROGRAM.
(a) WHO MAY BE A DEBTOR.—Section 109 of title
11, United States Code, as amended by section 102, is
amended by adding at the end the following:
‘‘(i)(1) Subject to paragraph (2) and notwithstanding
any other provision of this section, an individual may not
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be a debtor under this title unless such individual has,
during the 90-day period preceding the date of filing of
the petition, made a good-faith attempt to create a debt
repayment plan, through a credit counseling program of-
fered through credit counseling services described in sec-
tion 342(b)(2) that has been approved by—
‘‘(A) the United States trustee; or
‘‘(B) the bankruptcy administrator for the dis-
trict in which the petition is filed.
‘‘(2) The United States trustee or bankruptcy admin-
istrator may not approve a program for inclusion on the
list under paragraph (1) unless the counseling service of-
fering the program offers the program without charge, or
at an appropriately reduced charge, if payment of the reg-
ular charge would impose a hardship on the debtor or the
debtor’s dependents.
‘‘(3) The United States trustee or bankruptcy admin-
istrator shall designate any geographical areas in the
United States trustee region or judicial district, as the
case may be, as to which the United States trustee or
bankruptcy administrator has determined that credit
counseling services needed to comply with this subsection
are not available or are too geographically remote for debt-
ors residing within the designated geographical areas. The
clerk of the bankruptcy court for each judicial district
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shall maintain a list of the designated areas within the
district.
‘‘(4) The clerk shall exclude a particular counseling
service from the list maintained under section 342(b)(2)
of this title if the United States trustee or bankruptcy ad-
ministrator orders that the counseling service not be in-
cluded in the list.
‘‘(5) The court may waive the requirement specified
in paragraph (1) if—
‘‘(A) no credit counseling services are available
as designated under paragraphs (2) and (3);
‘‘(B) the providers of credit counseling services
available in the district are unable or unwilling to
provide such services to the debtor in a timely man-
ner; or
‘‘(C) foreclosure, garnishment, attachment,
eviction, levy of execution, or similar claim enforce-
ment procedure that would have deprived the indi-
vidual of property had commenced before the debtor
could complete a good-faith attempt to create such
a repayment plan.
‘‘(6) A debtor who is subject to the exemption under
paragraph (5)(C) shall be required to make a good-faith
attempt to create a debt repayment plan outside the judi-
cial system in the manner prescribed in paragraph (1)
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during the 30-day period beginning on the date of filing
of the petition of that debtor.
‘‘(7) A debtor shall be exempted from the bad faith
presumption for repeat filing under section 362(c) of title
11 if the case is dismissed due to the creation of a debt
repayment plan.
‘‘(8) Only the United States trustee may make a mo-
tion for dismissal on the ground that the debtor did not
comply with this subsection.’’.
(b) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 406 and 407,
is amended by adding at the end the following:
‘‘(g)(1) In addition to the requirements under sub-
section (a), an individual debtor shall file with the court—
‘‘(A) a certificate from the credit counseling
services that provided the debtor services under sec-
tion 109(i), or a verified statement by the debtor as
to why such attempt was not required under section
109(i) or other substantial evidence of a good-faith
attempt to create a debt repayment plan outside the
bankruptcy system in the manner prescribed in sec-
tion 109(i); and
‘‘(B) a copy of the debt repayment plan, if any,
developed under section 109(i) through the credit
counseling service referred to in paragraph (1).
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‘‘(2) Only the United States trustee may make a mo-
tion for dismissal on the ground that the debtor did not
comply with this subsection.’’.
SEC. 105. WHO MAY BE A DEBTOR UNDER CHAPTER 11.
Section 109(d) of title 11, United States Code, is
amended by inserting ‘‘, or a person described in sub-
section (b)(4)),’’ after ‘‘chapter 7’’.
Subtitle B—Adequate Protections
for Consumers
SEC. 111. NOTICE OF ALTERNATIVES.
(a) Section 342(b) of title 11, United States Code,
is amended to read as follows:
‘‘(b)(1) Before the commencement of a case under
this title by an individual whose debts are primarily con-
sumer debts, the individual shall be given or obtain (as
required to be certified under section 521(a)(1)(B)(viii))
a written notice that is prescribed by the United States
trustee for the district in which the petition is filed pursu-
ant to section 586 of title 28 and that contains the follow-
ing:
‘‘(A) A brief description of chapters 7, 11, 12,
and 13 of this title and the general purpose, bene-
fits, and costs of proceeding under each of such
chapters.
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(b) Section 586(a) of title 28, United States Code,
is amended—
(1) in paragraph (5) by striking ‘‘and’’ at the
end;
(2) in paragraph (6) by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(7) on or before January 1 of each calendar
year, and also within 30 days of any change in the
nonprofit debt counselling services registered with
the bankruptcy court, prescribe and make available
on request the notice described in section 342(b)(1)
of title 11 for each district included in the region.’’.
SEC. 112. 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 of the United States
Code and who operate financial management education
programs for debtors, and shall develop a financial man-
agement training curriculum and materials that can be
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used to educate individual debtors on how to better man-
age their finances.
(b) TEST—(1) The Director shall select 3 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 1-year period beginning not later than 180
days after the date of the enactment of this Act, such cur-
riculum and materials shall be made available by the Di-
rector, directly or indirectly, on request to individual debt-
ors in cases filed in such 1-year period under chapter 7
or 13 of title 11 of the United States Code.
(3) The bankruptcy courts in each of such districts
may require individual debtors in such cases to undergo
such financial management training as a condition to re-
ceiving a discharge in such case.
(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 curricu-
lum 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-
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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
of the United States Code, and by consumer coun-
selling 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 curricu-
lum, such materials, and such programs.
SEC. 113. DEFINITIONS.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (3) the follow-
ing:
‘‘(3A) ‘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 follow-
ing:
‘‘(4A) ‘bankruptcy assistance’ means any goods
or services sold or otherwise provided to an assisted
person with the express or implied purpose of pro-
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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 counselling agency’ means
any person who provides any bankruptcy assistance
to an assisted person in return for the payment of
money or 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
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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. 114. DISCLOSURES.
(a) DISCLOSURES.—Subchapter II of chapter 5 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘§ 526. Disclosures
‘‘(a) A debt relief counselling agency providing bank-
ruptcy assistance to an assisted person shall provide the
following notices 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 counselling agency first offers
to provide any bankruptcy assistance services to an
assisted person, a clear and conspicuous written no-
tice advising assisted persons of the following—
‘‘(A) all information the assisted person is
required to provide with a petition and there-
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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
documents where requested after reasonable in-
quiry to establish such value;
‘‘(C) current monthly total income, pro-
jected monthly net income and, in a chapter 13
case, monthly net income 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 counselling agency providing bank-
ruptcy assistance to an assisted person shall provide each
assisted person at the same time as the notices required
under subsection (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
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a single document separate from other documents or no-
tices provided to the assisted person:
‘‘ ‘IMPORTANT INFORMATION ABOUT BANK-
RUPTCY ASSISTANCE SERVICES FROM AN AT-
TORNEY OR BANKRUPTCY PETITION PREPARER
‘‘ ‘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
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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
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.
‘‘ ‘If you choose to file a chapter 13 case in which
you repay your creditors what you can afford over three
to seven 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.’.
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‘‘(c) Except to the extent the debt relief counselling
agency provides the required information itself after rea-
sonably diligent inquiry of the assisted person or others
so as to obtain such information reasonably accurately for
inclusion on the petition, schedules or statement of finan-
cial affairs, a debt relief counselling agency providing
bankruptcy assistance to an assisted person, to the extent
permitted by nonbankruptcy law, shall provide each as-
sisted person at the time required for the notice required
under subsection (a)(1) reasonably sufficient information
(which may be provided orally or in a clear and conspicu-
ous 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 total income, projected
monthly income and, in a chapter 13 case, net
monthly income, 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.
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‘‘(d) A debt relief counselling agency shall maintain
a copy of the notices required under subsection (a) of this
section for two years after the later of the date on which
the notice is given the assisted person.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tion for chapter 5 of title 11, United States Code, is
amended by inserting after the item relating to section
525 the following:
‘‘526. Disclosures.’’.
SEC. 115. DEBTOR’S BILL OF RIGHTS.
(a) DEBTOR’S BILL OF RIGHTS.—Subchapter II of
chapter 5 of title 11, United States Code, as amended by
section 114, is amended by adding at the end the follow-
ing:
‘‘§ 527. Debtor’s bill of rights
‘‘(a) A debt relief counselling agency shall—
‘‘(1) no later than three business days after the
first date on which a debt relief counselling agency
provides any bankruptcy assistance services to an
assisted person, execute a written contract with the
assisted person specifying clearly and conspicuously
the services the agency will provide the assisted per-
son and the basis on which fees or charges will be
made for such services and the terms of payment,
and give the assisted person a copy of the fully exe-
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cuted 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
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 counselling
agency. We help people file Bankruptcy petitions to
obtain relief under the Bankruptcy Code.’ or a sub-
stantially similar statement. An advertisement shall
be of bankruptcy assistance services if it describes or
offers 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 counselling agen-
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cy provides assistance with respect to credit defaults,
mortgage foreclosures, lease eviction proceedings, ex-
cessive debt, debt collection pressure, or inability to
pay any consumer debt, disclose conspicuously in
that advertisement that the assistance is with re-
spect to or may involve proceedings under this title,
using the following statement: ‘‘We are a debt relief
counselling agency. We help people file Bankruptcy
petitions to obtain relief under the Bankruptcy
Code.’’ or a substantially similar statement.
‘‘(b) A debt relief counselling agency shall not—
‘‘(1) fail to perform any service which the debt
relief counseling agency has told the assisted person
or prospective assisted person the agency would pro-
vide that person in connection with the preparation
for or activities during a 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 proceeding under this title,
which is untrue and misleading or which upon the
exercise of reasonable care, should be known by the
debt relief counselling agency to be untrue or mis-
leading;
‘‘(3) misrepresent to any assisted person or pro-
spective assisted person, directly or indirectly, af-
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firmatively or by material omission, what services
the debt relief counselling agency can reasonably ex-
pect to provide that person, or the benefits an as-
sisted person may obtain or the difficulties the per-
son may experience if the person seeks relief in a
proceeding pursuant to this title; or
‘‘(4) advise an assisted person or prospective
assisted person to incur more debt in contemplation
of that person filing a proceeding under this title or
in order to pay an attorney or bankruptcy petition
preparer fee or charge for services performed as part
of preparing for or representing a debtor in a pro-
ceeding under this title.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tion for chapter 5 of title 11, United States Code, as
amended by section 114, is amended by inserting after the
item relating to section 526, the following:
‘‘527. Debtor’s bill of rights.’’.
SEC. 116. ENFORCEMENT.
(a) ENFORCEMENT.—Subchapter II of chapter 5 of
title 11, United States Code, as amended by sections 114
and 115, is amended by adding at the end the following:
‘‘§ 528. Debt relief counselling agency enforcement
‘‘(a) ASSISTED PERSON WAIVERS INVALID.—Any
waiver by any assisted person of any protection or right
provided by or under section 526 or 527 of this title shall
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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, if the court, on its own motion or on
the motion of the United States trustee, finds that
a person intentionally violated section 526 or 527 of
this title, or engaged in a clear and consistent pat-
tern or practice of violating section 526 or 527 of
this title, 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 and
sections 526 and 527 shall not annul, alter, affect or ex-
empt 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 inconsistency.’’.
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(b) CONFORMING AMENDMENT.—The table of sec-
tion for chapter 5 of title 11, United States Code, as
amended by sections 114 and 115, is amended by inserting
after the item relating to section 527, the following:
‘‘528. Debt relief counselling agency enforcement.’’.
SEC. 117. 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. 118. CHARITABLE CONTRIBUTIONS.
(a) DEFINITIONS.—Section 548(d) of title 11, United
States Code, is amended by adding at the end the follow-
ing:
‘‘(3) In this section, the term ‘charitable contribution’
means a charitable contribution as defined in section
170(c) of the Internal Revenue Code of 1986, if such con-
tribution—
‘‘(A) is made by a natural person; and
‘‘(B) consists of—
‘‘(i) a financial instrument (as defined in
section 731(c)(2)(C) of the Internal Revenue
Code of 1986); or
‘‘(ii) cash.
‘‘(4) In this section, the term ‘qualified religious or
charitable entity or organization’ means—
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‘‘(A) an entity described in section 170(c)(1) of
the Internal Revenue Code of 1986; or
‘‘(B) an entity or organization described in sec-
tion 170(c)(2) of the Internal Revenue Code of
1986.’’.
(b) TREATMENT OF PREPETITION QUALIFIED CHAR-
ITABLE CONTRIBUTIONS.—
(1) IN GENERAL.—Section 548(a) of title 11,
United States Code, is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(a)’’;
(B) by striking ‘‘(1) made’’ and inserting
‘‘(A) made’’;
(C) by striking ‘‘(2)(A)’’ and inserting
‘‘(B)(i)’’;
(D) by striking ‘‘(B)(i)’’ and inserting
‘‘(ii)(I)’’;
(E) by striking ‘‘(ii) was’’ and inserting
‘‘(II) was’’;
(F) by striking ‘‘(iii)’’ and inserting
‘‘(III)’’; and
(G) by adding at the end the following:
‘‘(2) A transfer of a charitable contribution to a
qualified religious or charitable entity or organization shall
not be considered to be a transfer covered under para-
graph (1)(B) in any case in which—
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‘‘(A) the amount of such contribution, together
with any other such contribution, does not exceed 15
percent of the gross annual income of the debtor for
the year in which the transfer of the contribution is
made; or
‘‘(B) the contribution made by a debtor exceed-
ed the percentage amount of gross annual income
specified in subparagraph (A), if the transfer was
consistent with the practices of the debtor in making
charitable contributions.’’.
(2) TRUSTEE AS LIEN CREDITOR AND AS SUC-
CESSOR
TO
CERTAIN
CREDITORS
AND
PUR-
CHASERS.—Section 544(b) of title 11, United States
Code, is amended—
(A) by striking ‘‘(b) The trustee’’ and in-
serting ‘‘(b)(1) Except as provided in paragraph
(2), the trustee’’; and
(B) by adding at the end the following:
‘‘(2) Paragraph (1) shall not apply to a transfer of
a charitable contribution (as defined in section 548(d)(3)
of this title) that is not covered under section
548(a)(1)(B) of this title by reason of section 548(a)(2)
of this title. Any claim by any person to recover a trans-
ferred contribution described in the preceding sentence
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under Federal or State law in a Federal or State court
shall be preempted by the commencement of the case.’’.
(3) CONFORMING AMENDMENTS.—Section 546
of title 11, United States Code, is amended—
(A)in subsection (e)—
(i) by striking ‘‘548(a)(2)’’ and insert-
ing ‘‘548(a)(1)(B)’’; and
(ii) by striking ‘‘548(a)(1)’’ and in-
serting ‘‘548(a)(1)(A)’’;
(B) in subsection (f)—
(i) by striking ‘‘548(a)(2)’’ and insert-
ing ‘‘548(a)(1)(B)’’; and
(ii) by striking ‘‘548(a)(1)’’ and in-
serting ‘‘548(a)(1)(A)’’; and
(C) in the first subsection (g)—
(i) by striking ‘‘section 548(a)(1)’’
and inserting ‘‘section 548(a)(1)(A)’’; and
(ii) by striking ‘‘548(a)(2)’’ and in-
serting ‘‘548(a)(1)(B)’’.
(c) TREATMENT
OF POST-PETITION CHARITABLE
CONTRIBUTIONS UNDER CHAPTER 7.—Section 707 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(c) In making a determination whether to dismiss
a case under this section, the court may not take into con-
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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 defined in section 548(d)(4)).’’.
(d) TREATMENT
OF POST-PETITION CHARITABLE
CONTRIBUTIONS UNDER CHAPTER 13.—Section 111 of
title 11, United States Code, as added by section 102, is
amended by adding at the end the following:
‘‘(c) For purposes of subsection (a), charitable con-
tributions (that meet the definition of ‘charitable contribu-
tion’ under section 548(d)(3)) to any qualified religious
or charitable entity or organization (defined in section
548(d)(4)), but not to exceed 15 percent of the debtor’s
gross income for the year in which such contributions are
made, shall be considered to be additional expenses of the
debtor required by extraordinary circumstances.’’.
(e) RULE
OF
CONSTRUCTION.—Nothing in the
amendments made by this section is intended to limit the
applicability of the Religious Freedom Restoration Act of
1993 (42 U.S.C. 2000bb et seq.).
SEC. 119. REINFORCE THE FRESH START.
(a) RESTORATION OF AN EFFECTIVE DISCHARGE.—
Section 523(a)(17) of title 11, United States Code, is
amended—
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(1) by striking ‘‘by a court’’ and inserting ‘‘on
a prisoner by any court’’,
(2) by striking ‘‘section 1915(b) or (f)’’ and in-
serting ‘‘subsection (b) or (f)(2) of section 1915’’,
and
(3) by inserting ‘‘(or a similar non-Federal
law)’’ after ‘‘title 28’’ each place it appears.
(b) PROTECTION OF RETIREMENT FUNDS IN BANK-
RUPTCY.—Section 522 of title 11, United States Code, is
amended—
(1) in subsection (b)(2)—
(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) retirement funds to the extent exempt
from taxation under section 401, 403, 408, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’; and
(2) in subsection (d) by adding at the end the
following:
‘‘(12) Retirement funds to the extent exempt
from taxation under 401, 403, 408, 414, 457, or
501(a) of the Internal Revenue Code of 1986.’’.
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(c) EFFECTIVE PROTECTION FOR UTILITY SERVICE
IN THE WAKE OF DEREGULATION.—Section 366 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(c) For the purposes of this section, the term ‘util-
ity’ includes any provider of gas, electric, telephone, tele-
communication, cable television, satellite communication,
water, or sewer service, whether or not such service is a
regulated monopoly.’’.
SEC. 119A. CHAPTER 11 DISCHARGE OF DEBTS ARISING
FROM TOBACCO-RELATED DEBTS.
Section 1141(d) of title 11, United States Code, is
amended by adding at the end the following:
‘‘(5) The confirmation of a plan does not discharge
a debtor that is a corporation from any debt arising from
a judicial, administrative, or other action or proceeding
that is—
‘‘(A) related to the consumption or consumer
purchase of a tobacco product; and
‘‘(B) based in whole or in part on false pre-
tenses, a false representation, or actual fraud.’’.
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Subtitle C—Adequate Protections
for Secured Creditors
SEC. 121. 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, and if a single or joint case of that debtor was
pending within the previous 1-year period but was
dismissed, other than a case refiled under a chapter
other than chapter 7 after dismissal under section
707(b) of this title, the stay under subsection (a)
with respect 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 motion by a party in interest for continuation
of the automatic stay and upon notice and a hear-
ing, the court may extend the stay in particular
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cases as to any or all creditors (subject to such con-
ditions or limitations as the court may then impose)
after notice and a hearing completed before the expi-
ration of the 30-day period only if the party in inter-
est demonstrates that the filing of the later case is
in good faith as to the creditors to be stayed. A case
is presumptively filed not in good faith (but such
presumption may be rebutted by clear and convinc-
ing evidence to the contrary)—
‘‘(A) as to all creditors if—
‘‘(i) more than 1 previous case under
any of chapters 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 individ-
ual 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 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 chap-
ter 11 or 13 case, a confirmed 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 that case, that action
was still pending or had been resolved by termi-
nating, conditioning, or limiting the stay as to
actions of that creditor.
‘‘(4) If a single or joint case is filed by or
against an individual debtor under this title, and if
2 or more single or joint cases of that debtor were
pending within the previous year but were dismissed,
other than a case refiled under section 707(b) of this
HR 3150 PCS
title, 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 fil-
ing 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 limitations 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 pursuant 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 pre-
sumption may be rebutted by clear and convincing
evidence to the contrary)—
‘‘(A) as to all creditors if—
‘‘(i) 2 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-
missed within the time period stated in