225
(b) PURPOSE.—The rules and forms proposed under 
subsection (a) shall be designed to achieve a practical bal-
ance among—
(1) the reasonable needs of the bankruptcy 
court, the United States trustee, creditors, and other 
parties in interest for reasonably complete informa-
tion; 
(2) a small business debtor’s interest that re-
quired reports be easy and inexpensive to complete; 
and 
(3) the interest of all parties that the required 
reports help such debtor to understand such debtor’s 
financial condition and plan the such debtor’s fu-
ture. 
SEC. 436. DUTIES IN SMALL BUSINESS CASES. 
(a) DUTIES IN CHAPTER 11 CASES.—Subchapter I 
of chapter 11 of title 11, United States Code, as amended 
by section 321, is amended by adding at the end the fol-
lowing: 
‘‘§ 1116. Duties of trustee or debtor in possession in 
small business cases 
‘‘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—
226
‘‘(1) append to the voluntary petition or, in an 
involuntary case, file not later than 7 days after the 
date of the order for relief—
‘‘(A) its most recent balance sheet, state-
ment of operations, cash-flow statement, and 
Federal 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 senior management 
personnel and counsel, meetings scheduled by the 
court or the United States trustee, including initial 
debtor interviews, scheduling conferences, and meet-
ings of creditors convened under section 341 unless 
the court, after notice and a hearing, waives that re-
quirement upon a finding of extraordinary and com-
pelling circumstances; 
‘‘(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;
227
‘‘(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), maintain in-
surance customary and appropriate to the industry; 
‘‘(6)(A) timely file tax returns and other re-
quired government filings; and 
‘‘(B) subject to section 363(c)(2), timely pay all 
taxes entitled to administrative expense priority ex-
cept those being contested by appropriate pro-
ceedings being diligently prosecuted; and 
‘‘(7) allow the United States trustee, or a des-
ignated representative of the United States trustee, 
to inspect the debtor’s business premises, books, and 
records at reasonable times, after reasonable prior 
written notice, unless notice is waived by the debt-
or.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 11 of title 11, United States Code, as amended 
by section 321, is amended by inserting after the item re-
lating to section 1115 the following:
‘‘1116. Duties of trustee or debtor in possession in small business cases.’’.
SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES. 
Section 1121 of title 11, United States Code, is 
amended by striking subsection (e) and inserting the fol-
lowing:
228
‘‘(e) In a small business case—
‘‘(1) only the debtor may file a plan until after 
180 days after the date of the order for relief, unless 
that period is—
‘‘(A) extended as provided by this sub-
section, after notice and a hearing; or 
‘‘(B) the court, for cause, orders otherwise; 
‘‘(2) the plan and a disclosure statement (if 
any) shall be filed not later than 300 days after the 
date of the order for relief; and 
‘‘(3) the time periods specified in paragraphs 
(1) and (2), and the time fixed in section 1129(e) 
within which the plan shall be confirmed, may be ex-
tended only if—
‘‘(A) the debtor, after providing notice to 
parties in interest (including the United States 
trustee), demonstrates by a preponderance of 
the evidence that it is more likely than not that 
the court will confirm a plan within a reason-
able period of time; 
‘‘(B) a new deadline is imposed at the time 
the extension is granted; and 
‘‘(C) the order extending time is signed be-
fore the existing deadline has expired.’’.
229
SEC. 438. 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 court shall confirm 
a plan that complies with the applicable provisions of this 
title and that is filed in accordance with section 1121(e) 
not later than 45 days after the plan is filed unless the 
time for confirmation is extended in accordance with sec-
tion 1121(e)(3).’’. 
SEC. 439. 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-
tional duties specified in title 11 pertaining to 
such cases; and’’; 
(2) in paragraph (5), by striking ‘‘and’’ at the 
end;
230
(3) in paragraph (6), by striking the period at 
the end and inserting a semicolon; and 
(4) by adding at the end the following: 
‘‘(7) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as 
soon as practicable after the date of the order 
for relief but before the first meeting scheduled 
under section 341(a) of title 11, at which time 
the United States trustee shall—
‘‘(i) begin to investigate the debtor’s 
viability; 
‘‘(ii) inquire about the debtor’s busi-
ness plan; 
‘‘(iii) explain the debtor’s obligations 
to file monthly operating reports and other 
required reports; 
‘‘(iv) attempt to develop an agreed 
scheduling order; and 
‘‘(v) inform the debtor of other obliga-
tions; 
‘‘(B) if determined to be appropriate and 
advisable, visit the appropriate business prem-
ises of the debtor, ascertain the state of the 
debtor’s books and records, and verify that the 
debtor has filed its tax returns; and
231
‘‘(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 any case 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 after making that finding to 
the court for relief.’’. 
SEC. 440. SCHEDULING CONFERENCES. 
Section 105(d) of title 11, United States Code, is 
amended—
(1) in the matter preceding paragraph (1), by 
striking ‘‘, may’’; and 
(2) by striking paragraph (1) and inserting the 
following: 
‘‘(1) shall hold such status conferences as are 
necessary to further the expeditious and economical 
resolution of the case; and’’. 
SEC. 441. SERIAL FILER PROVISIONS. 
Section 362 of title 11, United States Code, as 
amended by sections 106, 305, and 311, is amended—
(1) in subsection (k), as so redesignated by sec-
tion 305—
232
(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, the recovery under paragraph (1) of 
this subsection against such entity shall be limited to ac-
tual damages.’’; and 
(2) by adding at the end the following: 
‘‘(n)(1) Except as provided in paragraph (2), sub-
section (a) does not apply in a case in which the debtor—
‘‘(A) is a debtor in a small business case pend-
ing at the time the petition is filed; 
‘‘(B) was a debtor in a small business case that 
was dismissed for any reason by an order that be-
came 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 small business case in 
which a plan was confirmed 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 acquired substan-
tially all of the assets or business of a small business 
debtor described in subparagraph (A), (B), or (C),
233
unless such entity establishes by a preponderance of 
the evidence that such entity acquired substantially 
all of the assets or business of such small business 
debtor in good faith and not for the purpose of evad-
ing this paragraph. 
‘‘(2) Paragraph (1) does not apply—
‘‘(A) to an involuntary case involving no collu-
sion by the debtor with creditors; or 
‘‘(B) to the filing of a petition if—
‘‘(i) the debtor proves by a preponderance 
of the evidence that the filing of the petition re-
sulted from circumstances beyond the control of 
the debtor not foreseeable at the time the case 
then pending was filed; and 
‘‘(ii) it is more likely than not that the 
court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable period of 
time.’’. 
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE. 
(a) EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION.—Section 1112 of title 11, United States Code, 
is amended by striking subsection (b) and inserting the 
following:
234
‘‘(b)(1) Except as provided in paragraph (2) of this 
subsection, subsection (c) of this section, and section 
1104(a)(3), on request of a party in interest, and after 
notice and a hearing, absent unusual circumstances spe-
cifically identified by the court that establish that the re-
quested conversion or dismissal is not in the best interests 
of creditors and the estate, the court shall convert a case 
under this chapter to a case under chapter 7 or dismiss 
a case under this chapter, whichever is in the best inter-
ests of creditors and the estate, if the movant establishes 
cause. 
‘‘(2) The relief provided in paragraph (1) shall not 
be granted absent unusual circumstances specifically iden-
tified by the court that establish that such relief is not 
in the best interests of creditors and the estate, if the 
debtor or another party in interest objects and establishes 
that—
‘‘(A) there is a reasonable likelihood that a plan 
will be confirmed within the timeframes established 
in sections 1121(e) and 1129(e) of this title, or if 
such sections do not apply, within a reasonable pe-
riod of time; and 
‘‘(B) the grounds for granting such relief in-
clude an act or omission of the debtor other than 
under paragraph (4)(A)—
235
‘‘(i) for which there exists a reasonable 
justification for the act or omission; and 
‘‘(ii) that will be cured within a reasonable 
period of time fixed by the court. 
‘‘(3) The court shall commence the hearing on a mo-
tion under this subsection not later than 30 days after 
filing of the motion, and shall decide the motion not later 
than 15 days after commencement of such hearing, unless 
the movant expressly consents to a continuance for a spe-
cific period of time or compelling circumstances prevent 
the court from meeting the time limits established by this 
paragraph. 
‘‘(4) For purposes of this subsection, the term ‘cause’ 
includes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate and the absence of a reasonable 
likelihood of rehabilitation; 
‘‘(B) gross mismanagement of the estate; 
‘‘(C) failure to maintain appropriate insurance 
that poses a risk to the estate or to the public; 
‘‘(D) unauthorized use of cash collateral sub-
stantially harmful to 1 or more creditors; 
‘‘(E) failure to comply with an order of the 
court;
236
‘‘(F) unexcused failure to satisfy timely any fil-
ing or reporting requirement established by this title 
or by any rule applicable to a case under this chap-
ter; 
‘‘(G) failure to attend the meeting of creditors 
convened under section 341(a) or an examination or-
dered under rule 2004 of the Federal Rules of 
Bankruptcy Procedure without good cause shown by 
the debtor; 
‘‘(H) failure timely to provide information or 
attend meetings reasonably requested by the United 
States trustee (or the bankruptcy administrator, if 
any); 
‘‘(I) failure timely to pay taxes owed after the 
date of the order for relief or to file tax returns due 
after the date of the order for relief; 
‘‘(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; 
‘‘(L) revocation of an order of confirmation 
under section 1144; 
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan;
237
‘‘(N) material default by the debtor with re-
spect to a confirmed plan; 
‘‘(O) termination of a confirmed plan by reason 
of the occurrence of a condition specified in the plan; 
and 
‘‘(P) failure of the debtor to pay any domestic 
support obligation that first becomes payable after 
the date of the filing of the petition.’’. 
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF 
TRUSTEE.—Section 1104(a) of title 11, United States 
Code, is amended—
(1) in paragraph (1), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (2), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(3) if grounds exist to convert or dismiss the 
case under section 1112, but the court determines 
that the appointment of a trustee or an examiner is 
in the best interests of creditors and the estate.’’. 
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED 
STATES CODE, WITH RESPECT TO SMALL 
BUSINESSES. 
Not later than 2 years after the date of enactment 
of this Act, the Administrator of the Small Business Ad-
238
ministration, in consultation with the Attorney General, 
the Director of the Executive Office for 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 
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. 444. 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
239
(2) by striking subparagraph (B) and inserting 
the following: 
‘‘(B) the debtor has commenced monthly 
payments that—
‘‘(i) may, in the debtor’s sole discre-
tion, notwithstanding section 363(c)(2), be 
made from rents or other income generated 
before, on, or after the date of the com-
mencement of the case by or from the 
property to each creditor whose claim is se-
cured by such real estate (other than a 
claim secured by a judgment lien or by an 
unmatured statutory lien); and 
‘‘(ii) are in an amount equal to inter-
est at the then applicable nondefault con-
tract rate of interest on the value of the 
creditor’s interest in the real estate; or’’. 
SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES. 
Section 503(b) 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 at 
the end and inserting a semicolon; and 
(3) by adding at the end the following:
240
‘‘(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 a penalty provi-
sion, for the period of 2 years following the later of 
the rejection date or the 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 an entity other than the debt-
or, and the claim for remaining sums due for the 
balance of the term of the lease shall be a claim 
under section 502(b)(6);’’. 
SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A 
PLAN ADMINISTRATOR OF AN EMPLOYEE 
BENEFIT PLAN. 
(a) IN GENERAL.—Section 521(a) of title 11, United 
States Code, as amended by sections 106 and 304, 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 after paragraph (6) the following:
241
‘‘(7) unless a trustee is serving in the case, con-
tinue to perform the obligations required of the ad-
ministrator (as defined in section 3 of the Employee 
Retirement Income Security Act of 1974) of an em-
ployee benefit plan if at the time of the commence-
ment of the case the debtor (or any entity des-
ignated by the debtor) served as such adminis-
trator.’’. 
(b) DUTIES OF TRUSTEES.—Section 704(a) of title 
11, United States Code, as amended by sections 102 and 
219, is amended—
(1) in paragraph (10), by striking ‘‘and’’ at the 
end; and 
(2) by adding at the end the following: 
‘‘(11) if, at the time of the commencement of 
the case, the debtor (or any entity designated by the 
debtor) served as the administrator (as defined in 
section 3 of the Employee Retirement Income Secu-
rity Act of 1974) of an employee benefit plan, con-
tinue to perform the obligations required of the ad-
ministrator; and’’. 
(c) CONFORMING AMENDMENT.—Section 1106(a)(1) 
of title 11, United States Code, is amended to read as 
follows:
242
‘‘(1) perform the duties of the trustee, as speci-
fied in paragraphs (2), (5), (7), (8), (9), (10), and 
(11) of section 704;’’. 
SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EM-
PLOYEES. 
Section 1114(d) of title 11, United States Code, is 
amended—
(1) by striking ‘‘appoint’’ and inserting ‘‘order 
the appointment of’’, and 
(2) by adding at the end the following: ‘‘The 
United States trustee shall appoint any such com-
mittee.’’. 
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
243
(2) by striking the last sentence and inserting 
the following: 
‘‘(b) The commencement of a voluntary case under 
a chapter of this title constitutes an order for relief under 
such chapter.’’. 
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—BANKRUPTCY DATA 
SEC. 601. IMPROVED BANKRUPTCY STATISTICS. 
(a) IN GENERAL.—Chapter 6 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 159. Bankruptcy statistics 
‘‘(a) The clerk of the district court, or the clerk of 
the bankruptcy court if one is certified pursuant to section 
156(b) of this title, shall collect statistics regarding debt-
ors who are individuals with primarily consumer debts 
seeking relief under chapters 7, 11, and 13 of title 11. 
Those statistics shall be in a standardized format pre-
scribed by the Director of the Administrative Office of the
244
United States Courts (referred to in this section as the 
‘Director’). 
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a); 
‘‘(2) make the statistics available to the public; 
and 
‘‘(3) not later than July 1, 2008, and annually 
thereafter, prepare, and submit to Congress a report 
concerning the information collected under sub-
section (a) that contains an analysis of the informa-
tion. 
‘‘(c) The compilation required under subsection (b) 
shall—
‘‘(1) be itemized, by chapter, with respect to 
title 11; 
‘‘(2) be presented in the aggregate and for each 
district; and 
‘‘(3) include information concerning—
‘‘(A) the total assets and total liabilities of 
the debtors described in subsection (a), and in 
each category of assets and liabilities, as re-
ported in the schedules prescribed pursuant to 
section 2075 of this title and filed by debtors;
245
‘‘(B) the current monthly income, average 
income, and average expenses of debtors as re-
ported on the schedules and statements that 
each such debtor files under sections 521 and 
1322 of title 11; 
‘‘(C) the aggregate amount of debt dis-
charged in cases filed during the reporting pe-
riod, determined as the difference between the 
total amount of debt and obligations of a debtor 
reported on the schedules and the amount of 
such debt reported in categories which are pre-
dominantly nondischargeable; 
‘‘(D) the average period of time between 
the date of the filing of the petition and the 
closing of the case for cases closed during the 
reporting period; 
‘‘(E) for cases closed during the reporting 
period—
‘‘(i) the number of cases in which a 
reaffirmation agreement was filed; and 
‘‘(ii)(I) the total number of reaffirma-
tion agreements filed; 
‘‘(II) of those cases in which a reaffir-
mation agreement was filed, the number of
246
cases in which the debtor was not rep-
resented by an attorney; and 
‘‘(III) of those cases in which a reaf-
firmation agreement was filed, the number 
of cases in which the reaffirmation agree-
ment was approved by the court; 
‘‘(F) with respect to cases filed under 
chapter 13 of title 11, for the reporting pe-
riod—
‘‘(i)(I) the number of cases in which a 
final order was entered determining the 
value of property securing a claim in an 
amount less than the amount of the claim; 
and 
‘‘(II) the number of final orders en-
tered determining the value of property se-
curing a claim; 
‘‘(ii) the number of cases dismissed, 
the number of cases dismissed for failure 
to make payments under the plan, the 
number of cases refiled after dismissal, 
and the number of cases in which the plan 
was completed, separately itemized with re-
spect to the number of modifications made 
before completion of the plan, if any; and
247
‘‘(iii) the number of cases in which 
the debtor filed another case during the 6-
year period preceding the filing; 
‘‘(G) the number of cases in which credi-
tors were fined for misconduct and any amount 
of punitive damages awarded by the court for 
creditor misconduct; and 
‘‘(H) the number of cases in which sanc-
tions under rule 9011 of the Federal Rules of 
Bankruptcy Procedure were imposed against 
debtor’s attorney or damages awarded under 
such Rule.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 6 of title 28, United States Code, is amended 
by adding at the end the following:
‘‘159. Bankruptcy statistics.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 18 months after the date of 
enactment of this Act. 
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA. 
(a) AMENDMENT.—Chapter 39 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing:
248
‘‘§ 589b. Bankruptcy data 
‘‘(a) RULES.—The Attorney General shall, within a 
reasonable time after the effective date of this section, 
issue rules requiring uniform forms for (and from time 
to time thereafter to appropriately modify and approve)—
‘‘(1) final reports by trustees in cases under 
chapters 7, 12, and 13 of title 11; and 
‘‘(2) periodic reports by debtors in possession or 
trustees in cases under chapter 11 of title 11. 
‘‘(b) REPORTS.—Each report referred to in sub-
section (a) shall be designed (and the requirements as to 
place and manner of filing shall be established) so as to 
facilitate compilation of data and maximum possible ac-
cess of the public, both by physical inspection at one or 
more central filing locations, and by electronic access 
through the Internet or other appropriate media. 
‘‘(c) REQUIRED INFORMATION.—The information re-
quired to be filed in the reports referred to in subsection 
(b) shall be that which is in the best interests of debtors 
and creditors, and in the public interest in reasonable and 
adequate information to evaluate the efficiency and practi-
cality of the Federal bankruptcy system. In issuing rules 
proposing the forms referred to in subsection (a), the At-
torney General shall strike the best achievable practical 
balance between—