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‘‘(6) For the purposes of this section, a case is
pending from the time of the order for relief until
the case is closed.’’.
SEC. 122. DEFINITION OF HOUSEHOLD GOODS.
Section 101 of title 11, United States Code, is
amended by inserting after paragraph (27) the following:
‘‘(27A) ‘household goods’ has the meaning
given such term in the Trade Regulation Rule on
Credit Practices promulgated by the Federal Trade
Commission (16 C.F.R. 444.1(i)), as in effect on the
effective date of this paragraph, except that the term
shall also include any tangible personal property rea-
sonably necessary for the maintenance and support
of a dependent child;’’.
SEC. 123. 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;
(B) in paragraph (5) by striking the period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) in an individual case under chapter 7 of
this title, not retain possession of personal property
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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 1 of the fol-
lowing actions within 30 days after the first meeting
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 30-day pe-
riod, the personal property affected shall no longer
be property of the estate, and the creditor may take
whatever action as to such property as is permitted
by applicable nonbankruptcy law, unless the court
determines on the motion of the trustee, and after
notice and a hearing, that such property is of con-
sequential value or benefit to the estate.’’; and
(2) in section 722 by inserting ‘‘in full at the
time of redemption’’ before the period at the end.
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SEC. 124. 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 fol-
lows—
(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 property of the estate securing in whole
or in part a claim, or subject to an unexpired lease, if
the debtor fails within 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
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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,
and after notice and a hearing, that such property is of
consequential value or benefit to the estate.’’;
(2) in section 521, as amended by sections 104,
406, and 407—
(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)’’; and
(ii) by striking ‘‘forty-five day’’ the
second place it appears and inserting ‘‘30-
day’’;
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(C) in paragraph (2)(C) by inserting ‘‘ex-
cept as provided in section 362(h)’’ before the
semicolon; and
(D) by adding at the end the following:
‘‘(h) 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
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, nothing 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 agree-
ment 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 jus-
tify limiting such a provision in any other circumstance.’’.
SEC. 125. 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
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debt determined under nonbankruptcy law or
discharge under section 1328, and that if the
case under this chapter is dismissed or con-
verted without completion of the plan, such lien
shall also be retained by such holder to the ex-
tent recognized by applicable nonbankruptcy
law; and’’.
SEC. 126. PROMPT RELIEF FROM THE AUTOMATIC STAY IN
INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is
amended by inserting at the end the following:
‘‘Notwithstanding the foregoing, in the case of an individ-
ual filing under chapter 7, 11, or 13, the stay under sub-
section (a) shall terminate 60 days after a request under
subsection (d) of this section, unless—
‘‘(1) a final decision is rendered by the court
within such 60-day period; or
‘‘(2) such 60-day period is extended either by
agreement of all parties in interest or by the court
for a specific time which the court finds is required
by compelling circumstances as described in findings
made by the court.’’.
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SEC. 127. STOPPING ABUSIVE CONVERSIONS FROM CHAP-
TER 13.
Section 348(f)(1) of title 11, United States Code, is
amended—
(1) by striking in subparagraph (B) ‘‘in the
converted case, with allowed secured claims’’ and in-
serting in lieu thereof ‘‘only in a case converted to
chapter 11 or 12 but not in one converted to chapter
7, with allowed secured claims in cases under chap-
ters 11 and 12’’; and
(2) in subparagraph (A) by striking ‘‘and’’ at
the end;
(3) in subparagraph (B) by striking the period
and inserting ‘‘; and’’; and
(4) by adding at the end the following:
‘‘(C) with respect to a case converted from
chapter 13, the claim of any creditor holding secu-
rity as of the date of the petition shall continue to
be secured by that security unless the full amount
of that claim determined under applicable nonbank-
ruptcy law has been paid in full as of the date of
conversion, notwithstanding any valuation or deter-
mination of the amount of an allowed secured claim
made for the purposes of the case under chapter of
this title. Unless a prebankruptcy default has been
fully cured pursuant to the plan at the time of con-
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version, in any proceeding under this title or other-
wise, the default shall have the effect given under
applicable nonbankruptcy law.’’.
SEC. 128. 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 180 days 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-
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rity may be determined under subsection (a), but the
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).’’.
SEC. 129. 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. 130. PROTECTION OF HOLDERS OF CLAIMS SECURED
BY DEBTOR’S PRINCIPAL RESIDENCE.
Title 11, United States Code, is amended—
(1) in section 101 by inserting after paragraph
(13) the following:
‘‘(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 condomin-
ium or cooperative unit or mobile or manufactured
home or trailer;
‘‘(13B) ‘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;’’;
(2) in section 362(b)—
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(A) in paragraph (17) by striking ‘‘or’’ at
the end thereof;
(B) in paragraph (18) by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(C) by inserting after paragraph (18) the
following:
‘‘(19) 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-
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
(3) 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;’’.
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SEC. 131. AIRCRAFT EQUIPMENT AND VESSELS.
Section 1110(a)(1) of title 11, United States Code,
is amended—
(1) in subparagraph (A) by striking ‘‘that be-
come due on or after the date of the order’’;
(2) in subparagraph (B)—
(A) in clause (i) by striking ‘‘and’’ at the
end; and
(B) in clause (ii)—
(i) by inserting ‘‘and within such 60-
day period’’ after ‘‘order’’; and
(ii) in subclause (II) by striking the
period at the end and inserting ‘‘; and’’;
and
(3) by adding at the end the following:
‘‘(iii) that occurs after the date of the
order and such 60-day period is cured in ac-
cordance with the terms of such security agree-
ment, lease, or conditional sale contract.’’.
Subtitle D—Adequate Protections
for Unsecured Creditors
SEC. 141. DEBTS INCURRED TO PAY NONDISCHARGEABLE
DEBTS.
(a) PRIORITY OF CLAIMS FOR DEBTS INCURRED TO
PAY NONDISCHARGEABLE DEBTS.—Section 507(a) of
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title 11, United States Code, is amended by adding at the
end the following:
‘‘(10) Tenth, remaining allowed unsecured
claims for debts that are nondischargeable under
section 523(a)(19), but which shall be payable under
this paragraph in the higher order of priority (if
any) as the respective claims paid by incurring such
debts.’’.
(b) NONDISCHARGEABILITY OF DEBTS INCURRED TO
PAY NONDISCHARGEABLE DEBTS.—Section 523(a) 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
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(19) incurred to pay a debt that is non-
dischargeable by reason of any other provision of
this subsection or section 727, 1141, 1228(a),
1228(b), or 1328(b), except for any debt incurred to
pay such a nondischargeable debt in any case in
which—
‘‘(A)(i) the debtor who paid the non-
dischargeable debt is a single custodial parent
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who has 1 or more dependent children at the
time of the order for relief; or
‘‘(ii) there is an allowed claim for alimony
to, maintenance for, or support of a spouse,
former spouse, or child of the debtor payable
under a judicial or administrative order to such
spouse or child (but not to any other person)
which was unpaid as of the date of the petition;
and
‘‘(B) the creditor is unable to demonstrate
that the debtor intentionally incurred the debt
to pay the debt which is nondischargeable;’’.
SEC. 142. CREDIT EXTENSIONS ON THE EVE OF BANK-
RUPTCY PRESUMED NONDISCHARGEABLE.
Section 523(a)(2)(C) of title 11, United States Code,
is amended to read as follows:
‘‘(C) for purposes of subparagraph (A),
consumer debts owed to a single creditor, ex-
cluding debts incurred for necessaries that do
not exceed $250 in the aggregate, incurred by
an individual debtor on or within 90 days be-
fore the order for relief under this title are pre-
sumed to be nondischargeable.’’.
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SEC. 143. FRAUDULENT DEBTS ARE NONDISCHARGEABLE
IN CHAPTER 13 CASES.
Section 1328(a)(2) of title 11, United States Code,
is amended—
(1) by inserting ‘‘(2), (3)(B), (4),’’ after ‘‘para-
graph’’; and
(2) by inserting ‘‘(6),’’ after ‘‘(5),’’.
SEC. 144. APPLYING THE CODEBTOR STAY ONLY WHEN IT
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) When the debtor did not receive the consider-
ation for the claim held by a creditor, the stay provided
by subsection (a) does not apply to such creditor, notwith-
standing subsection (c), to the extent the creditor proceeds
against the individual which received such consideration
or against property not in the possession of the debtor
which secures such claim, but this subsection shall not
apply if the debtor is primarily obligated to pay the credi-
tor in whole or in part with respect to the claim under
a legally binding separation agreement, divorce decree, or
other order of a court of record, with respect to such indi-
vidual or the person who has possession of such property.
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‘‘(3) When the debtor’s plan provides that the debt-
or’s interest in personal property subject to a lease as to
which the debtor is the lessee will be surrendered or aban-
doned or no payments will be made under the plan on ac-
count of the debtor’s obligations under the lease, the stay
provided by subsection (a) shall terminate as of the date
of confirmation of the plan notwithstanding subsection
(c).’’.
SEC. 145. DEBTS FOR ALIMONY, MAINTENANCE, AND SUP-
PORT.
(a) 
NONDISCHARGEABILITY.—Title 
11, 
United
States Code, is amended—
(1) in section 523(a)(18)—
(A) by inserting ‘‘(including interest)’’
after ‘‘law’’; and
(B) in subparagraph (A) by striking ‘‘and’’
at the end and inserting ‘‘or’’; and
(2) in section 1328(a)(2) by striking ‘‘or (9)’’
and inserting ‘‘(9), or (18)’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, as amended by section 130, is amend-
ed—
(1) in paragraph (19) by striking ‘‘or’’ at the
end;
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(2) in paragraph (19) by striking the period at
the end and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(20) 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; or
‘‘(21) under subsection (a) with respect to the
withholding, suspension, or restriction of drivers’ li-
censes, professional and occupational licenses, and
recreational licenses pursuant to State law as speci-
fied in section 466(a)(15) of the Social Security Act
or with respect to the reporting of overdue support
owed by an absent parent to any consumer reporting
agency as specified in section 466(a)(7) of the Social
Security Act.’’.
(c) CONTINUED LIABILITY OF PROPERTY.—Section
522(c) of title 11, United States Code, is amended by
striking ‘‘section 523(a)(1) or 523(a)(5)’’ and inserting
‘‘paragraph (1), (5), or (18) of section 523(a)’’.
(d) PRIORITY OF CLAIMS.—Section 507(a) of title
11, United States Code, as amended by section 141, is
amended—
(1) in the matter preceding paragraph (1) by
inserting before the colon the following:
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‘‘, except that, notwithstanding any other provision of this
title, any expense or claim entitled to priority under para-
graph (3) shall have first priority over any other expense
or claim that has priority under any other provision of
this subsection’’;
(2) in paragraph (10) by striking ‘‘(10) Tenth’’
and inserting ‘‘(11) Eleventh’’;
(3) in paragraph (9) by striking ‘‘(9) Ninth’’
and inserting ‘‘(10) Tenth’’;
(4) in paragraph (8) by striking ‘‘(8) Eighth ’’
and inserting ‘‘(9) Ninth’’; and
(5) by inserting after paragraph (7) the follow-
ing:
‘‘(8) Eighth, allowed unsecured claims for debts
that 
are 
nondischargeable 
under 
section
523(a)(18).’’.
(e) CONTENTS OF PLANS.—Section 1322(b)(1) of
title 11, United States Code, is amended by striking the
semicolon at the end and inserting the following:
‘‘and provide for the payment of any claim entitled
to priority under section 507(a)(3) of this title be-
fore the payment of any other claim entitled to pri-
ority under section 507(a), notwithstanding the pri-
orities established under section 507(a);’’.
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(f) CONFIRMATION
OF PLANS.—Title 11 of the
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 to pay alimony to, maintenance
for, or support of a spouse, former spouse, or child
of the debtor, the debtor has paid all amounts pay-
able under such order for alimony, maintenance, or
support that are due after the date the petition is
filed.’’;
(2) in section 1225(a)—
(A) in paragraph (5) by striking ‘‘and’’ at
the end;
(B) in paragraph (6) by striking the period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(7) the debtor is required by a judicial or ad-
ministrative order to pay alimony to, maintenance
for, or support of a spouse, former spouse, or child
of the debtor, the debtor has paid all amounts pay-
able under such order for alimony, maintenance, or
support that are due after the date the petition is
filed.’’; and
(3) in section 1325(a)—
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(A) in paragraph (5) by striking ‘‘and’’ at
the end;
(B) in paragraph (6) by striking the period
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 to pay alimony to, maintenance
for, or support of a spouse, former spouse, or child
of the debtor, the debtor has paid all amounts pay-
able under such order for alimony, maintenance, or
support that are due after the date the petition is
filed.’’.
(g) DISCHARGE.—Title 11 United States Code is
amended—
(1) in section 1228(a) by inserting ‘‘and only
after a debtor who is required by a judicial or ad-
ministrative order to pay alimony to, maintenance
for, or support of a spouse, former spouse, or child
of the debtor, certifies that all amounts payable
under such order for alimony, maintenance, or sup-
port that are due after the date the petition is filed
have been paid,’’ after ‘‘this title,’’; and
(2) in section 1328(a) by inserting ‘‘and only
after a debtor who is required by a judicial or ad-
ministrative order to pay alimony to, maintenance
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for, or support of a spouse, former spouse, or child
of the debtor, certifies that all amounts payable
under such order for alimony, maintenance, or sup-
port that are due after the date the petition is filed
have been paid,’’ after ‘‘plan,’’ the 1st place it ap-
pears.
(h) CONFORMING AMENDMENTS.—Section 456(b) of
the Social Security Act (42 U.S.C. 656(b)) is amended—
(1) by inserting ‘‘, including interest,’’ after
‘‘Code)’’;
(2) by striking ‘‘and’’ and inserting ‘‘or’’; and
(3) by striking ‘‘released by a discharge’’ and
inserting ‘‘dischargeable’’.
SEC. 146. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR
ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523(a)(5) of title 11, United States Code, is
amended to read as follows:
‘‘(5) to a spouse, former spouse, or child of the
debtor for alimony to, maintenance for, or support
of such spouse or child, or to a spouse, former
spouse, or child of the debtor, to the extent such
debt is the result of a property settlement agree-
ment, a hold harmless agreement, or any other type
of debt that is not in the nature of alimony, mainte-
nance, or support in connection with or incurred by
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the debtor in the course of a separation agreement,
divorce decree, any modifications thereof, or other
order of a court of record, determination made in
accordance with State or territorial law by a govern-
mental unit, but not to the extent that such debt is
assigned to another entity, voluntarily, by operation
of law, or otherwise (other than debts assigned pur-
suant to section 408(a)(3) of the Social Security
Act, or such debt that has been assigned to the Fed-
eral government, or to a State or political subdivi-
sion of such State, or the creditor’s attorney);’’.
SEC. 147. OTHER EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, is
amended—
(1) by striking subsection (a)(15), as added by
section 304(e)(1) of Public Law 103–394;
(2) in subsection (a)(7) by inserting ‘‘an order
of disgorgement or restitution obtained by a govern-
mental unit,’’ after ‘‘such debt is for’’; and
(3) in subsection (c)(1) by striking ‘‘(6), or
(15)’’ and inserting ‘‘or (6)’’.
SEC. 148. FEES ARISING FROM CERTAIN OWNERSHIP IN-
TERESTS.
(a) EXCEPTION TO DISCHARGE.—Section 523(a)(16)
of title 11, United States Code, is amended—
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(1) by striking ‘‘dwelling’’ the 1st place it ap-
pears;
(2) by striking ‘‘ownership or’’ and inserting
‘‘ownership,’’;
(3) by striking ‘‘housing’’ the 1st 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,’’.
(b) EXECUTORY CONTRACTS.—Section 365 of title
11, United States Code, as amended by section 161, is
amended by adding at the end the following:
‘‘(q) A debt of a kind described in section 523(a)(16)
of this title shall not be considered to be a debt arising
from an executory contract.’’
SEC. 149. PROTECTION OF CHILD SUPPORT AND ALIMONY.
(a) AMENDMENT.—Title 11 of the United States
Code, as amended by section 116, is amended by inserting
after section 528 the following:
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‘‘§ 529. Protection of child support and alimony pay-
ments after discharge
‘‘Notwithstanding the provisions of the constitution
or law of any State providing a different priority, any
debts of the individual who has received a discharge under
this title to a spouse, former spouse, or child for alimony
to, maintenance for, or support of such spouse or child,
in connection with a separation agreement, divorce decree,
or other order of a court of record, determination made
in accordance with State or territorial law by a govern-
mental unit, or property settlement agreement, but not to
the extent that such debt—
‘‘(1) is assigned to another entity, voluntarily,
by operation of law, or otherwise; or
‘‘(2) includes a liability designated as alimony,
maintenance, or support, unless such liability is ac-
tually in the nature of alimony, maintenance, or sup-
port,
shall have priority in payment and collection over a credi-
tor’s claim which is not discharged in the individual’s case
pursuant to paragraph (2), (4), or (19) of section 523(a)
of this title, but such priority shall not affect the priority
of any consensual lien, mortgage, or security interest se-
curing such creditor’s claim except with respect to any
property of the debtor acquired after the date of the filing
of the petition. A creditor that receives a payment, or col-
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lects money or property, in satisfaction of all or part of
any debt excepted from discharge under paragraph (2),
(4), or (14) of section 523(a) of this title shall not later
than 20 days after receiving such payment or collecting
such money or property, distribute such payment, such
money, or such property ratably to individuals who then
hold debts entitled to priority under section 507(a)(3) of
this title. Not later than 2 years after receiving such pay-
ment or collecting such money or property, such creditor
shall make the distribution required by this section to all
individuals whose identity is known to such creditor at the
time of distribution.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions of chapter 5 of title 11, United States Code, as
amended by section 116, is amended by inserting after the
item relating to section 528 the following:
‘‘529. Protection of child support and alimony payments after discharge.’’.
SEC. 150. ADEQUATE PROTECTION FOR INVESTORS.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (48)
the following:
‘‘(48A) ‘securities self regulatory organization’
means either a securities association registered with
the Securities and Exchange Commission pursuant
to section 15A of the Securities Exchange Act of
1934 or a national securities exchange registered
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with the Securities and Exchange Commission pur-
suant to section 6 of the Securities Exchange Act of
1934;’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, as amended by sections 130 and 146,
is amended—
(1) in paragraph (20) by striking ‘‘or’’ at the
end;
(2) in paragraph (21) by striking the period at
the end and a inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(22) under subsection (a) of this section, of
the commencement or continuation of an investiga-
tion or action by a securities self regulatory organi-
zation to enforce such organization’s regulatory
power; of the enforcement of an order or decision,
other than for monetary sanctions, obtained in an
action by the securities self regulatory organization
to enforce such organization’s regulatory power; or
of any act taken by the securities self regulatory or-
ganization to delist, delete, or refuse to permit
quotation of any stock that does not meet applicable
regulatory requirements.’’.
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SEC. 151. HIGHER PRIORITY FOR DEBTS FOR ALIMONY,
MAINTENANCE, AND SUPPORT.
Section 507(a) of title 11, United States Code, is
amended—
(1) by striking paragraph (7);
(2) in paragraph (6) by striking ‘‘(6) Sixth’’
and inserting ‘‘(7) Seventh’’;
(3) in paragraph (5) by striking ‘‘(5) Fifth’’
and inserting ‘‘(6) Sixth’’;
(4) in paragraph (4) by striking ‘‘(4) Fourth’’
and inserting ‘‘(5) Fifth’’;
(5) in paragraph (3) by striking ‘‘(3) Third’’
and inserting ‘‘(4) Fourth’’; and
(6) by inserting after paragraph (2) the follow-
ing:
‘‘(3) Third, allowed claims for debts to a
spouse, former spouse, or child of the debtor for ali-
mony to, maintenance for, or support of such spouse
or child, in connection with a separation agreement,
divorce decree or other order of a court of record,
determination made in accordance with State or ter-
ritorial law by a governmental unit, or property set-
tlement agreement, but not to the extent that such
debt—
‘‘(A) is assigned to another entity, volun-
tarily, by operation of law, or otherwise; or
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‘‘(B) includes a liability designed as ali-
mony, maintenance, or support, unless such li-
ability is actually in the nature of alimony,
maintenance, or support.’’.
Subtitle E—Adequate Protections
for Lessors
SEC. 161. GIVING DEBTORS THE ABILITY TO KEEP LEASED
PERSONAL 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
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 condition such assumption on cure of any outstanding
default on terms set by the lessor. If within 30 days of
such notice 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
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under section 362 of this title and the injunction under
section 524(a)(2) of this title shall not be violated by noti-
fication of the debtor and negotiation of cure under this
subsection.
‘‘(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
and any stay under section 1301 is automatically termi-
nated with respect to the property subject to the lease.’’.
SEC. 162. ADEQUATE PROTECTION OF LESSORS AND PUR-
CHASE MONEY SECURED CREDITORS.
Title 11, United States Code, is amended by adding
after section 1307 the following:
‘‘§ 1307A. Adequate protection in chapter 13 cases
‘‘(a)(1) On or before 30 days after the filing of a case
under this chapter, the debtor shall make cash payments
in the amount described below to any lessor of personal
property and to any creditor holding a claim secured by
personal property to the extent such claim is attributable
to the purchase of such property by the debtor. The debtor
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or the plan shall continue such payments until the earlier
of—
‘‘(A) the time at which the creditor begins to
receive actual payments under the plan; or
‘‘(B) the debtor relinquishes possession of such
property to the lessor or creditor, or to any third
party acting under claim of right, as applicable.
‘‘(2) Such cash payments shall be in the amount of
any weekly, biweekly, monthly or other periodic payment
scheduled as payable under the contract between the debt-
or and creditor; shall be paid at the times at which such
payments are scheduled to be made; and shall not include
any arrearages, penalties, or default or delinquency
charges. Such payments shall be deemed to be adequate
protection payments under section 362 of this title.
‘‘(b) The court may, after notice and hearing, change
the amount and timing of the adequate protection pay-
ment under subsection (a), but in no event shall it be pay-
able less frequently than monthly or in an amount less
than the reasonable depreciation of such property month
to month.
‘‘(c) Notwithstanding section 1326(b) of this title, if
a confirmed plan provides for payments to a creditor or
lessor described in subsection (a) and provides that pay-
ments to such creditor or lessor under the plan will be
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deferred until payment of amounts described in section
1326(b) of this title, the payments required hereunder
shall nonetheless be continued in addition to plan pay-
ments until actual payments to the creditor begin under
the plan.
‘‘(d) Notwithstanding sections 362, 542, and 543 of
this title, a lessor or creditor described in subsection (a)
may retain possession of property described in subsection
(a) which was obtained rightfully prior to the date of filing
of the petition until the first such adequate protection pay-
ment is received by the lessor or creditor. Such retention
of possession and any acts reasonably related thereto shall
not violate the stay imposed under section 362(a) of this
title, nor any obligations imposed under section 542 or
543 of this title.
‘‘(e) On or before 60 days after the filing 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 that
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.’’.
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SEC. 163. ADEQUATE PROTECTION FOR LESSORS.
Section 362(b)(10) of title 11, United States Code,
is amended by striking ‘‘nonresidential’’.
Subtitle F—Bankruptcy Relief Less
Frequently Available for Repeat
Filers
SEC. 171. EXTEND PERIOD BETWEEN BANKRUPTCY DIS-
CHARGES.
Title 11, United States Code, is amended—
(1) in section 727(a)(8) by striking ‘‘six’’ and
inserting ‘‘10’’; 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.’’.
Subtitle G—Exemptions
SEC. 181. EXEMPTIONS.
Section 522(b)(2)(A) of title 11, United States Code,
is amended—
(1) by striking ‘‘180’’ and inserting ‘‘365’’; and
(2) by striking ‘‘, or for a longer portion of
such 180-day period than in any other place’’.
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SEC. 182. LIMITATION.
Section 522 of title 11, United States Code, is
amended—
(1) in subsection (b)(2)(A) by inserting ‘‘sub-
ject to subsection (n),’’ before ‘‘any property’’; and
(2) by adding at the end the following:
‘‘(n) For purposes of subsection (b)(2)(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;
‘‘(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 365-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.’’.
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TITLE II—BUSINESS
BANKRUPTCY PROVISIONS
Subtitle A—General Provisions
SEC. 201. LIMITATION RELATING TO THE USE OF FEE
EXAMINERS.
Section 330 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) A person appointed to examine a request for
compensation or reimbursement payable under this section
may not be paid on the basis of the amount of any reduc-
tion recommended by such person in the amount or rate
of such compensation or such reimbursement.’’.
SEC. 202. 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
accordance with non-Federal law regulating attorney re-
ferral services and with rules of professional responsibility
applicable to attorney acceptance of referrals.’’.
SEC. 203. CHAPTER 12 MADE PERMANENT LAW.
Section 302(f) of the Bankruptcy Judges, United
States Trustees, and Family Farmer Bankruptcy Act of
1986 (11 U.S.C. 1201 note) is repealed.
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SEC. 204. 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-
rity holders if the debtor has filed a plan as to which the
debtor solicited acceptances prior to the commencement
of the case.’’.
SEC. 205. CREDITORS’ AND EQUITY SECURITY HOLDERS’
COMMITTEES.
Section 1102(b) of title 11, United States Code, is
amended by adding at the end the following:
‘‘(3)(A) The court on its own motion or, subject to
subparagraph (B), on request of a party in interest, and
after notice and a hearing, may order a change in member-
ship of a committee appointed under subsection (a) if nec-
essary to ensure adequate representation of creditors or
of equity security holders.
‘‘(B) A request to change the membership of a com-
mittee appointed under subsection (a) may be made under
subparagraph (A) by a party in interest only after such
request is submitted to and denied by the United States
trustee.’’.
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SEC. 206. 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. 207. 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;’’;
(2) in paragraph (7) by striking ‘‘or’’ at the
end;
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(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 $5000.’’.
SEC. 208. 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. 209. 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. 210. PERIOD FOR FILING PLAN UNDER CHAPTER 12.
(a) EXTENSION OF PERIOD.—Section 1221 of title
11, United States Code, is amended by inserting ‘‘to any
period not later than 150 days after the order for relief’’
after ‘‘period’’.
(b) RELIEF FROM THE STAY.—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
property under subsection (a) of a debtor in a case
under chapter 12, by a creditor whose claim is se-
cured by an interest in such property, unless the
debtor has filed a plan in accordance with section
1221.’’.
(c) SPECIAL TREATMENT OF SECURED CLAIMS.—(1)
Chapter 12 of title 11, United States Code, is amended
by inserting after section 1231 the following:
‘‘§ 1232. Special treatment of secured claims
‘‘(a)(1) A claim secured by a lien on property of the
estate shall be allowed or disallowed under section 502 of
this title the same as if the holder of such claim had re-
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course against the debtor on account of such claim, wheth-
er or not such holder has such recourse, unless—
‘‘(A) subject to paragraph (2), the holder of
such claim elects to apply subsection (b); or
‘‘(B) such holder does not have such recourse,
and such property is sold under section 363 of this
title or is to be sold under the plan.
‘‘(2) A holder of a claim may not elect to apply sub-
section (b) if—
‘‘(A) such claim is of inconsequential value; or
‘‘(B) the holder of a claim has recourse against
the debtor on account of such claim, and such prop-
erty is sold under section 363 of this title or is to
be sold under the plan.
‘‘(b) If such an election is made to apply this sub-
section, then notwithstanding section 506(a) of this title,
such claim is a secured claim to the extent such claim is
allowed.’’.
(2) The table of sections of chapter 12 of title 11,
United States Code, is amended by inserting after the
item relating to section 1231 the following:
‘‘1232. Special treatment of secured claims.’’.
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SEC. 211. CASES ANCILLARY TO FOREIGN PROCEEDINGS
INVOLVING FOREIGN INSURANCE COMPA-
NIES THAT ARE ENGAGED IN THE BUSINESS
OF INSURANCE OR REINSURANCE IN THE
UNITED STATES.
Section 304 of title 11, United States Code, is
amended—
(1) in subsection (b) by striking ‘‘provisions of
subsection (c)’’ and inserting ‘‘subsections (c) and
(d)’’; and
(2) by adding at the end the following:
‘‘(d) The court may not grant to a foreign representa-
tive of the estate of an insurance company that is not or-
ganized under the law of a State and that is engaged in
the business of insurance, or reinsurance, in the United
States relief under subsection (b) with respect to property
that is—
‘‘(1) a deposit required by a State law relating
to insurance or reinsurance;
‘‘(2) a multibeneficiary trust required by a
State law relating to insurance or reinsurance to
protect holders of insurance policies issued in the
United States or to protect holders or claimants
against such policies; or
‘‘(3) a multibeneficiary trust authorized by a
State law relating to insurance or reinsurance to
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allow a person engaged in the business of insurance
in the United States—
‘‘(A) to cede reinsurance to such an insur-
ance company; and
‘‘(B) to treat so ceded reinsurance as an
asset, or deduction from liability, in financial
statements of such person.’’.
SEC. 212. REJECTION OF EXECUTORY CONTRACTS AFFECT-
ING INTELLECTUAL PROPERTY RIGHTS TO
RECORDINGS OF ARTISTIC PERFORMANCE.
Section 365(n) of title 11, United States Code, is
amended at the end the following:
‘‘(5) Where the court finds that a personal serv-
ices contract is property of the estate, the trustee
may not reject an executory contract for personal
services in which advances are paid for the creation
of copyrighted sound recordings in the future if a
material purpose for commencing a case under this
title is to reject such contract, unless, absent such
rejection, economic rehabilitation of the debtor’s fi-
nances, 
including 
such 
contract, 
cannot 
be
achieved.’’.
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SEC. 213. UNEXPIRED LEASES OF NONRESIDENTIAL REAL
PROPERTY.
Section 365(d)(4) of title 11, United States Code, is
amended to read as follows:
‘‘(4) In a case under any chapter of this title, if the
trustee does not assume or reject an unexpired lease of
nonresidential real property under which the debtor is the
lessee before the earlier of (A) 120 days after the date
of the order for relief, or (B) the entry of an order con-
firming a plan, then such lease is deemed rejected, and
the trustee shall immediately surrender such nonresiden-
tial real property to the lessor but in no event shall such
time period exceed 120 days. Notwithstanding the imme-
diately preceding sentence, and provided no plan has been
confirmed, upon motion of the trustee, and after notice
and a hearing, the court may within such 120-day period
extend the 120-day period by a period not to exceed 150
days, contingent upon written consent of the affected les-
sor or with the approval of the court, and provided the
trustee has timely performed all post-petition lease obliga-
tions, but in no circumstance shall such period extend be-
yond the earlier of (i) 270 days from the date of the order
for relief or (ii) the entry of an order approving a disclo-
sure statement, without the consent of the lessor.’’.
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SEC. 214. 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—
‘‘(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. 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 follow-
ing:
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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 perform-
ing 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, 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
(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
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a failure to perform nonmonetary obligations under
an executory contract 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.
(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec-
tion 1124(2) of title 11, United States Code, is amend-
ed—
(1) in subparagraph (A) by inserting ‘‘or of a
kind that section 365(b)(1)(A) of this title expressly
does not require to be cured’’ before the semicolon
at the end;
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(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’’.
Subtitle B—Specific Provisions
CHAPTER 1—SMALL BUSINESS
BANKRUPTCY
SEC. 231. DEFINITIONS.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended by striking paragraph (51C) and
inserting the following:
‘‘(51C) ‘small business case’ means a case filed
under chapter 11 of this title in which the debtor is
a small business debtor;
‘‘(51D) ‘small business debtor’ means—
‘‘(A) a person (including affiliates of such
person that are also debtors under this title)
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that has aggregate noncontingent, liquidated se-
cured and unsecured debts as of the date of the
petition or the order for relief in an amount not
more than $5,000,000 (excluding debts owed to
1 or more affiliates or insiders); or
‘‘(B) a debtor of the kind described in
paragraph (51B) but without regard to the
amount of such debtor’s debts,
except that if a group of affiliated debtors has ag-
gregate noncontingent liquidated secured and unse-
cured debts greater than $5,000,000 (excluding debt
owed to 1 or more affiliates or insiders), then no
member 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. 232. FLEXIBLE RULES FOR DISCLOSURE STATEMENT
AND PLAN.
Section 1125(f) of title 11, United States Code, is
amended to read as follows:
‘‘(f) Notwithstanding subsection (b), in a small busi-
ness case—
‘‘(1) in determining whether a disclosure state-
ment provides adequate information, the court shall
consider the complexity of the case, the benefit of
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additional information to creditors and other parties
in interest, and the cost of providing additional in-
formation;
‘‘(2) the court may determine that the plan
itself provides adequate information and that a sepa-
rate disclosure statement is not necessary;
‘‘(3) 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; and
‘‘(4)(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.’’.
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SEC. 233. 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
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 or bankruptcy administrator,
creditors, and other parties in interest for reason-
ably complete information; and
(2) economy and simplicity for debtors.
SEC. 234. UNIFORM NATIONAL REPORTING REQUIRE-
MENTS.
(a) REPORTING REQUIRED.—(1) Title 11 of the
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-
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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;
‘‘(4) whether the debtor is—
‘‘(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.’’.
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(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).
SEC. 235. 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 contain-
ing 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—
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(1) the reasonable needs of the bankruptcy
court, the United States trustee or bankruptcy ad-
ministrator, creditors, and other parties in interest
for reasonably complete information;
(2) the 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 the small business debtor to understand
its financial condition and plan its future.
SEC. 236. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES IN CHAPTER 11 CASES.—Title 11 of the
United States Code is amended by inserting after section
1114 the following:
‘‘§ 1115. 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—
‘‘(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
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‘‘(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 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), maintain in-
surance customary and appropriate to the industry;
‘‘(6)(A) timely file tax returns;
‘‘(B) subject to section 363(c)(2), timely pay all
administrative expense tax claims, except those
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being contested by appropriate proceedings being
diligently prosecuted; and
‘‘(C) subject to section 363(c)(2), establish 1 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 thereof, all taxes
payable for periods beginning after the date the case
is commenced that are collected or withheld by the
debtor for governmental units; and
‘‘(7) allow the United States trustee or bank-
ruptcy administrator, or its designated representa-
tive, to inspect the debtor’s business premises,
books, and records at reasonable times, after reason-
able 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. 237. 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—
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‘‘(1) only the debtor may file a plan until after
90 days after the date of the order for relief, unless
shortened on request of a party in interest made
during the 90-day period, or unless extended as pro-
vided by this subsection, after notice and hearing the
court, for cause, orders otherwise;
‘‘(2) the plan, and any necessary disclosure
statement, shall be filed not later than 90 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)
of this title, within which the plan shall be confirmed
may be extended 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 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.’’.
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SEC. 238. 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 plan shall be con-
firmed not later than 150 days after the date of the order
for relief unless such 150-day period is extended as pro-
vided in section 1121(e)(3) of this title.’’.
SEC. 239. 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. 240. DUTIES OF THE UNITED STATES TRUSTEE AND
BANKRUPTCY ADMINISTRATOR.
(a) DUTIES OF THE UNITED STATES TRUSTEE.—
Section 586(a) of title 28, United States Code, as amend-
ed by section 111, is amended—
(1) in paragraph (3)—
(A) in subparagraph (G) by striking ‘‘and’’
at the end;
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(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;’’;
(2) in paragraph (6) by striking ‘‘and’’ at the
end;
(3) in paragraph (7) by striking the period at
the end and inserting ‘‘; and’’; and
(4) by inserting after paragraph (7) the follow-
ing:
‘‘(8) 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
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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
‘‘(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
‘‘(9) 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.’’.
(b) DUTIES
OF
THE
BANKRUPTCY
ADMINIS-
TRATOR.—In a small business case (as defined in section
101 of title 11 of the United States Code), the bankruptcy
administrator shall perform the duties specified in section
586(a)(6) of title 28 of the United States Code.
SEC. 241. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is
amended—
(1) in the matter preceding paragraph (1) by
striking ‘‘, may’’;
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(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. 242. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is
amended—
(1) in subsection (i) as so redesignated by sec-
tion 124—
(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 (i), as redesig-
nated by section 124, the following:
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‘‘(j) The filing of a petition under chapter 11 of this
title operates as a stay of the acts described in subsection
(a) only in an involuntary case involving no collusion by
the debtor with creditors and in which the debtor—
‘‘(1) is a debtor in a small business case pend-
ing at the time the petition is filed;
‘‘(2) was a debtor in a small business case
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;
‘‘(3) 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
‘‘(4) is an entity that has succeeded to substan-
tially all of the assets or business of a small business
debtor described in subparagraph (A), (B), or (C);
unless the debtor proves, by a preponderance of the
evidence, that the filing of such petition resulted
from circumstances beyond the control of the debtor
not foreseeable at the time the case then pending
was filed; and that it is more likely than not that
the court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable time.’’.
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SEC. 243. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE.
(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 paragraph (2), in sub-
section (c), and in section 1104(a)(3) of this title, on re-
quest of a party in interest, and after notice and a hear-
ing, 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, whichever is in the best interest of creditors
and the estate, if the movant establishes cause.
‘‘(2) The relief provided in paragraph (1) shall not
be granted if the debtor or another party in interest ob-
jects and establishes, by a preponderance 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 reason is an act or omission of the
debtor that—
‘‘(i) there exists a reasonable justification
for the act or omission; and
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‘‘(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
compelling circumstances beyond the control of
the debtor justify an extension.
‘‘(3) For purposes of this subsection, cause in-
cludes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate;
‘‘(B) gross mismanagement of the estate;
‘‘(C) failure to maintain appropriate insurance;
‘‘(D) unauthorized use of cash collateral harm-
ful to 1 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 or an ex-
amination ordered under rule 2004 of the Federal
Rules of Bankruptcy Procedure;
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‘‘(H) failure timely to provide information or
attend meetings reasonably requested by the United
States trustee;
‘‘(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;
‘‘(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 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 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.—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 of this title, but the court
determines that the appointment of a trustee is in
the best interests of creditors and the estate.’’.
SEC. 244. STUDY OF OPERATION OF TITLE 11 OF THE
UNITED STATES CODE WITH RESPECT TO
SMALL BUSINESSES.
Not later than 2 years after the date of the enact-
ment of this Act, 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—
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(A) the internal and external factors that
cause small businesses to become debtors in
cases under title 11 of the United States Code
and that cause certain small businesses to suc-
cessfully complete cases under chapter 11 of
such title; and
(B) how Federal laws relating to bank-
ruptcy can be made more effective and efficient
in assisting small businesses to remain viable;
and
(2) submit to the Speaker of the House of Rep-
resentatives and the President pro tempore of the
Senate a report summarizing such study.
CHAPTER 2—SINGLE ASSET REAL ESTATE
SEC. 251. SINGLE ASSET REAL ESTATE DEFINED.
Section 101(51B) of title 11, United States Code, is
amended to read as follows:
‘‘(51B) ‘single asset real estate’ means undevel-
oped real property or other real property constitut-
ing a single property or project, other than residen-
tial real property with fewer than 4 residential units,
on which is located a single development or project
which property or project generates substantially all
of the gross income of a debtor and on which no
substantial business is being conducted by a debtor,
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or by a commonly controlled group of entities all of
which are concurrently debtors in a case under chap-
ter 11 of this title, other than the business of oper-
ating the real property and activities incidental
thereto;’’.
SEC. 252. 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
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
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contract rate of interest on the value of the
creditor’s interest in the real estate; or’’.
TITLE III—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 301. PETITION AND PROCEEDINGS RELATED TO
PETITION.
(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.’’.
SEC. 
302. 
APPLICABILITY 
OF 
OTHER 
SECTIONS 
TO
CHAPTER 9.
Section 901 of title 11, United States Code, is
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and
(2) by inserting ‘‘559, 560,’’ after ‘‘557,’’.
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TITLE IV—BANKRUPTCY
ADMINISTRATION
Subtitle A—General Provisions
SEC. 401. ADEQUATE PREPARATION TIME FOR CREDITORS
BEFORE THE MEETING OF CREDITORS IN IN-
DIVIDUAL CASES.
Section 341(a) of title 11, United States Code, is
amended by inserting after the first sentence the follow-
ing: ‘‘If the debtor is an individual in a voluntary case
under chapter 7, 11, or 13, the meeting of creditors shall
not be convened earlier than 60 days (or later than 90
days) after the date of the order for relief, unless the
court, after notice and hearing, determines unusual cir-
cumstances justify an earlier meeting.’’.
SEC. 402. 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 follow-
ing: ‘‘Notwithstanding any local court rule, provision of
a State constitution, any other State or Federal nonbank-
ruptcy law, or other requirement that representation at
the meeting of creditors under subsection (a) be by an at-
torney, a creditor holding a consumer debt or its rep-
resentatives (which representatives may include an entity
or an employee of an entity and may be a representative
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for more than 1 creditor) shall be permitted to appear at
and participate in the meeting of creditors in a case under
chapter 7 or 13 either alone or in conjunction with an
attorney for the creditor. Nothing in this subsection shall
be construed to require any creditor to be represented by
an attorney at any meeting of creditors.’’.
SEC. 403. FILING PROOFS OF CLAIM.
Section 501 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) In a case under chapter 7 or 13, a proof of claim
or interest is deemed filed under this section for any claim
or interest that appears in the schedules filed under sec-
tion 521(a)(1) of this title, except a claim or interest that
is scheduled as disputed, contingent, or unliquidated.’’.
SEC. 404. AUDIT PROCEDURES.
(a) AMENDMENT.—Section 586 of title 28, United
States Code, as amended by sections 111 and 240, is
amended—
(1) by amending subsection (a)(6) to read as
follows:
‘‘(6) make such reports as the Attorney General
directs, including the results of audits performed
under subsection (f),’’;
(2) by inserting at the end the following:
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‘‘(f)(1) The Attorney General shall establish proce-
dures for the auditing of the accuracy and completeness
of petitions, schedules, and other information which the
debtor is required to provide under sections 521 and 1322,
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 accepted auditing
standards and performed by independent certified public
accountants or independent licensed public accountants.
Such procedures shall—
‘‘(A) establish a method of selecting appropriate
qualified persons to contract with the United States
trustee to perform such audits;
‘‘(B) establish a method of randomly selecting
cases to be audited according to generally accepted
audit standards, provided that no less than 1 out of
every 100 cases in each Federal judicial district shall
be selected for audit;
‘‘(C) require audits for schedules of income and
expenses which reflect higher than average variances
from the statistical norm of the district in which the
schedules were filed;
‘‘(D) establish procedures for reporting the re-
sults of such audits and any material misstatement
of income, expenditures or assets of a debtor to the
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Attorney General, the United States Attorney and
the court, as appropriate, and for providing public
information no less than annually on the aggregate
results of such audits including the percentage of
cases, by district, in which a material misstatement
of income or expenditures is reported; and
‘‘(E) establish procedures for fully funding such
audits.
‘‘(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) of this
subsection.
‘‘(3) According to procedures established under para-
graph (1), upon request of a duly appointed auditor, the
debtor shall cause the accounts, papers, documents, finan-
cial records, files and all other papers, things or property
belonging to the debtor as the auditor requests and which
are reasonably necessary to facilitate an audit to be made
available for inspection and copying.
‘‘(4) The report of each such audit shall be filed with
the court, the Attorney General, and the United States
Attorney, as required under procedures established by the
Attorney General under paragraph (1). If a material
misstatement of income or expenditures or of assets is re-
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ported, a statement specifying such misstatement shall be
filed with the court and the United States trustee shall
give notice thereof to the creditors in the case and, in an
appropriate case, in the opinion of the United States trust-
ee, requires investigation with respect to possible criminal
violations, the United States Attorney for the district.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
the enactment of this Act.
SEC. 405. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7
AND 13 CASES.
Section 342 of title 11, United States Code, is
amended—
(1) in subsection (c)—
(A) by striking ‘‘, but the failure of such
notice to contain such information shall not in-
validate the legal effect of such notice’’; and
(B) by adding the following at the end:
‘‘If the credit agreement between the debtor and the credi-
tor or the last communication before the filing of the peti-
tion in a voluntary case from the creditor to a debtor who
is an individual states an account number of the debtor
which is the current account number of the debtor with
respect to any debt held by the creditor against the debtor,
the debtor shall include such account number in any notice
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to the creditor required to be given under this title. If the
creditor has specified to the debtor an address at which
the creditor wishes to receive correspondence regarding
the debtor’s account, any notice to the creditor required
to be given by the debtor under this title shall be given
at such address. For the purposes of this section, ‘notice’
shall include, but shall not be limited to, any correspond-
ence from the debtor to the creditor after the commence-
ment of the case, any statement of the debtor’s intention
under section 521(a)(2) of this title, notice of the com-
mencement of any proceeding in the case to which the
creditor is a party, and any notice of the hearing under
section 1324.’’;
(2) by adding at the end the following:
‘‘(d) At any time, a creditor in a case of an individual
debtor under chapter 7 or 13 may file with the court and
serve on the debtor a notice of the address to be used to
notify the creditor in that case. Five days after receipt
of such notice, if the court or the debtor is required to
give the creditor notice, such notice shall be given at that
address.
‘‘(e) An entity may file with the court a notice stating
its address for notice in cases under chapters 7 and 13.
After 30 days following the filing of such notice, any notice
in any case filed under chapter 7 or 13 given by the court
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shall be to that address unless specific notice is given
under subsection (d) with respect to a particular case.
‘‘(f) Notice given to a creditor other than as provided
in this section shall not be effective notice until it has been
brought to the attention of the creditor. If the creditor
has designated a person or department to be responsible
for receiving notices concerning bankruptcy cases and has
established reasonable procedures so that bankruptcy no-
tices received by the creditor will be delivered to such de-
partment or person, notice will not be brought to the at-
tention of the creditor until received by such person or
department. No sanction under section 362(h) of this title
or any other sanction which a court may impose on ac-
count of violations of the stay under section 362(a) of this
title or failure to comply with section 542 or 543 of this
title may be imposed on any action of the creditor unless
the action takes place after the creditor has received notice
of the commencement of the case effective under this sec-
tion.’’.
SEC. 406. DEBTOR TO PROVIDE TAX RETURNS AND OTHER
INFORMATION.
Section 521 of title 11, United States Code, is
amended—
(1) by inserting ‘‘(a)’’ before ‘‘The’’;
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(2) by amending paragraph (1) to read as fol-
lows:
‘‘(1) file—
‘‘(A) a list of creditors, and
‘‘(B) unless the court orders otherwise—
‘‘(i) a schedule of assets and liabil-
ities;
‘‘(ii) a schedule of current income and
current expenditures;
‘‘(iii) a statement of the debtor’s fi-
nancial affairs;
‘‘(iv) copies of all payment advices or
other evidence of payment, if any, received
by the debtor from any employer of the
debtor in the period 60 days prior to the
filing of the petition;
‘‘(v) a statement of the amount of
projected monthly net income, itemized to
show how calculated;
‘‘(vi) if applicable, any statement
under paragraphs (3) and (4) of section
109(h);
‘‘(vii) a statement disclosing any rea-
sonably anticipated increase in income or
expenditures over the next 12 months; and
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‘‘(viii) a certificate, if applicable—
‘‘(I) of an attorney whose name
is on the petition as the attorney for
the debtor, or of any bankruptcy peti-
tion preparer who signed the petition
pursuant to section 110(b)(1) of this
title, indicating that such attorney or
bankruptcy petition preparer delivered
to the debtor any notice required by
section 342(b)(1) of this title; or
‘‘(II) if no attorney for the debt-
or is indicated and no bankruptcy pe-
tition preparer signed the petition of
the debtor, that such notice was ob-
tained and read by the debtor;’’; and
(3) by adding at the end the following:
‘‘(b) At any time, a creditor in a case of an individual
debtor under chapter 7 or 13 may file with the court and
serve on the debtor notice that the creditor requests the
petition, schedules, and statement of financial affairs filed
by the debtor in the case. At any time, a creditor in a
case under chapter 13 of this title may file with the court
and serve on the debtor notice that the creditor requests
the plan filed by the debtor in the case. Within 10 days
of the first such request in a case under this subsection
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for the petition, schedules, and statement of financial af-
fairs and the first such request for the plan under this
subsection, the debtor shall serve on that creditor a con-
formed copy of the requested documents or plan and any
amendments thereto as of that date, and shall thereafter
promptly serve on that creditor at the time filed with the
court—
‘‘(1) any requested document or plan which is
not filed with the court at the time requested; and
‘‘(2) any amendment to any requested docu-
ment or plan.
‘‘(c)(1) An individual debtor in a case under chapter
7 or 13 shall provide to the United States trustee—
‘‘(A) copies of all Federal tax returns (including
any schedules and attachments) filed by the debtor
for the 3 most recent tax years preceding the order
for relief;
‘‘(B) at the time the debtor files them with the
Commissioner of Internal Revenue, all Federal tax
returns (including any schedules and attachments)
for the debtor’s tax years ending while such case is
pending; and
‘‘(C) at the time the debtor files them with the
Commissioner of Internal Revenue, all amendments
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to the tax returns (including schedules and attach-
ments) described in subparagraphs (A) and (B).
‘‘(2)(A) The United States trustee shall make such
Federal tax returns (including schedules, attachments,
and amendments) available to any party in interest for
inspection and copying not later than 10 days after receiv-
ing a request by such party.
‘‘(B) If the United States trustee does not comply
with subparagraph (A), on the motion of such party, the
court shall issue an order compelling the United States
trustee to comply with subparagraph (A).
‘‘(d) A debtor in a case under chapter 13 of this title
shall file, from a time which is the later of 90 days after
the close of the debtor’s tax year or 1 year after the order
for relief unless a plan has then been confirmed, and
thereafter on or before 45 days before each anniversary
of the confirmation of the plan until the case is closed,
a statement subject to the penalties of perjury by the debt-
or of the debtor’s income and expenditures in the preced-
ing tax year and monthly net income, showing how cal-
culated. Such statement shall disclose the amount and
sources of income of the debtor, the identity of any per-
sons responsible with the debtor for the support of any
dependents of the debtor, and any persons who contrib-
uted and the amount contributed to the household in
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which the debtor resides. Such tax returns, amendments
and statement of income and expenditures shall be avail-
able to the United States trustee, any bankruptcy admin-
istrator, any trustee and any party in interest for inspec-
tion and copying.’’.
SEC. 407. DISMISSAL FOR FAILURE TO FILE SCHEDULES
TIMELY OR PROVIDE REQUIRED INFORMA-
TION.
Section 521 of title 11, United States Code, as
amended by section 406, is amended by adding at the end
the following:
‘‘(e) Notwithstanding section 707(a) of this title, if
an individual debtor in a voluntary case under chapter 7
or 13 fails to provide all of the information required under
subsections (a)(1) and (c)(1)(A) within 45 days after the
filing of the petition, the case shall be automatically dis-
missed effective on the 46th day after the filing of the
petition without the need for any order of court, but any
party in interest may request the court to enter an order
dismissing the case and the court shall, if so requested,
enter an order of dismissal within 5 days of such request.
Upon request of the debtor made within 45 days after the
filing of the petition, the court may allow the debtor up
to an additional 15 days to provide the information re-
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quired under subsections (a)(1) and (c)(1)(A) if the court
finds compelling justification for doing so.
‘‘(f) If an individual debtor in a case under chapter
7 or 13 fails to perform any of the duties imposed by sub-
sections (b), (c)(1)(B), (c)(1)(C), and (d), any party in
interest may request that the court order the debtor to
comply. Within 10 days of such request the court shall
order that the debtor do so within a period of time set
by the court no longer than 30 days. If the debtor does
not comply with that order within the period of time set
by the court, the court shall, on request of any party in
interest certifying that the debtor has not so complied,
enter an order dismissing the case within 5 days of such
request.’’.
SEC. 408. ADEQUATE TIME TO PREPARE FOR HEARING ON
CONFIRMATION OF THE PLAN.
Section 1324 of title 11, United States Code, is
amended—
(1) by striking ‘‘After’’ and inserting the follow-
ing:
‘‘(a) Except as provided in subsection (b) and after’’;
and
(2) by adding at the end the following:
‘‘(b) The hearing on confirmation of the plan may
be held not earlier than 20 days, and not later than 45
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days, after the meeting of creditors under section 341(a)
of this title.’’.
SEC. 409. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION
IN CERTAIN CASES.
Title 11, United States Code, is amended—
(1) by amending section 1322(d) to read as fol-
lows:
‘‘(d) If the current monthly total income of the debtor
and in a joint case, the debtor and the debtor’s spouse
combined, 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 1 person, not less than
the national median household income for 1 earner, the
plan may not provide for payments over a period that is
longer than 5 years, unless the court, for cause, approves
a longer period, but the court may not approve a period
that exceeds 7 years. If the current monthly total income
of the debtor or in a joint case, the debtor and the debtor’s
spouse combined, 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 less than the
national median household income for 1 earner, the plan
may not provide for payments over a period that is longer
than 3 years, unless the court, for cause, approves a longer
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period, but the court may not approve a period that is
longer than 5 years.’’;
(2) in section 1329—
(A) by striking in subsection (c) ‘‘three
years’’ and inserting ‘‘the applicable commit-
ment period under section 1325(b)(1)(B)(ii)’’
and by striking ‘‘five years’’ and inserting
‘‘maximum duration period’’; and
(B) by inserting at the end of subsection
(c) the following:
‘‘The maximum duration period shall be 5 years if the cur-
rent monthly total income of the debtor, and in a joint
case, the debtor and the debtor’s spouse combined, is 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, not less than the national me-
dian household income for 1 earner, as of the date of the
modification and shall be 3 years if the current monthly
total income is less than the highest national median fam-
ily income reported for a family of equal or lesser size or,
in the case of a household of 1 person, less than the na-
tional median household income for 1 earner as of the date
of the modification.’’.
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SEC. 410. SENSE OF THE CONGRESS REGARDING EXPAN-
SION OF RULE 9011 OF THE FEDERAL RULES
OF BANKRUPTCY PROCEDURE.
It is the sense of the Congress that rule 9011 of the
Federal Rules of Bankruptcy Procedure (11 U.S.C. App)
should be modified to include a requirement that all docu-
ments (including schedules), signed and unsigned, submit-
ted to the court or to a trustee by debtors who represent
themselves and debtors who are represented by an attor-
ney be submitted only after the debtor or the debtor’s at-
torney has made reasonable inquiry to verify that the in-
formation contained in such documents is well grounded
in fact, and is warranted by existing law or a good-faith
argument for the extension, modification, or reversal of
existing law.
SEC. 411. JURISDICTION OF COURTS OF APPEALS.
(a) JURISDICTION.—Title 28 of the United States
Code is amended—
(1) by striking section 158;
(2) by inserting after section 1292 the follow-
ing:
‘‘§ 1293. Bankruptcy appeals
‘‘The courts of appeals (other the United States
Court of Appeals for the Federal Circuit) shall have juris-
diction of appeals from the following:
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‘‘(1) Final orders and judgments of bankruptcy
courts entered under—
‘‘(A) section 157(b) of this title in core
proceedings arising under title 11, or arising in
or related to a case under title 11; or
‘‘(B) section 157(c)(2) of this title in pro-
ceedings referred to such courts.
‘‘(2) Final orders and judgments of district
courts entered under section 157 of this title in—
‘‘(A) core proceedings arising under title
11, or arising in or related to a case under title
11; or
‘‘(B) proceedings that are not core pro-
ceedings, but that are otherwise related to a
case under title 11.
‘‘(3) Orders and judgments of bankruptcy
courts or district courts entered under section 105
of title 11, or the refusal to enter an order or judg-
ment under such section.
‘‘(4) Orders of bankruptcy courts or district
courts entered under section 1104(a) or 1121(d) of
title 11, or the refusal to enter an order under such
section.
‘‘(5) An interlocutory order of a bankruptcy
court or district court entered in a case under title
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11, in a proceeding arising under title 11, or in a
proceeding arising in or related to a case under title
11, if—
‘‘(A) such court is of the opinion that—
‘‘(i) such order involves a controlling
question of law as to which there is sub-
stantial ground for difference of opinion;
and
‘‘(ii) an immediate appeal from such
order may materially advance the ultimate
termination of such case or such proceed-
ing; or
‘‘(B) the court of appeals that would have
jurisdiction of an appeal of a final order entered
in such case or such proceeding permits, in its
discretion, appeal to be taken from such inter-
locutory order.’’; and
(3) in—
(A) the table of sections for chapter 6 by
striking the item relating to section 158; and
(B) the table of sections for chapter 83 by
inserting after the item relating to section 1292
the following:
‘‘1293. Bankruptcy appeals.’’.
(b) CONFORMING AMENDMENTS.—(1) Section 305(c)
of title 11, the United States Code, is amended by striking
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‘‘158(d), 1291, or 1292’’ and inserting ‘‘1291, 1292, or
1293’’.
(2) Title 28, United States Code, is amended—
(A) in subsections (b)(1) and (c)(2) of section
157 by striking ‘‘section 158’’ and inserting ‘‘section
1293’’;
(B) in section 1334(d) by striking ‘‘158(d),
1291, or 1292’’ and inserting ‘‘1291, 1292, or
1293’’; and
(C) in section 1452(b) by striking ‘‘158(d),
1291, or 1292’’ and inserting ‘‘1291, 1292, or
1293’’.
SEC. 412. ESTABLISHMENT OF OFFICIAL FORMS.
The Judicial Conference of the United States shall
establish official forms to facilitate compliance with the
amendments made by sections 101 and 102.
SEC. 413. ELIMINATION OF CERTAIN FEES PAYABLE IN
CHAPTER 11 BANKRUPTCY CASES.
(a) AMENDMENTS.—Section 1930(a)(6) of title 28,
United States Code, is amended—
(1) in the 1st sentence by striking ‘‘until the
case is converted or dismissed, whichever occurs
first’’; and
(2) in the 2d sentence—
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(A) by striking ‘‘The’’ and inserting ‘‘Until
the plan is confirmed or the case is converted
(whichever occurs first) the’’; and
(B) by striking ‘‘less than $300,000;’’ and
inserting ‘‘less than $300,000. Until the case is
converted, dismissed, or closed (whichever oc-
curs first and without regard to confirmation of
the plan) the fee shall be’’.
(b) DELAYED EFFECTIVE DATE.—The amendments
made by subsection (a) shall take effect on October 1,
1999.
SEC. 414. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX-
TENDED TO DEPENDENT STUDENTS.
Not later than 1 year after the date of the enactment
of this Act, the Comptroller General of the United States
shall—
(1) conduct a study regarding the impact that
the extension of credit to individuals who are—
(A) claimed as dependents for purposes of
the Internal Revenue Code of 1986; and
(B) enrolled in post-secondary educational
institutions,
has on the rate of cases filed under title 11 of the
United States Code; and
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(2) submit to the Speaker of the House of Rep-
resentatives and the President pro tempore of the
Senate a report summarizing such study.
Subtitle B—Data Provisions
SEC. 441. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT.—Title 28, United States Code, is
amended by adding after section 158 the following new
section:
‘‘§ 159. Bankruptcy statistics
‘‘The Director of the Executive Office for United
States Trustees shall compile statistics regarding individ-
ual debtors with primarily consumer debts seeking relief
under chapters 7, 11, and 13 of title 11. The Executive
Office for United States Trustees shall compile such sta-
tistics, in such form as shall be determined by such Office,
in consultation with the Administrative Office of the
United States Courts, and make them public, and report
annually to the Congress on the information collected, and
on its analysis thereof, no later than October 31 of each
year. Such compilation shall be itemized by chapter of title
11, shall be presented in the aggregate and for each dis-
trict, and shall include the following:
‘‘(1) Total assets and total liabilities of such
debtors, and in each category of assets and liabil-
ities, as reported in the schedules prescribed pursu-
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ant to section 2075 of this title and filed by such
debtors.
‘‘(2) The current monthly total income, pro-
jected monthly net income, and average income and
average expenses of such debtors as reported on the
schedules and statements the debtor has filed under
sections 111, 521, and 1322 of title 11.
‘‘(3) The aggregate amount of debt discharged
in the reporting period, 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.
‘‘(4) The average time between the filing of the
petition and the closing of the case.
‘‘(5) The number of cases in the reporting pe-
riod in which a reaffirmation was filed and the total
number of reaffirmations filed in that period, and of
those cases in which a reaffirmation was filed, the
number in which the debtor was not represented by
an attorney, and of those the number of cases in
which the reaffirmation was approved by the court.
‘‘(6) With respect to cases filed under chapter
13 of title 11—
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‘‘(A) the number of cases in which a final
order was entered determining the value of
property securing a claim less than the claim,
and the total number of such orders in the re-
porting period; and
‘‘(B) the number of cases dismissed for
failure to make payments under the plan.
‘‘(7) The number of cases in which the debtor
filed another case within the 6 years previous to the
filing.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect 18 months after the date
of the enactment of this Act.
SEC. 442. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA.
(a) AMENDMENT.—Title 28 of the United States
Code is amended by inserting after section 589a the fol-
lowing:
‘‘§ 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
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‘‘(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter
11 of title 11.
‘‘(b) REPORTS.—All reports referred to in subsection
(a) shall be designed (and the requirements as to place
and manner of filing shall be established) so as to facili-
tate compilation of data and maximum possible access of
the public, both by physical inspection at 1 or more central
filing locations, and by electronic access through the Inter-
net 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—
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; and
‘‘(2) economy, simplicity, and lack of undue
burden on persons with a duty to file reports.
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‘‘(d) FINAL REPORTS.—Final reports proposed for
adoption by trustees under chapters 7, 12, and 13 of title
11 shall, in addition to such other matters as are required
by law or as the Attorney General in the discretion of the
Attorney General, shall propose, include with respect to
a case under such title—
‘‘(1) information about the length of time the
case was pending;
‘‘(2) assets abandoned;
‘‘(3) assets exempted;
‘‘(4) receipts and disbursements of the estate;
‘‘(5) expenses of administration;
‘‘(6) claims asserted;
‘‘(7) claims allowed; and
‘‘(8) distributions to claimants and claims dis-
charged without payment,
in each case by appropriate category and, in cases under
chapters 12 and 13 of title 11, date of confirmation of
the plan, each modification thereto, and defaults by the
debtor in performance under the plan.
‘‘(e) PERIODIC REPORTS.—Periodic reports proposed
for adoption by trustees or debtors in possession under
chapter 11 of title 11 shall, in addition to such other mat-
ters as are required by law or as the Attorney General,
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in the discretion of the Attorney General, shall propose,
include—
‘‘(1) information about the standard industry
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor;
‘‘(2) length of time the case has been pending;
‘‘(3) number of full-time employees as at the
date of the order for relief and at end of each re-
porting period since the case was filed;
‘‘(4) cash receipts, cash disbursements and
profitability of the debtor for the most recent period
and cumulatively since the date of the order for re-
lief;
‘‘(5) compliance with title 11, whether or not
tax returns and tax payments since the date of the
order for relief have been timely filed and made;
‘‘(6) all professional fees approved by the court
in the case for the most recent period and cumula-
tively since the date of the order for relief (sepa-
rately reported, in for the professional fees incurred
by or on behalf of the debtor, between those that
would have been incurred absent a bankruptcy case
and those not); and
‘‘(7) plans of reorganization filed and confirmed
and, with respect thereto, by class, the recoveries of
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the holders, expressed in aggregate dollar values
and, in the case of claims, as a percentage of total
claims of the class allowed.’’.
(b) TECHNICAL AMENDMENT.—The table of sections
of chapter 39 of title 28, United States Code, is amended
by adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 443. SENSE OF THE CONGRESS REGARDING AVAIL-
ABILITY OF BANKRUPTCY DATA.
It is the sense of the Congress that—
(1) the national policy of the United States
should be that all data held by bankruptcy clerks in
electronic form, to the extent such data reflects only
public records (as defined in section 107 of title 11
of the United States Code), should be released in a
usable electronic form in bulk to the public subject
to such appropriate privacy concerns and safeguards
as the Judicial Conference of the United States may
determine; and
(2) there should be established a bankruptcy
data system in which—
(A) a single set of data definitions and
forms are used to collect data nationwide; and
(B) data for any particular bankruptcy
case are aggregated in the same electronic
record.
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TITLE V—TAX PROVISIONS
SEC. 501. TREATMENT OF CERTAIN LIENS.
(a) TREATMENT OF CERTAIN LIENS.—Section 724
of title 11, United States Code, is amended—
(1) in subsection (b), in the matter preceding
paragraph (1), by inserting ‘‘(other than to the ex-
tent that there is a properly perfected unavoidable
tax lien arising in connection with an ad valorem tax
on real or personal property of the estate)’’ after
‘‘under this title’’;
(2) in subsection (b)(2), after ‘‘507(a)(1)’’, in-
sert ‘‘(except that such expenses, other than claims
for wages, salaries, or commissions which arise after
the filing of a petition, shall be limited to expenses
incurred under chapter 7 of this title and shall not
include expenses incurred under chapter 11 of this
title)’’; and
(3) by adding at the end the following:
‘‘(e) Before subordinating a tax lien on real or per-
sonal property of the estate, the trustee shall—
‘‘(1) exhaust the unencumbered assets of the
estate; and
‘‘(2) in a manner consistent with section 506(c)
of this title, recover from property securing an al-
lowed secured claim the reasonable, necessary costs
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and expenses of preserving or disposing of that prop-
erty.
‘‘(f) Notwithstanding the exclusion of ad valorem tax
liens set forth in this section and subject to the require-
ments of subsection (e)—
‘‘(1) claims for wages, salaries, and commis-
sions that are entitled to priority under section
507(a)(3) of this title; or
‘‘(2) claims for contributions to an employee
benefit plan entitled to priority under section
507(a)(4) of this title,
may be paid from property of the estate which secures
a tax lien, or the proceeds of such property.’’.
(b) DETERMINATION OF TAX LIABILITY.—Section
505(a)(2) of title 11, United States Code, is amended—
(1) in subparagraph (A), by striking ‘‘or’’ at
the end;
(2) in subparagraph (B), by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount
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under any law (other than a bankruptcy law) has ex-
pired.’’.
SEC. 502. ENFORCEMENT OF CHILD AND SPOUSAL SUP-
PORT.
Section 522(c)(1) of title 11, United States Code, is
amended to read as follows:
‘‘(1) a debt of a kind specified in paragraph (1)
or (5) of section 523(a) of this title, and such prop-
erty shall be liable for a debt of a kind specified in
such paragraph (5) notwithstanding any State law
to the contrary;’’.
SEC. 503. EFFECTIVE NOTICE TO GOVERNMENT.
(a) 
EFFECTIVE
NOTICE
TO
GOVERNMENTAL
UNITS.—Section 342 of title 11, United States Code, as
amended by section 405, is amended by adding at the end
the following:
‘‘(g) If a debtor lists a governmental unit as a credi-
tor in a list or schedule, any notice required to be given
by the debtor under this title, any rule, any applicable law,
or any order of the court, shall identify the department,
agency, or instrumentality through which the debtor is in-
debted. The debtor shall identify (with information such
as a taxpayer identification number, loan, account or con-
tract number, or real estate parcel number, where applica-
ble), and describe the underlying basis for the govern-
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mental unit’s claim. If the debtor’s liability to a govern-
mental unit arises from a debt or obligation owed or in-
curred by another individual, entity, or organization, or
under a different name, the debtor shall identify such indi-
vidual, entity, organization, or name.
‘‘(h) The clerk shall keep and update quarterly, in
the form and manner as the Director of the Administra-
tive Office of the United States Courts prescribes, and
make available to debtors, a register in which a govern-
mental unit may designate a safe harbor mailing address
for service of notice in cases pending in the district. A
governmental unit may file a statement with the clerk des-
ignating a safe harbor address to which notices are to be
sent, unless such governmental unit files a notice of
change of address.’’.
(b) ADOPTION OF RULES PROVIDING NOTICE.—The
Advisory Committee on Bankruptcy Rules of the Judicial
Conference shall, within a reasonable period of time after
the date of the enactment of this Act, propose for adoption
enhanced rules for providing notice to State, Federal, and
local government units that have regulatory authority over
the debtor or which may be creditors in the debtor’s case.
Such rules shall be reasonably calculated to ensure that
notice will reach the representatives of the governmental
unit, or subdivision thereof, who will be the proper persons
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authorized to act upon the notice. At a minimum, the rules
should require that the debtor—
(1) identify in the schedules and the notice, the
subdivision, agency, or entity in respect of which
such notice should be received;
(2) provide sufficient information (such as case
captions, permit numbers, taxpayer identification
numbers, or similar identifying information) to per-
mit the governmental unit or subdivision thereof, en-
titled to receive such notice, to identify the debtor or
the person or entity on behalf of which the debtor
is providing notice where the debtor may be a suc-
cessor in interest or may not be the same as the per-
son or entity which incurred the debt or obligation;
and
(3) identify, in appropriate schedules, served to-
gether with the notice, the property in respect of
which the claim or regulatory obligation may have
arisen, if any, the nature of such claim or regulatory
obligation and the purpose for which notice is being
given.
(c) EFFECT OF FAILURE OF NOTICE.—Section 342
of title 11, United States Code, as amended by subsection
(a) and section 405, is amended by adding at the end the
following:
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‘‘(i)(1) A notice that does not comply with sub-
sections (d) and (e) shall have no effect unless the debtor
demonstrates, by clear and convincing evidence, that time-
ly notice was given in a manner reasonably calculated to
satisfy the requirements of this section was given, and
that—
‘‘(A) either the notice was timely sent to the
safe harbor address provided in the register main-
tained by the clerk of the district in which the case
was pending for such purposes; or
‘‘(B) no safe harbor address was provided in
such list for the governmental unit and that an offi-
cer of the governmental unit who is responsible for
the matter or claim had actual knowledge of the case
in sufficient time to act.
‘‘(2) No sanction under section 362(h) of this title
or any other sanction which a court may impose on ac-
count of violations of the stay under section 362(a) of this
title or failure to comply with section 542 or 543 of this
title may be imposed unless the action takes place after
notice of the commencement of the case as required by
this section has been received.’’.
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SEC. 504. NOTICE OF REQUEST FOR A DETERMINATION OF
TAXES.
Section 505(b) of title 11, United States Code, is
amended by striking ‘‘Unless’’ at the beginning of the sec-
ond sentence thereof and inserting ‘‘If the request is made
in the manner designated by the governmental unit and
unless’’.
SEC. 505. RATE OF INTEREST ON TAX CLAIMS.
Chapter 5 of title 11, United States Code, is amended
by adding at the end the following:
‘‘§ 511. Rate of interest on tax claims
‘‘Notwithstanding any provision of this title that re-
quires the payment of interest on a claim, if interest is
required to be paid on a tax claim, the rate of interest
shall be as follows:
‘‘(1) In the case of ad valorem tax claims,
whether secured or unsecured, other unsecured tax
claims where interest is required to be paid under
section 726(a)(5) of this title and secured tax claims
the rate shall be determined under applicable non-
bankruptcy law.
‘‘(2) In the case of unsecured claims for taxes
arising before the date of the order for relief and
paid under a plan of reorganization, the minimum
rate of interest to be applied during the period after
the filing of the petition shall be the Federal short-
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term rate rounded to the nearest full percent, deter-
mined under section 1274(d) of the Internal Reve-
nue Code of 1986, for the calendar month in which
the plan is confirmed, plus 3 percentage points.’’.
SEC. 506. TOLLING OF PRIORITY OF TAX CLAIM TIME
PERIODS.
Section 507(a)(9)(A) of title 11, United States Code,
as so redesignated, is amended—
(1) in clause (i) by inserting after ‘‘petition’’
and before the semicolon ‘‘, plus any time, plus 6
months, during which the stay of proceedings was in
effect in a prior case under this title’’; and
(2) amend clause (ii) to read as follows:
‘‘(ii) assessed within 240 days before
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time plus 30 days dur-
ing which an offer in compromise with
respect of such tax, was pending or in
effect during such 240-day period;
‘‘(II) any time plus 30 days dur-
ing which an installment agreement
with respect of such tax was pending
or in effect during such 240-day pe-
riod, up to 1 year; and
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‘‘(III) any time plus 6 months
during which a stay of proceedings
against collections was in effect in a
prior case under this title during such
240-day period.’’.
SEC. 507. ASSESSMENT DEFINED.
(a) ASSESSMENT DEFINED
FOR PRIORITY PUR-
POSES.—Section 101 of title 11, United States Code, is
amended by inserting after paragraph (2) the following:
‘‘(3) ‘assessment’—
‘‘(A) for purposes of State and local taxes,
means that point in time when all actions re-
quired have been taken so that thereafter a tax-
ing authority may commence an action to col-
lect the tax; and
‘‘(B) for Federal tax purposes has the
meaning given such term in the Internal Reve-
nue Code of 1986,
and ‘assessed’ and ‘assessable’ shall be interpreted
in light of the definition of assessment in this para-
graph;’’.
(b) ASSESSMENT DEFINED FOR THE STAY OF PRO-
CEEDINGS.—Section 362(b)(9)(D) of title 11, United
States Code, is amended by inserting after ‘‘the making
of an assessment’’ the following: ‘‘as defined by applicable
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nonbankruptcy law notwithstanding the definition of an
‘assessment’ elsewhere in this title’’.
SEC. 508. CHAPTER 13 DISCHARGE OF FRAUDULENT AND
OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code,
is amended by inserting ‘‘(1),’’ after ‘‘paragraph’’.
SEC. 509. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, as
amended by section 119A, is amended by adding at the
end the following:
‘‘(6) Notwithstanding the provisions of paragraph
(1), the confirmation of a plan does not discharge a debtor
which is a corporation from any debt for a tax or customs
duty with respect to which the debtor made a fraudulent
return or willfully attempted in any manner to evade or
defeat such tax.’’.
SEC. 510. STAY OF TAX PROCEEDINGS.
(a) SECTION 362 STAY LIMITED TO PREPETITION
TAXES.—Section 362(a)(8) of title 11, United States
Code, is amended by striking the period at the end and
inserting ‘‘, in respect of a tax liability for a taxable period
ending before the order for relief.’’.
(b) APPEAL
OF
TAX
COURT
DECISIONS
PER-
MITTED.—Section 362(b)(9) of title 11, United States
Code, is amended—
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(1) in subparagraph (C) by striking ‘‘or’’ at the
end;
(2) in subparagraph (D) by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(E) the appeal of a decision by a court or
administrative tribunal which determines a tax
liability of the debtor without regard to whether
such determination was made prepetition or
postpetition.’’.
SEC. 511. PERIODIC PAYMENT OF TAXES IN CHAPTER 11
CASES.
Section 1129(a)(9) of title 11, United States Code,
is amended—
(1) in subparagraph (B) by striking ‘‘and’’ at
the end; and
(2) in subparagraph (C)—
(A) by striking ‘‘deferred cash payments,
over a period not exceeding six years after the
date of assessment of such claim,’’ and insert-
ing ‘‘regular installment payments in cash, but
in no case with a balloon provision, and no
more than three months apart, beginning no
later than the effective date of the plan and
ending on the earlier of five years after the pe-
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tition date or the last date payments are to be
made under the plan to unsecured creditors,’’;
(B) by striking the period at the end and
inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(D) with respect to a secured claim which
would be described in section 507(a)(8) of this
title but for its secured status, the holder of
such claim will receive on account of such claim
cash payments of not less than is required in
subparagraph (C) and over a period no greater
than is required in such subparagraph.’’.
SEC. 512. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED.
Section 545(2) of title 11, United States Code, is
amended by striking the semicolon at the end and insert-
ing ‘‘, except where such purchaser is a purchaser de-
scribed in section 6323 of the Internal Revenue Code of
1986 or similar provision of State or local law;’’.
SEC. 513. PAYMENT OF TAXES IN THE CONDUCT OF
BUSINESS.
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of
title 28, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and
(2) by adding at the end the following:
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‘‘(b) Such taxes shall be paid when due in the conduct
of such business unless—
‘‘(1) the tax is a property tax secured by a lien
against property that is abandoned within a reason-
able time after the lien attaches, by the trustee of
a bankruptcy estate, pursuant to section 554 of title
11; or
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11.
‘‘(c) In a case pending under chapter 7 of title 11,
payment of a tax may be deferred until final distribution
is made under section 726 of title 11 if—
‘‘(1) the tax was not incurred by a trustee duly
appointed under chapter 7 of title 11; or
‘‘(2) before the due date of the tax, the court
has made a finding of probable insufficiency of
funds of the estate to pay in full the administrative
expenses allowed under section 503(b) of title 11
that have the same priority in distribution under
section 726(b) of title 11 as such tax.’’.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B) of title 11, United States Code, is
amended in clause (i) by inserting after ‘‘estate,’’ and be-
fore ‘‘except’’ the following: ‘‘whether secured or unse-
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cured, including property taxes for which liability is in rem
only, in personam or both,’’.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE
EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(D) notwithstanding the requirements of sub-
section (a) of this section, a governmental unit shall
not be required to file a request for the payment of
a claim described in subparagraph (B) or (C);’’.
(d) PAYMENT OF TAXES AND FEES AS SECURED
CLAIMS.—Section 506 of title 11, United States Code, is
amended—
(1) in subsection (b) by inserting ‘‘or State
statute’’ after ‘‘agreement’’; and
(2) in subsection (c) by inserting ‘‘, including
the payment of all ad valorem property taxes in re-
spect of the property’’ before the period at the end.
SEC. 514. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ‘‘before the date on which the trustee
commences distribution under this section’’ and inserting
‘‘on or before the earlier of 10 days after the mailing to
creditors of the summary of the trustee’s final report or
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the date on which the trustee commences final distribution
under this section’’.
SEC. 515. INCOME TAX RETURNS PREPARED BY TAX
AUTHORITIES.
Section 523(a)(1)(B) of title 11, United States Code,
is amended—
(1) by inserting ‘‘or equivalent report or no-
tice,’’ after ‘‘a return,’’;
(2) in clause (i)—
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by striking ‘‘or’’ at the end;
(3) in clause (ii)—
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by inserting ‘‘, report, or notice’’ after
‘‘return’’; and
(4) by adding at the end the following:
‘‘(iii) for purposes of this subsection,
a return—
‘‘(I) must satisfy the require-
ments of applicable nonbankruptcy
law, and includes a return prepared
pursuant to section 6020(a) of the In-
ternal Revenue Code of 1986, or simi-
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lar State or local law, or a written
stipulation to a judgment entered by a
nonbankruptcy tribunal, but does not
include a return made pursuant to
section 6020(b) of the Internal Reve-
nue Code of 1986, or similar State or
local law; and
‘‘(II) must have been filed in a
manner permitted by applicable non-
bankruptcy law; or’’.
SEC. 516. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES.
Section 505(b) of title 11, United States Code, is
amended in the second sentence by inserting ‘‘the estate,’’
after ‘‘misrepresentation,’’.
SEC. 517. REQUIREMENT TO FILE TAX RETURNS TO CON-
FIRM CHAPTER 13 PLANS.
(a) FILING
OF PREPETITION TAX RETURNS RE-
QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of
title 11, United States Code, as amended by section 146,
is amended—
(1) in paragraph (6) by striking ‘‘and’’ at the
end;
(2) in paragraph (7) by striking the period at
the end and inserting ‘‘; and’’; and
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(3) by adding at the end the following:
‘‘(8) if the debtor has filed all Federal, State,
and local tax returns as required by section 1308 of
this title.’’.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX
RETURNS.—(1) Chapter 13 of title 11, United States
Code, is amended by adding at the end the following:
‘‘§ 1308. Filing of prepetition tax returns
‘‘(a) On or before the day prior to the day on which
the first meeting of the creditors is convened under section
341(a) of this title, the debtor shall have filed with appro-
priate tax authorities all tax returns for all taxable periods
ending in the 6-year period ending on the date of filing
of the petition.
‘‘(b) If the tax returns required by subsection (a)
have not been filed by the date on which the first meeting
of creditors is convened under section 341(a) of this title,
the trustee may continue such meeting for a reasonable
period of time, to allow the debtor additional time to file
any unfiled returns, but such additional time shall be no
more than—
‘‘(1) for returns that are past due as of the
date of the filing of the petition, 120 days from such
date;
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‘‘(2) for returns which are not past due as of
the date of the filing of the petition, the later of 120
days from such date or the due date for such re-
turns under the last automatic extension of time for
filing such returns to which the debtor is entitled,
and for which request has been timely made, accord-
ing to applicable nonbankruptcy law; and
‘‘(3) upon notice and hearing, and order en-
tered before the lapse of any deadline fixed accord-
ing to this subsection, where the debtor dem-
onstrates, by clear and convincing evidence, that the
failure to file the returns as required is because of
circumstances beyond the control of the debtor, the
court may extend the deadlines set by the trustee as
provided in this subsection for—
‘‘(A) a period of no more than 30 days for
returns described in paragraph (1) of this sub-
section; and
‘‘(B) for no more than the period of time
ending on the applicable extended due date for
the returns described in paragraph (2).
‘‘(c) For purposes of this section only, a return in-
cludes a return prepared pursuant to section 6020 (a) or
(b) of the Internal Revenue Code of 1986 or similar State
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or local law, or a written stipulation to a judgment entered
by a nonbankruptcy tribunal.’’.
(2) The table of sections of chapter 13 of title 11,
United States Code, is amended by inserting after the
item relating to section 1307 the following:
‘‘1308. Filing of prepetition tax returns.’’.
(c) DISMISSAL
OR CONVERSION
ON FAILURE TO
COMPLY.—Section 1307 of title 11, United States Code,
is amended—
(1) by redesignating subsections (e) and (f) as
subsections (f) and (g), respectively; and
(2) by inserting after subsection (d) the follow-
ing:
‘‘(e) Upon the failure of the debtor to file tax returns
under section 1308 of this title, on request of a party in
interest or the United States trustee and after notice and
a hearing, the court shall dismiss a case or convert a case
under this chapter to a case under chapter 7 of this title,
whichever is in the best interests of creditors and the es-
tate.’’.
(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of
title 11, United States Code, is amended by striking the
period at the end and inserting ‘‘, and except that in a
case under chapter 13 of this title, a claim of a govern-
mental unit for a tax in respect of a return filed under
section 1308 of this title shall be timely if it is filed on
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or before 60 days after such return or returns were filed
as required.’’.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO
CONFIRMATION.—It is the sense of the Congress that the
Advisory Committee on Bankruptcy Rules of the Judicial
Conference should, within a reasonable period of time
after the date of the enactment of this Act, propose for
adoption amended Federal Rules of Bankruptcy Proce-
dure which provide that—
(1) notwithstanding the provisions of Rule
3015(f), in cases under chapter 13 of title 11,
United States Code, a governmental unit may object
to the confirmation of a plan on or before 60 days
after the debtor files all tax returns required under
sections 1308 and 1325(a)(7) of title 11, United
States Code; and
(2) in addition to the provisions of Rule 3007,
in a case under chapter 13 of title 11, United States
Code, no objection to a tax in respect of a return re-
quired to be filed under such section 1308 shall be
filed until such return has been filed as required.
SEC. 518. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a) of title 11, United States Code, is
amended in paragraph (1)—
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(1) by inserting after ‘‘records,’’ the following:
‘‘including a full discussion of the potential material
Federal, State, and local tax consequences of the
plan to the debtor, any successor to the debtor, and
a hypothetical investor domiciled in the State in
which the debtor resides or has its principal place of
business typical of the holders of claims or interests
in the case,’’;
(2) by inserting ‘‘such’’ after ‘‘enable’’; and
(3) by striking ‘‘reasonable’’ where it appears
after ‘‘hypothetical’’ and by striking ‘‘typical of hold-
ers of claims or interests’’ after ‘‘investor’’.
SEC. 519. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as
amended by sections 130, 146, and 150 is amended—
(1) in paragraph (21) by striking ‘‘or’’;
(2) in paragraph (22) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by inserting after paragraph (22) (as so re-
designated) the following:
‘‘(23) under subsection (a) of the setoff of an
income tax refund, by a governmental unit, in re-
spect of a taxable period which ended before the
order for relief against an income tax liability for a
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taxable period which also ended before the order for
relief, unless—
‘‘(A) prior to such setoff, an action to de-
termine the amount or legality of such tax li-
ability under section 505(a) was commenced; or
‘‘(B) where the setoff of an income tax re-
fund is not permitted because of a pending ac-
tion to determine the amount or legality of a
tax liability, the governmental unit may hold
the refund pending the resolution of the ac-
tion.’’.
TITLE VI—ANCILLARY AND
OTHER CROSS-BORDER CASES
SEC. 601. AMENDMENT TO ADD A CHAPTER 6 TO TITLE 11,
UNITED STATES CODE.
(a) IN GENERAL.—Title 11, United States Code, is
amended by inserting after chapter 5 the following:
‘‘CHAPTER 6—ANCILLARY AND OTHER
CROSS-BORDER CASES
‘‘Sec.
‘‘601. Purpose and scope of application.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘602. Definitions.
‘‘603. International obligations of the United States.
‘‘604. Commencement of ancillary case.
‘‘605. Authorization to act in a foreign country.
‘‘606. Public policy exception.
‘‘607. Additional assistance.
‘‘608. Interpretation.
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‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND
CREDITORS TO THE COURT
‘‘609. Right of direct access.
‘‘610. Limited jurisdiction.
‘‘611. Commencement of bankruptcy case under section 301 or 303.
‘‘612. Participation of a foreign representative in a case under this title.
‘‘613. Access of foreign creditors to a case under this title.
‘‘614. Notification to foreign creditors concerning a case under this title.
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING
AND RELIEF
‘‘615. Application for recognition of a foreign proceeding.
‘‘616. Presumptions concerning recognition.
‘‘617. Order recognizing a foreign proceeding.
‘‘618. Subsequent information.
‘‘619. Relief that may be granted upon petition for recognition of a foreign pro-
ceeding.
‘‘620. Effects of recognition of a foreign main proceeding.
‘‘621. Relief that may be granted upon recognition of a foreign proceeding.
‘‘622. Protection of creditors and other interested persons.
‘‘623. Actions to avoid acts detrimental to creditors.
‘‘624. Intervention by a foreign representative.
‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND
FOREIGN REPRESENTATIVES
‘‘625. Cooperation and direct communication between the court and foreign
courts or foreign representatives.
‘‘626. Cooperation and direct communication between the trustee and foreign
courts or foreign representatives.
‘‘627. Forms of cooperation.
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS
‘‘628. Commencement of a case under this title after recognition of a foreign
main proceeding.
‘‘629. Coordination of a case under this title and a foreign proceeding.
‘‘630. Coordination of more than 1 foreign proceeding.
‘‘631. Presumption of insolvency based on recognition of a foreign main pro-
ceeding.
‘‘632. Rule of payment in concurrent proceedings.
‘‘§ 601. Purpose and scope of application
‘‘(a) The purpose of this chapter is to incorporate the
Model Law on Cross-Border Insolvency so as to provide
effective mechanisms for dealing with cases of cross-bor-
der insolvency with the objectives of—
‘‘(1) cooperation between—
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‘‘(A) United States courts, United States
Trustees, trustees, examiners, debtors, and
debtors in possession; and
‘‘(B) the courts and other competent au-
thorities of foreign countries involved in cross-
border insolvency cases;
‘‘(2) greater legal certainty for trade and in-
vestment;
‘‘(3) fair and efficient administration of cross-
border insolvencies that protects the interests of all
creditors, and other interested entities, including the
debtor;
‘‘(4) protection and maximization of the value
of the debtor’s assets; and
‘‘(5) facilitation of the rescue of financially
troubled businesses, thereby protecting investment
and preserving employment.
‘‘(b) This chapter applies where—
‘‘(1) assistance is sought in the United States
by a foreign court or a foreign representative in con-
nection with a foreign proceeding;
‘‘(2) assistance is sought in a foreign country in
connection with a case under this title;
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‘‘(3) a foreign proceeding and a case under this
title with respect to the same debtor are taking place
concurrently; or
‘‘(4) creditors or other interested persons in a
foreign country have an interest in requesting the
commencement of, or participating in, a case or pro-
ceeding under this title.
‘‘(c) This chapter does not apply to—
‘‘(1) a proceeding concerning an entity identi-
fied by exclusion in subsection 109(b);
‘‘(2) an individual, or to an individual and such
individual’s spouse, who have debts within the limits
specified in under section 109(e) and who are citi-
zens of the United States or aliens lawfully admitted
for permanent residence in the United States; or
‘‘(3) an entity subject to a proceeding under the
Securities Investor Protection Act, a stockbroker
subject to subchapter III of chapter 7 of this title,
or a commodity broker subject to subchapter IV of
chapter 7 of this title.
‘‘SUBCHAPTER I—GENERAL PROVISIONS
‘‘§ 602. Definitions
‘‘For the purposes of this chapter, the term—
‘‘(1) ‘debtor’ means an entity that is the subject
of a foreign proceeding;
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‘‘(2) ‘establishment’ means any place of oper-
ations where the debtor carries out a nontransitory
economic activity;
‘‘(3) ‘foreign court’ means a judicial or other
authority competent to control or supervise a foreign
proceeding;
‘‘(4) ‘foreign main proceeding’ means a foreign
proceeding taking place in the country where the
debtor has the center of its main interests;
‘‘(5) ‘foreign nonmain proceeding’ means a for-
eign proceeding, other than a foreign main proceed-
ing, taking place in a country where the debtor has
an establishment;
‘‘(6) ‘trustee’ includes a trustee, a debtor in
possession in a case under any chapter of this title,
or a debtor under chapters 9 or 13 of this title; and
‘‘(7) ‘within the territorial jurisdiction of the
United States’ when used with reference to property
of a debtor refers to tangible property located within
the territory of the United States and intangible
property deemed under applicable nonbankruptcy
law to be located within that territory, including any
property subject to attachment or garnishment that
may properly be seized or garnished by an action in
a Federal or State court in the United States.
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‘‘§ 603. International obligations of the United States
‘‘To the extent that this chapter conflicts with an ob-
ligation of the United States arising out of any treaty or
other form of agreement to which it is a party with 1 or
more other countries, the requirements of the treaty or
agreement prevail.
‘‘§ 604. Commencement of ancillary case
‘‘A case under this chapter is commenced by the filing
of a petition for recognition of a foreign proceeding under
section 615.
‘‘§ 605. Authorization to act in a foreign country
‘‘A trustee or another entity (including an examiner)
authorized by the court may be authorized by the court
to act in a foreign country on behalf of an estate created
under section 541. An entity authorized to act under this
section may act in any way permitted by the applicable
foreign law.
‘‘§ 606. Public policy exception
‘‘Nothing in this chapter prevents the court from re-
fusing to take an action governed by this chapter if the
action would be manifestly contrary to the public policy
of the United States.
‘‘§ 607. Additional assistance
‘‘(a) Subject to the specific limitations stated else-
where in this chapter the court, upon recognition of a for-
eign proceeding, to provide additional assistance to a for-
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eign representative under this title or under other laws
of the United States.
‘‘(b) In determining whether to provide additional as-
sistance under this title or under other laws of the United
States, the court shall consider whether such additional
assistance, consistent with the principles of comity, will
reasonably assure—
‘‘(1) just treatment of all holders of claims
against or interests in the debtor’s property;
‘‘(2) protection of claim holders in the United
States against prejudice and inconvenience in the
processing of claims in such foreign proceeding;
‘‘(3) prevention of preferential or fraudulent
dispositions of property of the debtor;
‘‘(4) distribution of proceeds of the debtor’s
property substantially in accordance with the order
prescribed by this title; and
‘‘(5) if appropriate, the provision of an oppor-
tunity for a fresh start for the individual that such
foreign proceeding concerns.
‘‘§ 608. Interpretation
‘‘In interpreting this chapter, the court shall consider
its international origin, and the need to promote an appli-
cation of this chapter that is consistent with the applica-
tion of similar statutes adopted by foreign jurisdictions.
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‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP-
RESENTATIVES AND CREDITORS TO THE
COURT
‘‘§ 609. Right of direct access
‘‘(a) A foreign representative is entitled to commence
a case under section 604 by filing a petition for recogni-
tion under section 615, and upon recognition, to apply di-
rectly to other Federal and State courts for appropriate
relief in those courts.
‘‘(b) Upon recognition, and subject to section 610,
a foreign representative has the capacity to sue and be
sued, and shall be subject to the laws of the United States
of general applicability.
‘‘(c) Subject to section 610 of this title, a foreign rep-
resentative is subject to laws of general application.
‘‘(d) Recognition under this chapter is prerequisite to
the granting of comity or cooperation to a foreign rep-
resentative in any State or Federal court in the United
States. Any request for comity or cooperation by a foreign
representative in any court shall be accompanied by a
sworn statement setting forth whether recognition under
section 615 has been sought and the status of any such
petition.
‘‘(e) Upon denial of recognition under this chapter,
the court may issue appropriate orders necessary to pre-
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vent an attempt to obtain comity or cooperation from
courts in the United States without such recognition.
‘‘§ 610. Limited jurisdiction
‘‘The sole fact that a foreign representative files a
petition under section 615 does not subject the foreign
representative to the jurisdiction of any court in the
United States for any other purpose.
‘‘§ 611. Commencement of case under section 301 or
303
‘‘(a) Upon recognition, a foreign representative may
commence—
‘‘(1) an involuntary case under section 303; or
‘‘(2) a voluntary case under section 301 or 302,
if the foreign proceeding is a foreign main proceed-
ing.
‘‘(b) The petition commencing a case under sub-
section (a) of this section must be accompanied by a state-
ment describing the petition for recognition and its cur-
rent status. The court where the petition for recognition
has been filed must be advised of the foreign representa-
tive’s intent to commence a case under subsection (a) of
this section prior to such commencement.
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‘‘§ 612. Participation of a foreign representative in a
case under this title
‘‘Upon recognition of a foreign proceeding, the for-
eign representative in that proceeding is entitled to par-
ticipate as a party in interest in a case regarding the debt-
or under this title.
‘‘§ 613. Access of foreign creditors to a case under
this title
‘‘(a) Foreign creditors have the same rights regarding
the commencement of, and participation in, a case under
this title as domestic creditors.
‘‘(b)(1) Subsection (a) of this section does not change
or codify present law as to the priority of claims under
section 507 or 726 of this title, except that the claim of
a foreign creditor under those sections shall not be given
a lower priority than that of general unsecured claims
without priority solely because the holder of such claim
is a foreign creditor.
‘‘(2)(A) Subsection (a) of this section and paragraph
(1) of this subsection do not change or codify present law
as to the allowability of foreign revenue claims or other
foreign public law claims in a proceeding under this title.
‘‘(B) Allowance and priority as to a foreign tax claim
or other foreign public law claim shall be governed by any
applicable tax treaty of the United States, under the con-
ditions and circumstances specified therein.
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‘‘§ 614. Notification to foreign creditors concerning a
case under this title
‘‘(a) Whenever in a case under this title notice is to
be given to creditors generally or to any class or category
of creditors, such notice shall also be given to the known
creditors generally, or to creditors in the notified class or
category, that do not have addresses in the United States.
The court may order that appropriate steps be taken with
a view to notifying any creditor whose address is not yet
known.
‘‘(b) Such notification to creditors with foreign ad-
dresses described in subsection (a) shall be given individ-
ually, unless the court considers that, under the cir-
cumstances, some other form of notification would be
more appropriate. No letters rogatory or other similar for-
mality is required.
‘‘(c) When a notification of commencement of a case
is to be given to foreign creditors, the notification shall—
‘‘(1) indicate the time period for filing proofs of
claim and specify the place for their filing;
‘‘(2) indicate whether secured creditors need to
file their proofs of claim; and
‘‘(3) contain any other information required to
be included in such a notification to creditors pursu-
ant to this title and the orders of the court.
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‘‘(d) Any rule of procedure or order of the court as
to notice or the filing of a claim shall provide such addi-
tional time to creditors with foreign addresses as is rea-
sonable under the circumstances.
‘‘SUBCHAPTER III—RECOGNITION OF A
FOREIGN PROCEEDING AND RELIEF
‘‘§ 615. Application for recognition of a foreign pro-
ceeding
‘‘(a) A foreign representative applies to the court for
recognition of the foreign proceeding in which the foreign
representative has been appointed by filing a petition for
recognition.
‘‘(b) A petition for recognition shall be accompanied
by—
‘‘(1) a certified copy of the decision commenc-
ing the foreign proceeding and appointing the for-
eign representative;
‘‘(2) a certificate from the foreign court affirm-
ing the existence of the foreign proceeding and of
the appointment of the foreign representative; or
‘‘(3) in the absence of evidence referred to in
paragraphs (1) and (2), any other evidence accept-
able to the court of the existence of the foreign pro-
ceeding and of the appointment of the foreign rep-
resentative.
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‘‘(c) A petition for recognition shall also be accom-
panied by a statement identifying all foreign proceedings
with respect to the debtor that are known to the foreign
representative.
‘‘(d) The documents referred to in paragraphs (1)
and (2) of subsection (b) must be translated into English.
The court may require a translation into English of addi-
tional documents.
‘‘§ 616. Presumptions concerning recognition
‘‘(a) If the decision or certificate referred to in section
615(b) indicates that the foreign proceeding is a foreign
proceeding within the meaning of section 101(23) and that
the person or body is a foreign representative within the
meaning of section 101(24), the court is entitled to so pre-
sume.
‘‘(b) The court is entitled to presume that documents
submitted in support of the petition for recognition are
authentic, whether or not they have been legalized.
‘‘(c) In the absence of evidence to the contrary, the
debtor’s registered office, or habitual residence in the case
of an individual, is presumed to be the center of the debt-
or’s main interests.
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‘‘§ 617. Order recognizing a foreign proceeding
‘‘(a) Subject to section 606, after notice and a hear-
ing an order recognizing a foreign proceeding shall be en-
tered if—
‘‘(1) the foreign proceeding is a foreign main
proceeding or foreign nonmain proceeding within the
meaning of section 602;
‘‘(2) the foreign representative applying for rec-
ognition is a person or body within the meaning of
section 101(24); and
‘‘(3) the petition meets the requirements of sec-
tion 615.
‘‘(b) The foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is taking
place in the country where the debtor has the center
of its main interests; or
‘‘(2) as a foreign nonmain proceeding if the
debtor has an establishment within the meaning of
section 602 in the foreign country where the pro-
ceeding is pending.
‘‘(c) A petition for recognition of a foreign proceeding
shall be decided upon at the earliest possible time. Entry
of an order recognizing a foreign proceeding shall con-
stitute recognition under this chapter.
‘‘(d) The provisions of this subchapter do not prevent
modification or termination of recognition if it is shown
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that the grounds for granting it were fully or partially
lacking or have ceased to exist, but in considering such
action the court shall give due weight to possible prejudice
to parties that have relied upon the granting of recogni-
tion. The case under this chapter may be closed in the
manner prescribed for a case under section 350.
‘‘§ 618. Subsequent information
‘‘From the time of filing the petition for recognition
of the foreign proceeding, the foreign representative shall
file with the court promptly a notice of change of status
concerning—
‘‘(1) any substantial change in the status of the
foreign proceeding or the status of the foreign rep-
resentative’s appointment; and
‘‘(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign represent-
ative.
‘‘§ 619. Relief that may be granted upon petition for
recognition of a foreign proceeding
‘‘(a) From the time of filing a petition for recognition
until the petition is decided upon, the court may, at the
request of the foreign representative, where relief is ur-
gently needed to protect the assets of the debtor or the
interests of the creditors, grant relief of a provisional na-
ture, including—
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‘‘(1) staying execution against the debtor’s as-
sets;
‘‘(2) entrusting the administration or realiza-
tion of all or part of the debtor’s assets located in
the United States to the foreign representative or
another person authorized by the court, including an
examiner, in order to protect and preserve the value
of assets that, by their nature or because of other
circumstances, are perishable, susceptible to devalu-
ation or otherwise in jeopardy; and
‘‘(3) any relief referred to in paragraph (3),
(4), or (7) of section 621(a).
‘‘(b) Unless extended under section 621(a)(6), the re-
lief granted under this section terminates when the peti-
tion for recognition is decided upon.
‘‘(c) It is a ground for denial of relief under this sec-
tion that such relief would interfere with the administra-
tion of a foreign main proceeding.
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under this
section.
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‘‘§ 620. Effects of recognition of a foreign main pro-
ceeding
‘‘(a) Upon recognition of a foreign proceeding that
is a foreign main proceeding—
‘‘(1) section 362 applies with respect to the
debtor and that property of the debtor that is within
the territorial jurisdiction of the United States; and
‘‘(2) transfer, encumbrance, or any other dis-
position of an interest of the debtor in property
within the territorial jurisdiction of the United
States is restrained as and to the extent that is pro-
vided for property of an estate under sections 363,
549, and 552.
Unless the court orders otherwise, the foreign representa-
tive may operate the debtor’s business and may exercise
the powers of a trustee under section 549, subject to sec-
tions 363 and 552.
‘‘(b) The scope, and the modification or termination,
of the stay and restraints referred to in subsection (a) of
this section are subject to the exceptions and limitations
provided in subsections (b), (c), and (d) of section 362,
subsections (b) and (c) of section 363, and sections 552,
555 through 557, 559, and 560.
‘‘(c) Subsection (a) of this section does not affect the
right to commence individual actions or proceedings in a
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foreign country to the extent necessary to preserve a claim
against the debtor.
‘‘(d) Subsection (a) of this section does not affect the
right of a foreign representative or an entity to file a peti-
tion commencing a case under this title or the right of
any party to file claims or take other proper actions in
such a case.
‘‘§ 621. Relief that may be granted upon recognition
of a foreign proceeding
‘‘(a) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, where necessary to effectuate the
purpose of this chapter and to protect the assets of the
debtor or the interests of the creditors, the court may, at
the request of the foreign representative, grant any appro-
priate relief, including—
‘‘(1) staying the commencement or continuation
of individual actions or individual proceedings con-
cerning the debtor’s assets, rights, obligations or li-
abilities to the extent they have not been stayed
under section 620(a);
‘‘(2) staying execution against the debtor’s as-
sets to the extent it has not been stayed under sec-
tion 620(a);
‘‘(3) suspending the right to transfer, encumber
or otherwise dispose of any assets of the debtor to
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the extent this right has not been suspended under
section 620(a);
‘‘(4) providing for the examination of witnesses,
the taking of evidence or the delivery of information
concerning the debtor’s assets, affairs, rights, obliga-
tions or liabilities;
‘‘(5) entrusting the administration or realiza-
tion of all or part of the debtor’s assets within the
territorial jurisdiction of the United States to the
foreign representative or another person, including
an examiner, authorized by the court;
‘‘(6) extending relief granted under section
619(a); and
‘‘(7) granting any additional relief that may be
available to a trustee, except for relief available
under sections 522, 544, 545, 547, 548, 550, and
724(a).
‘‘(b) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, the court may, at the request of the
foreign representative, entrust the distribution of all or
part of the debtor’s assets located in the United States
to the foreign representative or another person, including
an examiner, authorized by the court, provided that the
court is satisfied that the interests of creditors in the
United States are sufficiently protected.
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‘‘(c) In granting relief under this section to a rep-
resentative of a foreign nonmain proceeding, the court
must be satisfied that the relief relates to assets that,
under the law of the United States, should be adminis-
tered in the foreign nonmain proceeding or concerns infor-
mation required in that proceeding.
‘‘(d) The court may not enjoin a police or regulatory
act of a governmental unit, including a criminal action or
proceeding, under this section.
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a).
‘‘§ 622. Protection of creditors and other interested
persons
‘‘(a) The court may grant relief under section 619
or 621, or may modify or terminate relief under subsection
(c) of this section, only if the interests of the creditors
and other interested persons or entities, including the
debtor, are sufficiently protected.
‘‘(b) The court may subject relief granted under sec-
tion 619 or 621, or the operation of the debtor’s business
under section 620(a)(2) of this title, to conditions it con-
siders appropriate, including the giving of security or the
filing of a bond.
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‘‘(c) The court may, at the request of the foreign rep-
resentative or an entity affected by relief granted under
section 619 or 621, or at its own motion, modify or termi-
nate such relief.
‘‘(d) Section 1104(d) shall apply to the appointment
of an examiner under this chapter. Any examiner shall
comply with the qualification requirements imposed on a
trustee by section 322.
‘‘§ 623. Actions to avoid acts detrimental to creditors
‘‘(a) Upon recognition of a foreign proceeding, the
foreign representative has standing in a pending case
under another chapter of this title to initiate actions under
sections 522, 544, 545, 547, 548, 550, and 724(a).
‘‘(b) When the foreign proceeding is a foreign
nonmain proceeding, the court must be satisfied that an
action under subsection (a) of this section relates to assets
that, under United States law, should be administered in
the foreign nonmain proceeding.
‘‘§ 624. Intervention by a foreign representative
‘‘Upon recognition of a foreign proceeding, the for-
eign representative may intervene in any proceedings in
a State or Federal court in the United States in which
the debtor is a party.
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‘‘SUBCHAPTER IV—COOPERATION WITH FOR-
EIGN COURTS AND FOREIGN REPRESENTA-
TIVES
‘‘§ 625. Cooperation and direct communication be-
tween the court and foreign courts or for-
eign representatives
‘‘(a) Consistent with section 601, the court shall co-
operate to the maximum extent possible with foreign
courts or foreign representatives, either directly or
through the trustee.
‘‘(b) The court is entitled to communicate directly
with, or to request information or assistance directly from,
foreign courts or foreign representatives, subject to the
rights of parties in interest to notice and participation.
‘‘§ 626. Cooperation and direct communication be-
tween the trustee and foreign courts or
foreign representatives
‘‘(a) Consistent with section 601, the trustee or other
person, including an examiner, authorized by the court,
shall, subject to the supervision of the court, cooperate to
the maximum extent possible with foreign courts or for-
eign representatives.
‘‘(b) The trustee or other person, including an exam-
iner, authorized by the court is entitled, subject to the su-
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pervision of the court, to communicate directly with for-
eign courts or foreign representatives.
‘‘§ 627. Forms of cooperation
‘‘Cooperation referred to in sections 625 and 626
may be implemented by any appropriate means, includ-
ing—
‘‘(1) appointment of a person or body, including
an examiner, to act at the direction of the court;
‘‘(2) communication of information by any
means considered appropriate by the court;
‘‘(3) coordination of the administration and su-
pervision of the debtor’s assets and affairs;
‘‘(4) approval or implementation of agreements
concerning the coordination of proceedings; and
‘‘(5) coordination of concurrent proceedings re-
garding the same debtor.
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS
‘‘§ 628. Commencement of a case under this title after
recognition of a foreign main proceeding
‘‘After recognition of a foreign main proceeding, a
case under another chapter of this title may be commenced
only if the debtor has assets in the United States. The
effects of that case shall be restricted to the assets of the
debtor that are within the territorial jurisdiction of the
United States and, to the extent necessary to implement
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cooperation and coordination under sections 625, 626, and
627, to other assets of the debtor that are within the juris-
diction of the court under sections 541(a) of this title, and
1334(e) of title 28, to the extent that such other assets
are not subject to the jurisdiction and control of a foreign
proceeding that has been recognized under this chapter.
‘‘§ 629. Coordination of a case under this title and a
foreign proceeding
‘‘Where a foreign proceeding and a case under an-
other chapter of this title are taking place concurrently
regarding the same debtor, the court shall seek coopera-
tion and coordination under sections 625, 626, and 627,
and the following shall apply:
‘‘(1) When the case in the United States is tak-
ing place at the time the petition for recognition of
the foreign proceeding is filed—
‘‘(A) any relief granted under sections 619
or 621 must be consistent with the relief grant-
ed in the case in the United States; and
‘‘(B) even if the foreign proceeding is rec-
ognized as a foreign main proceeding, section
620 does not apply.
‘‘(2) When a case in the United States under
this title commences after recognition, or after the
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filing of the petition for recognition, of the foreign
proceeding—
‘‘(A) any relief in effect under sections 619
or 621 shall be reviewed by the court and shall
be modified or terminated if inconsistent with
the case in the United States; and
‘‘(B) if the foreign proceeding is a foreign
main proceeding, the stay and suspension re-
ferred to in section 620(a) shall be modified or
terminated if inconsistent with the relief grant-
ed in the case in the United States.
‘‘(3) In granting, extending, or modifying relief
granted to a representative of a foreign nonmain
proceeding, the court must be satisfied that the re-
lief relates to assets that, under the law of the
United States, should be administered in the foreign
nonmain proceeding or concerns information re-
quired in that proceeding.
‘‘(4) In achieving cooperation and coordination
under sections 628 and 629, the court may grant
any of the relief authorized under section 305.
‘‘§ 630. Coordination of more than 1 foreign proceed-
ing
‘‘In matters referred to in section 601, with respect
to more than 1 foreign proceeding regarding the debtor,
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the court shall seek cooperation and coordination under
sections 625, 626, and 627, and the following shall apply:
‘‘(1) Any relief granted under section 619 or
621 to a representative of a foreign nonmain pro-
ceeding after recognition of a foreign main proceed-
ing must be consistent with the foreign main pro-
ceeding.
‘‘(2) If a foreign main proceeding is recognized
after recognition, or after the filing of a petition for
recognition, of a foreign nonmain proceeding, any
relief in effect under section 619 or 621 shall be re-
viewed by the court and shall be modified or termi-
nated if inconsistent with the foreign main proceed-
ing.
‘‘(3) If, after recognition of a foreign nonmain
proceeding, another foreign nonmain proceeding is
recognized, the court shall grant, modify, or termi-
nate relief for the purpose of facilitating coordina-
tion of the proceedings.
‘‘§ 631. Presumption of insolvency based on recogni-
tion of a foreign main proceeding
‘‘In the absence of evidence to the contrary, recogni-
tion of a foreign main proceeding is for the purpose of
commencing a proceeding under section 303, proof that
the debtor is generally not paying its debts.
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‘‘§ 632. Rule of payment in concurrent proceedings
‘‘Without prejudice to secured claims or rights in
rem, a creditor who has received payment with respect to
its claim in a foreign proceeding pursuant to a law relating
to insolvency may not receive a payment for the same
claim in a case under any other chapter of this title re-
garding the debtor, so long as the payment to other credi-
tors of the same class is proportionately less than the pay-
ment the creditor has already received.’’.
(b) CLERICAL AMENDMENT.—The table of chapters
for title 11, United States Code, is amended by inserting
after the item relating to chapter 5 the following:
‘‘6. Ancillary and Other Cross-Border Cases ..........................
601’’.
SEC. 602. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11,
UNITED STATES CODE.
(a) APPLICABILITY OF CHAPTERS.—Section 103 of
title 11, United States Code, is amended—
(1) in subsection (a), by inserting before the pe-
riod the following: ‘‘and this chapter, sections 307,
555 through 557, 559, and 560 apply in a case
under chapter 6’’; and
(2) by adding at the end the following:
‘‘(j) Chapter 6 applies only in a case under that chap-
ter, except that section 605 applies to trustees and to any
other entity authorized by the court, including an exam-
iner, under chapters 7, 11, and 12, to debtors in posses-
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sion under chapters 11 and 12, and to debtors or trustees
under chapters 9 and 13 who are authorized to act under
section 605.’’.
(b) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended by striking paragraphs (23) and
(24) and inserting the following:
‘‘(23) ‘foreign proceeding’ means a collective ju-
dicial or administrative proceeding in a foreign state,
including an interim proceeding, pursuant to a law
relating to insolvency in which proceeding the assets
and affairs of the debtor are subject to control or
supervision by a foreign court, for the purpose of re-
organization or liquidation;
‘‘(24) ‘foreign representative’ means a person
or body, including a person or body appointed on an
interim basis, authorized in a foreign proceeding to
administer the reorganization or the liquidation of
the debtor’s assets or affairs or to act as a rep-
resentative of the foreign proceeding;’’.
(c) AMENDMENTS TO TITLE 28, UNITED STATES
CODE.—
(1) PROCEDURES.—Section 157(b)(2) of title
28, United States Code, is amended—
(A) in subparagraph (N), by striking
‘‘and’’ at the end;
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(B) in subparagraph (O), by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(P) recognition of foreign proceedings and
other matters under chapter 6 of title 11.’’.
(2) BANKRUPTCY CASES AND PROCEEDINGS.—
Section 1334(c)(1) of title 28, United States Code,
is amended by striking ‘‘Nothing in’’ and inserting
‘‘Except with respect to a case under chapter 6 of
title 11, nothing in’’.
(3) DUTIES OF TRUSTEES.—Section 586(a)(3)
of title 28, United States Code, is amended by in-
serting ‘‘6,’’ after ‘‘chapter’’.
TITLE VII—MISCELLANEOUS
SEC. 701. TECHNICAL AMENDMENTS.
Title 11 of the United States Code is amended—
(1) in section 109(b)(2) by striking ‘‘subsection
(c) or (d) of’’;
(2) in section 541(b)(4) by adding ‘‘or’’ at the
end; and
(3) in section 552(b)(1) by striking ‘‘product’’
each place it appears and inserting ‘‘products’’.
SEC. 702. APPLICATION OF AMENDMENTS.
Except as otherwise provided in this Act, the amend-
ments made by this this Act shall apply only with respect
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to cases commenced under title 11 of the United States
Code after the date of the enactment of this Act.
Passed the House of Representatives June 10, 1998.
Attest:
ROBIN H. CARLE,
Clerk.