H.L.C.
‘‘(7) to the extent such transfer was a bona fide
payment of a debt to a spouse, former spouse, or child
of the debtor, for alimony to, maintenance for, or sup-
port of such spouse or child, in connection with a sep-
aration agreement, divorce decree or other order of a
court of record, determination made in accordance
with State or territorial law by a governmental unit,
or property settlement agreement, but not to the ex-
tent that such debt—
‘‘(A) is assigned to another entity, volun-
tarily, by operation of law, or otherwise; or
‘‘(B) includes a liability designated as ali-
mony, maintenance, or support, unless such li-
ability is actually in the nature of alimony,
maintenance or support; or’’.
(g) APPEARANCE BEFORE COURT.—Child support
creditors or their representatives shall be permitted to ap-
pear and intervene without charge, and without meeting
any special local court rule requirement for attorney ap-
pearances, in any bankruptcy case or proceeding in any
bankruptcy court or district court of the United States if
such creditors or representatives file a form in such court
that contains information detailing the child support debt,
its status, and other characteristics.
H.L.C.
(h) CONFORMING AMENDMENTS—Title 11 of the Unit-
ed States Code is amended—
(1) in section 502(i) by striking ‘‘507(a)(7)’’ and
inserting ‘‘507(a)(8)’’,
(2) in section 503(b)(1)(B)(i) by striking
‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,
(3) 
in 
section 
523(a)(1)(A) 
by 
striking
‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’,
(4) in section 724(b)(2) by striking ‘‘or
507(a)(6)’’ and inserting ‘‘507(a)(6), or 507(a)(7)’’,
(5) in section 726(b) by striking ‘‘or (7)’’ and
inserting ‘‘, (7), or (8)’’,
(6) in section 1123(a)(1) by striking ‘‘507(a)(7)’’
and inserting ‘‘507(a)(8)’’,
(7) in section 1129(a)(9)—
(i) in subparagraph (B) by striking ‘‘or
507(a)(6)’’ and inserting ‘‘, 507(a)(6), or
507(a)(7)’’, and
(ii) in subparagraph (C) by striking
‘‘507(a)(7)’’ and inserting ‘‘507(a)(8)’’.
SEC. 305. INTEREST ON INTEREST.
(a) CHAPTER 11.—Section 1123 of title 11, United
States Code, is amended by adding at the end the following:
‘‘(d) Notwithstanding subsection (a) of this section and
sections 506(b), 1129(a)(7), and 1129(b) of this title, if it
H.L.C.
is proposed in a plan to cure a default the amount nec-
essary to cure the default shall be determined in accordance
with 
the 
underlying 
agreement 
and 
applicable
nonbankruptcy law.’’.
(b) CHAPTER 12.—Section 1222 of title 11, United
States Code, is amended by adding at the end the following:
‘‘(d) Notwithstanding subsection (b)(2) of this section
and sections 506(b) and 1225(a)(5) of this title, if it is pro-
posed in a plan to cure a default, the amount necessary
to cure the default, shall be determined in accordance with
the underlying agreement and applicable nonbankruptcy
law.’’.
(c) CHAPTER 13.—Section 1322 of title 11, United
States Code, is amended by adding at the end the following:
‘‘(e) Notwithstanding subsection (b)(2) of this section
and sections 506(b) and 1325(a)(5) of this title, if it is pro-
posed in a plan to cure a default, the amount necessary
to cure the default, shall be determined in accordance with
the underlying agreement and applicable nonbankruptcy
law.’’.
SEC. 306. EXCEPTION TO DISCHARGE.
Section 523(a)(2)(C) of title 11, United States Code,
is amended—
(1) by striking ‘‘$500’’ and inserting ‘‘$1,000’’,
(2) by striking ‘‘forty’’ and inserting ‘‘60’’, and
H.L.C.
(3) by striking ‘‘twenty’’ and inserting ‘‘60’’.
SEC. 307. PAYMENTS UNDER CHAPTER 13.
Section 1326(a)(2) of title 11, United States Code, is
amended in the second sentence by striking the period and
inserting ‘‘as soon as practicable.’’.
SEC. 308. BANKRUPTCY PETITION PREPARERS.
(a) AMENDMENT OF CHAPTER 1.—Chapter 1 of title
11, United States Code, is amended by adding at the end
the following:
‘‘§ 110. Penalty for persons who negligently or fraudu-
lently prepare bankruptcy petitions
‘‘(a) In this section—
‘‘(1) ‘bankruptcy petition preparer’ means a per-
son, other than an attorney or an employee of an at-
torney, who prepares for compensation a document
for filing; and
‘‘(2) ‘document for filing’ means a petition or
any other document prepared for filing by a debtor
in a United States bankruptcy court or a United
States district court in connection with a case under
this title.
‘‘(b)(1) A bankruptcy petition preparer who prepares
a document for filing shall sign the document and print
on the document the preparer’s name and address.
H.L.C.
‘‘(2) A bankruptcy petition preparer who fails to com-
ply with paragraph (1) may be fined not more than $500
for each such failure unless the failure is due to reasonable
cause.
‘‘(c)(1) A bankruptcy petition preparer who prepares
a document for filing shall place on the document, after the
preparer’s signature, an identifying number that identifies
individuals who prepared the document.
‘‘(2) For purposes of this section, the identifying num-
ber of a bankruptcy petition preparer shall be the Social
Security account number of each individual who prepared
the document or assisted in its preparation.
‘‘(3) A bankruptcy petition preparer who fails to com-
ply with paragraph (1) may be fined not more than $500
for each such failure unless the failure is due to reasonable
cause.
‘‘(d)(1) A bankruptcy petition preparer shall, not later
than the time at which a document for filing is presented
for the debtor’s signature, furnish to the debtor a copy of
the document.
‘‘(2) A bankruptcy petition preparer who fails to com-
ply with paragraph (1) may be fined not more than $500
for each such failure unless the failure is due to reasonable
cause.
H.L.C.
‘‘(e)(1) A bankruptcy petition preparer shall not exe-
cute any document on behalf of a debtor.
‘‘(2) A bankruptcy petition preparer may be fined not
more than $500 for each document executed in violation
of paragraph (1).
‘‘(f)(1) A bankruptcy petition preparer shall not use
the word ‘legal’ or any similar term in any advertisements,
or advertise under any category that includes the word
‘legal’ or any similar term.
‘‘(2) A bankruptcy petition preparer shall be fined not
more than $500 for each violation of paragraph (1).
‘‘(g)(1) A bankruptcy petition preparer shall not col-
lect or receive any payment from the debtor or on behalf
of the debtor for the court fees in connection with filing the
petition.
‘‘(2) A bankruptcy petition preparer shall be fined not
more than $500 for each violation of paragraph (1).
‘‘(h)(1) Within 10 days after the date of the filing of
a petition, a bankruptcy petition preparer shall file a dec-
laration under penalty of perjury disclosing any fee re-
ceived from or on behalf of the debtor within 12 months
immediately prior to the filing of the case, and any unpaid
fee charged to the debtor.
‘‘(2) The court shall disallow and order the immediate
turnover to the bankruptcy trustee of any fee referred to
H.L.C.
in paragraph (1) found to be in excess of the value of serv-
ices rendered for the documents prepared. An individual
debtor may exempt any funds so recovered under section
522(b).
‘‘(3) The debtor, the trustee, a creditor, or the United
States trustee may file a motion for an order under para-
graph (2).
‘‘(4) A bankruptcy petition preparer shall be fined not
more than $500 for each failure to comply with a court
order to turn over funds within 30 days of service of such
order.
‘‘(i)(1) If a bankruptcy case or related proceeding is
dismissed because of the failure to file bankruptcy papers,
including papers specified in section 521(1) of this title,
the negligence or intentional disregard of this title or the
Federal Rules of Bankruptcy Procedure by a bankruptcy
petition preparer, or if a bankruptcy petition preparer vio-
lates this section or commits any fraudulent, unfair, or de-
ceptive act, the bankruptcy court shall certify that fact to
the district court, and the district court, on motion of the
debtor, the trustee, or a creditor and after a hearing, shall
order the bankruptcy petition preparer to pay to the debt-
or—
‘‘(A) the debtor’s actual damages;
‘‘(B) the greater of—
H.L.C.
‘‘(i) $2,000; or
‘‘(ii) twice the amount paid by the debtor to
the bankruptcy petition preparer for the prepar-
er’s services; and
‘‘(C) reasonable attorneys’ fees and costs in mov-
ing for damages under this subsection.
‘‘(2) If the trustee or creditor moves for damages on
behalf of the debtor under this subsection, the bankruptcy
petition preparer shall be ordered to pay the movant the
additional amount of $1,000 plus reasonable attorneys’ fees
and costs incurred.
‘‘(j)(1) A debtor for whom a bankruptcy petition pre-
parer has prepared a document for filing, the trustee, a
creditor, or the United States trustee in the district in
which the bankruptcy petition preparer resides, has con-
ducted business, or the United States trustee in any other
district in which the debtor resides may bring a civil action
to enjoin a bankruptcy petition preparer from engaging in
any conduct in violation of this section or from further act-
ing as a bankruptcy petition preparer.
‘‘(2)(A) In an action under paragraph (1), if the court
finds that—
‘‘(i) a bankruptcy petition preparer has—
‘‘(I) engaged in conduct in violation of this
section or of any provision of this title a viola-
H.L.C.
tion of which subjects a person to criminal pen-
alty;
‘‘(II) misrepresented the preparer’s experi-
ence or education as a bankruptcy petition pre-
parer; or
‘‘(III) engaged in any other fraudulent, un-
fair, or deceptive conduct; and
‘‘(ii) injunctive relief is appropriate to prevent
the recurrence of such conduct,
the court may enjoin the bankruptcy petition preparer from
engaging in such conduct.
‘‘(B) If the court finds that a bankruptcy petition pre-
parer has continually engaged in conduct described in
subclause (I), (II), or (III) of clause (i) and that an injunc-
tion prohibiting such conduct would not be sufficient to pre-
vent such person’s interference with the proper administra-
tion of this title, or has not paid a penalty imposed under
this section, the court may enjoin the person from acting
as a bankruptcy petition preparer.
‘‘(3) The court shall award to a debtor, trustee, or cred-
itor that brings a successful action under this subsection
reasonable attorney’s fees and costs of the action, to be paid
by the bankruptcy petition preparer.
‘‘(k) Nothing in this section shall be construed to per-
mit activities that are otherwise prohibited by law, includ-
H.L.C.
ing rules and laws that prohibit the unauthorized practice
of law.’’.
(b) The chapter analysis for chapter 1 of title 11, Unit-
ed States Code, is amended by adding at the end the follow-
ing new item:
‘‘110. Penalty for persons who negligently or fraudulently prepare bankruptcy pe-
titions.’’.
SEC. 309. FAIRNESS TO CONDOMINIUM AND COOPERATIVE
OWNERS.
Section 523(a) of title 11, United States Code, as
amended by sections 221 and 304, is amended by adding
at the end the following:
‘‘(16) for a fee or assessment that becomes due
and payable after the order for relief to a membership
association with respect to the debtor’s interest in a
dwelling unit that has condominium ownership or in
a share of a cooperative housing corporation, but only
if such fee or assessment is payable for a period dur-
ing which—
‘‘(A) the debtor physically occupied a dwell-
ing unit in the condominium or cooperative
project; or
‘‘(B) the debtor rented the dwelling unit to
a tenant and received payments from the tenant
for such period,
H.L.C.
but nothing in this paragraph shall except from dis-
charge the debt of a debtor for a membership associa-
tion fee or assessment for a period arising before
entry of the order for relief in a pending or subse-
quent bankruptcy case.’’.
SEC. 310. NONAVOIDABILITY OF FIXING OF LIEN ON TOOLS
AND IMPLEMENTS OF TRADE, ANIMALS, AND
CROPS.
Section 522(f) of title 11, United States Code, as
amended by sections 303 and 304, is amended—
(1) in paragraph (1) by inserting ‘‘but subject to
paragraph (3)’’ after ‘‘waiver of exemptions’’, and
(2) by adding at the end the following:
‘‘(3) In a case in which State law that is applicable
to the debtor—
‘‘(A) permits a person to voluntarily waive a
right to claim exemptions under subsection (d) or
prohibits a debtor from claiming exemptions under
subsection (d); and
‘‘(B) either permits the debtor to claim exemp-
tions under State law without limitation in amount,
except to the extent that the debtor has permitted the
fixing of a consensual lien on any property or pro-
hibits avoidance of a consensual lien on property oth-
erwise eligible to be claimed as exempt property;
H.L.C.
the debtor may not avoid the fixing of a lien on an interest
of the debtor or a dependent of the debtor in property if
the lien is a nonpossessory, nonpurchase-money security in-
terest in implements, professional books, or tools of the trade
of the debtor or a dependent of the debtor or farm animals
or crops of the debtor or a dependent of the debtor to the
extent the value of such implements, professional books, tools
of the trade, animals, and crops exceeds $5,000.’’.
SEC. 311. CONVERSION OF CASE UNDER CHAPTER 13.
Section 348 of title 11, United States Code, is amended
by adding at the end the following:
‘‘(f)(1) Except as provided in paragraph (2), when a
case under chapter 13 of this title is converted to a case
under another chapter under this title—
‘‘(A) property of the estate in the converted case
shall consist of property of the estate, as of the date
of filing of the petition, that remains in the possession
of or is under the control of the debtor on the date of
conversion; and
‘‘(B) valuations of property and of allowed se-
cured claims in the chapter 13 case shall apply in the
converted case, with allowed secured claims reduced to
the extent that they have been paid in accordance
with the chapter 13 plan.
H.L.C.
‘‘(2) If the debtor converts a case under chapter 13 of
this title to a case under another chapter under this title
in bad faith, the property in the converted case shall consist
of the property of the estate as of the date of conversion.’’.
SEC. 312. BANKRUPTCY FRAUD.
(a) IN GENERAL.—
(1) OFFENSES.—Chapter 9 of title 18, United
States Code, is amended—
(A) by amending sections 152, 153, and 154
to read as follows:
‘‘§ 152. Concealment of assets; false oaths and claims;
bribery
‘‘A person who—
‘‘(1) knowingly and fraudulently conceals from a
custodian, trustee, marshal, or other officer of the
court charged with the control or custody of property,
or, in connection with a case under title 11, from
creditors or the United States Trustee, any property
belonging to the estate of a debtor;
‘‘(2) knowingly and fraudulently makes a false
oath or account in or in relation to any case under
title 11;
‘‘(3) knowingly and fraudulently makes a false
declaration, certificate, verification, or statement
under penalty of perjury as permitted under section
H.L.C.
1746 of title 28, in or in relation to any case under
title 11;
‘‘(4) knowingly and fraudulently presents any
false claim for proof against the estate of a debtor, or
uses any such claim in any case under title 11, in
a personal capacity or as or through an agent, proxy,
or attorney;
‘‘(5) knowingly and fraudulently receives any
material amount of property from a debtor after the
filing of a case under title 11, with intent to defeat
the provisions of title 11;
‘‘(6) knowingly and fraudulently gives, offers, re-
ceives, or attempts to obtain any money or property,
remuneration, compensation, reward, advantage, or
promise thereof for acting or forbearing to act in any
case under title 11;
‘‘(7) in a personal capacity or as an agent or of-
ficer of any person or corporation, in contemplation
of a case under title 11 by or against the person or
any other person or corporation, or with intent to de-
feat the provisions of title 11, knowingly and fraudu-
lently transfers or conceals any of his property or the
property of such other person or corporation;
‘‘(8) after the filing of a case under title 11 or
in contemplation thereof, knowingly and fraudulently
H.L.C.
conceals, destroys, mutilates, falsifies, or makes a false
entry in any recorded information (including books,
documents, records, and papers) relating to the prop-
erty or financial affairs of a debtor; or
‘‘(9) after the filing of a case under title 11,
knowingly and fraudulently withholds from a custo-
dian, trustee, marshal, or other officer of the court or
a United States Trustee entitled to its possession, any
recorded information (including books, documents,
records, and papers) relating to the property or fi-
nancial affairs of a debtor,
shall be fined not more than $5,000, imprisoned not more
than 5 years, or both.
‘‘§ 153. Embezzlement against estate
‘‘(a) OFFENSE.—A person described in subsection (b)
who knowingly and fraudulently appropriates to the per-
son’s own use, embezzles, spends, or transfers any property
or secretes or destroys any document belonging to the estate
of a debtor shall be fined not more than $5,000, imprisoned
not more than 5 years, or both.
‘‘(b) PERSON TO WHOM SECTION APPLIES.—A person
described in this subsection is one who has access to prop-
erty or documents belonging to an estate by virtue of the
person’s participation in the administration of the estate
as a trustee, custodian, marshal, attorney, or other officer
H.L.C.
of the court or as an agent, employee, or other person en-
gaged by such an officer to perform a service with respect
to the estate.
‘‘§ 154. Adverse interest and conduct of officers
‘‘A person who, being a custodian, trustee, marshal,
or other officer of the court—
‘‘(1) knowingly purchases, directly or indirectly,
any property of the estate of which the person is such
an officer in a case under title 11;
‘‘(2) knowingly refuses to permit a reasonable
opportunity for the inspection by parties in interest
of the documents and accounts relating to the affairs
of estates in the person’s charge by parties when di-
rected by the court to do so; or
‘‘(3) knowingly refuses to permit a reasonable
opportunity for the inspection by the United States
Trustee of the documents and accounts relating to the
affairs of an estate in the person’s charge,
shall be fined not more than $5,000 and shall forfeit the
person’s office, which shall thereupon become vacant.’’; and
(B) by adding at the end the following:
‘‘§ 156. Knowing disregard of bankruptcy law or rule
‘‘(a) DEFINITIONS.—In this section—
‘‘ ‘bankruptcy petition preparer’ means a person,
other than the debtor’s attorney or an employee of
H.L.C.
such an attorney, who prepares for compensation a
document for filing.
‘‘ ‘document for filing’ means a petition or any
other document prepared for filing by a debtor in a
United States bankruptcy court or a United States
district court in connection with a case under this
title.
‘‘(b) OFFENSE.—If a bankruptcy case or related pro-
ceeding is dismissed because of a knowing attempt by a
bankruptcy petition preparer in any manner to disregard
the requirements of title 11, United States Code, or the Fed-
eral Rules of Bankruptcy Procedure, the bankruptcy peti-
tion preparer shall be fined under this title, imprisoned not
more than 1 year, or both.
‘‘§ 157. Bankruptcy fraud
‘‘A person who, having devised or intending to devise
a scheme or artifice to defraud and for the purpose of exe-
cuting or concealing such a scheme or artifice or attempting
to do so—
‘‘(1) files a petition under title 11;
‘‘(2) files a document in a proceeding under title
11; or
‘‘(3) makes a false or fraudulent representation,
claim, or promise concerning or in relation to a pro-
ceeding under title 11, at any time before or after the