IB
Union Calendar No. 2
107TH CONGRESS
1ST SESSION
H. R. 333
[Report No. 107–3, Part I]
To amend title 11, United States Code, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 31, 2001
Mr. GEKAS (for himself, Mr. SENSENBRENNER, Mr. BOUCHER, Mr. MORAN
of Virginia, Mr. ARMEY, Mr. CHABOT, Mr. GRAHAM, Mr. BARR of Geor-
gia, Mr. ANDREWS, Mr. BARTON of Texas, Mr. BENTSEN, Mr. BEREU-
TER, Ms. BERKLEY, Mr. BURTON of Indiana, Mr. BUYER, Mr. CAMP, Mr.
CASTLE, Mr. COOKSEY, Mr. CRAMER, Mr. CUNNINGHAM, Mrs. DAVIS of
California, Mr. DOOLEY of California, Mr. DREIER, Mr. EHRLICH, Mr.
ENGLISH, Mr. FOLEY, Mr. FROST, Mr. GOODE, Mr. GOODLATTE, Mr.
HILLEARY, Mr. HOLDEN, Ms. EDDIE BERNICE JOHNSON of Texas, Mrs.
KELLY, Mr. KLECZKA, Mr. LINDER, Mr. LUCAS of Kentucky, Mr.
MALONEY
of Connecticut, Mr. MENENDEZ, Mrs. MYRICK, Mr.
NETHERCUTT, Mrs. NORTHUP, Mr. OXLEY, Ms. PRYCE of Ohio, Mr.
ROTHMAN, Mr. ROYCE, Mr. SIMPSON, Mr. SISISKY, Mr. SMITH of Michi-
gan, Mr. SMITH
of Washington, Mr. STUMP, Mr. SUNUNU, Mr.
SWEENEY, Mrs. TAUSCHER, Mr. TERRY, Mr. UPTON, Mr. WELDON of
Florida, and Mr. WELLER) introduced the following bill; which was re-
ferred to the Committee on the Judiciary, and in addition to the Com-
mittee on Financial Services, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
FEBRUARY 26, 2001
Additional Sponsors: Mr. NEY, Mr. BARCIA, Mr. ROEMER, Mr. TOM DAVIS
of Virginia, Mr. ISSA, Mr. CROWLEY, Mr. GORDON, Mr. PETERSON of
Pennsylvania, Mr. BROWN of South Carolina, Mr. POMBO, and Mr.
DAVIS of Florida
FEBRUARY 26, 2001
Reported from the Committee on the Judiciary with amendments
[Omit the part struck through and insert the part printed in italic]
FEBRUARY 26, 2001
Referral to the Committee on Financial Services extended for a period ending
not later than February 26, 2001
FEBRUARY 26, 2001
The Committee on Financial Services discharged; referred to the Committee
of the Whole House on the State of the Union and ordered to be printed
A BILL
To amend title 11, United States Code, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CON-
TENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Bankruptcy Abuse Prevention and Consumer Protection
Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; references; table of contents.
TITLE I—NEEDS-BASED BANKRUPTCY
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Sense of Congress and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
Sec. 107. Schedules of reasonable and necessary expenses.
TITLE II—ENHANCED CONSUMER PROTECTION
Subtitle A—Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation practices.
Subtitle B—Priority Child Support
Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases involving
domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation pro-
ceedings.
Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential transfer
motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and loans.
Subtitle C—Other Consumer Protections
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
TITLE III—DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not complete in-
tended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Residency requirement for homestead exemption.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide required infor-
mation.
Sec. 317. Adequate time to prepare for hearing on confirmation of the plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the Federal
Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitation.
Sec. 323. Excluding employee benefit plan participant contributions and other
property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
TITLE IV—GENERAL AND SMALL BUSINESS BANKRUPTCY
PROVISIONS
Subtitle A—General Business Bankruptcy Provisions
Sec. 401. Adequate protection for investors.
Sec. 402. Meetings of creditors and equity security holders.
Sec. 403. Protection of refinance of security interest.
Sec. 404. Executory contracts and unexpired leases.
Sec. 405. Creditors and equity security holders committees.
Sec. 406. Amendment to section 546 of title 11, United States Code.
Sec. 407. Amendments to section 330(a) of title 11, United States Code.
Sec. 408. Postpetition disclosure and solicitation.
Sec. 409. Preferences.
Sec. 410. Venue of certain proceedings.
Sec. 411. Period for filing plan under chapter 11.
Sec. 412. Fees arising from certain ownership interests.
Sec. 413. Creditor representation at first meeting of creditors.
Sec. 414. Definition of disinterested person.
Sec. 415. Factors for compensation of professional persons.
Sec. 416. Appointment of elected trustee.
Sec. 417. Utility service.
Sec. 418. Bankruptcy fees.
Sec. 419. More complete information regarding assets of the estate.
Subtitle B—Small Business Bankruptcy Provisions
Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment of
trustee.
Sec. 443. Study of operation of title 11, United States Code, with respect to
small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.
TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI—BANKRUPTCY DATA
Sec. 601. Improved bankruptcy statistics.
Sec. 602. Uniform rules for the collection of bankruptcy data.
Sec. 603. Audit procedures.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.
TITLE VII—BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate’s liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and local taxes.
Sec. 720. Dismissal for failure to timely file tax returns.
TITLE VIII—ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Other amendments to titles 11 and 28, United States Code.
TITLE IX—FINANCIAL CONTRACT PROVISIONS
Sec. 901. Treatment of certain agreements by conservators or receivers of in-
sured depository institutions.
Sec. 902. Authority of the corporation with respect to failed and failing institu-
tions.
Sec. 903. Amendments relating to transfers of qualified financial contracts.
Sec. 904. Amendments relating to disaffirmance or repudiation of qualified fi-
nancial contracts.
Sec. 905. Clarifying amendment relating to master agreements.
Sec. 906. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 907. Bankruptcy Code amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
Sec. 912. Asset-backed securitizations.
Sec. 913. Effective date; application of amendments.
TITLE X—PROTECTION OF FAMILY FARMERS
Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
TITLE XI—HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health care busi-
ness and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to automatic stay.
TITLE XII—TECHNICAL AMENDMENTS
Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare bank-
ruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Discharge under chapter 12.
Sec. 1220. Bankruptcy cases and proceedings.
Sec. 1221. Knowing disregard of bankruptcy law or rule.
Sec. 1222. Transfers made by nonprofit charitable corporations.
Sec. 1223. Protection of valid purchase money security interests.
Sec. 1224. Bankruptcy judgeships.
Sec. 1225. Compensating trustees.
Sec. 1226. Amendment to section 362 of title 11, United States Code.
Sec. 1227. Judicial education.
Sec. 1228. Reclamation.
Sec. 1229. Providing requested tax documents to the court.
Sec. 1230. Encouraging creditworthiness.
Sec. 1231. Property no longer subject to redemption.
Sec. 1232. Trustees.
Sec. 1233. Bankruptcy forms.
Sec. 1234. Expedited appeals of bankruptcy cases to courts of appeals.
Sec. 1235. Exemptions.
TITLE XIII—CONSUMER CREDIT DISCLOSURE
Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a dwelling.
Sec. 1303. Disclosures related to ‘‘introductory rates’’.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent stu-
dents.
Sec. 1309. Clarification of clear and conspicuous.
Sec. 1310. Enforcement of certain foreign judgments barred.
TITLE XIV—GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
Sec. 1401. Effective date; application of amendments.
TITLE I—NEEDS-BASED
BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is
amended by inserting ‘‘or consents to’’ after ‘‘requests’’.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL.—Section 707 of title 11, United
States Code, is amended—
(1) by striking the section heading and insert-
ing the following:
‘‘§ 707. Dismissal of a case or conversion to a case
under chapter 11 or 13’’;
and
(2) in subsection (b)—
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’;
(B) in paragraph (1), as redesignated by
subparagraph (A) of this paragraph—
(i) in the first sentence—
(I) by striking ‘‘but not at the re-
quest or suggestion of’’ and inserting
‘‘trustee, bankruptcy administrator,
or’’;
(II) by inserting ‘‘, or, with the
debtor’s consent, convert such a case
to a case under chapter 11 or 13 of
this title,’’ after ‘‘consumer debts’’;
and
(III) by striking ‘‘a substantial
abuse’’ and inserting ‘‘an abuse’’; and
(ii) by striking the next to last sen-
tence; and
(C) by adding at the end the following:
‘‘(2)(A)(i) In considering under paragraph (1) wheth-
er the granting of relief would be an abuse of the provi-
sions of this chapter, the court shall presume abuse exists
if the debtor’s current monthly income reduced by the
amounts determined under clauses (ii), (iii), and (iv), and
multiplied by 60 is not less than the lesser of—
‘‘(I) 25 percent of the debtor’s nonpriority un-
secured claims in the case, or $6,000, whichever is
greater; or
‘‘(II) $10,000.
‘‘(ii)(I) The debtor’s monthly expenses shall be the
debtor’s applicable monthly expense amounts specified
under the National Standards and Local Standards, and
the debtor’s actual monthly expenses for the categories
specified as Other Necessary Expenses issued by the In-
ternal Revenue Service for the area in which the debtor
resides, as in effect on the date of the entry of the order
for relief, for the debtor, the dependents of the debtor,
and the spouse of the debtor in a joint case, if the spouse
is not otherwise a dependent. Notwithstanding any other
provision of this clause, the monthly expenses of the debt-
or shall not include any payments for debts. In addition,
the debtor’s monthly expenses shall include the debtor’s
reasonably necessary expenses incurred to maintain the
safety of the debtor and the family of the debtor from fam-
ily violence as identified under section 309 of the Family
Violence Prevention and Services Act (42 U.S.C. 10408),
or other applicable Federal law. The expenses included in
the debtor’s monthly expenses described in the preceding
sentence shall be kept confidential by the court. In addi-
tion, if it is demonstrated that it is reasonable and nec-
essary, the debtor’s monthly expenses may also include an
additional allowance for food and clothing of up to 5 per-
cent of the food and clothing categories as specified by
the National Standards issued by the Internal Revenue
Service.
‘‘(II) In addition, the debtor’s monthly expenses may
include, if applicable, the continuation of actual expenses
paid by the debtor that are reasonable and necessary for
care and support of an elderly, chronically ill, or disabled
household member or member of the debtor’s immediate
family (including parents, grandparents, and siblings of
the debtor, the dependents of the debtor, and the spouse
of the debtor in a joint case) who is not a dependent and
who is unable to pay for such reasonable and necessary
expenses.
‘‘(III) In addition, for a debtor eligible for chapter
13, the debtor’s monthly expenses may include the actual
administrative expenses of administering a chapter 13
plan for the district in which the debtor resides, up to an
amount of 10 percent of the projected plan payments, as
determined under schedules issued by the Executive Office
for United States Trustees.
‘‘(IV) In addition, the debtor’s monthly expenses may
include the actual expenses for each dependent child under
the age of 18 years up to $1,500 per year per child to
attend a private elementary or secondary school, if the
debtor provides documentation of such expenses and a de-
tailed explanation of why such expenses are reasonable
and necessary.
‘‘(iii) The debtor’s average monthly payments on ac-
count of secured debts shall be calculated as—
‘‘(I) the sum of—
‘‘(aa) the total of all amounts scheduled as
contractually due to secured creditors in each
month of the 60 months following the date of
the petition; and
‘‘(bb) any additional payments to secured
creditors necessary for the debtor, in filing a
plan under chapter 13 of this title, to maintain
possession of the debtor’s primary residence,
motor vehicle, or other property necessary for
the support of the debtor and the debtor’s de-
pendents, that serves as collateral for secured
debts; divided by
‘‘(II) 60.
‘‘(iv) The debtor’s expenses for payment of all pri-
ority claims (including priority child support and alimony
claims) shall be calculated as—
‘‘(I) the total amount of debts entitled to pri-
ority; divided by
‘‘(II) 60.
‘‘(B)(i) In any proceeding brought under this sub-
section, the presumption of abuse may only be rebutted
by demonstrating special circumstances that justify addi-
tional expenses or adjustments of current monthly income
for which there is no reasonable alternative.
‘‘(ii) In order to establish special circumstances, the
debtor shall be required to—
‘‘(I) itemize each additional expense or adjust-
ment of income; and
‘‘(II) provide—
‘‘(aa) documentation for such expense or
adjustment to income; and
‘‘(bb) a detailed explanation of the special
circumstances that make such expenses or ad-
justment to income necessary and reasonable.
‘‘(iii) The debtor shall attest under oath to the accu-
racy of any information provided to demonstrate that ad-
ditional expenses or adjustments to income are required.
‘‘(iv) The presumption of abuse may only be rebutted
if the additional expenses or adjustments to income re-
ferred to in clause (i) cause the product of the debtor’s
current monthly income reduced by the amounts deter-
mined under clauses (ii), (iii), and (iv) of subparagraph
(A) when multiplied by 60 to be less than the lesser of—
‘‘(I) 25 percent of the debtor’s nonpriority un-
secured claims, or $6,000, whichever is greater; or
‘‘(II) $10,000.
‘‘(C) As part of the schedule of current income and
expenditures required under section 521, the debtor shall
include a statement of the debtor’s current monthly in-
come, and the calculations that determine whether a pre-
sumption arises under subparagraph (A)(i), that shows
how each such amount is calculated.
‘‘(3) In considering under paragraph (1) whether the
granting of relief would be an abuse of the provisions of
this chapter in a case in which the presumption in sub-
paragraph (A)(i) of such paragraph does not apply or has
been rebutted, the court shall consider—
‘‘(A) whether the debtor filed the petition in
bad faith; or
‘‘(B) the totality of the circumstances (includ-
ing whether the debtor seeks to reject a personal
services contract and the financial need for such re-
jection as sought by the debtor) of the debtor’s fi-
nancial situation demonstrates abuse.
‘‘(4)(A) The court shall order the counsel for the
debtor to reimburse the trustee for all reasonable costs
in prosecuting a motion brought under section 707(b), in-
cluding reasonable attorneys’ fees, if—
‘‘(i) a trustee appointed under section 586(a)(1)
of title 28 or from a panel of private trustees main-
tained by the bankruptcy administrator brings a mo-
tion for dismissal or conversion under this sub-
section; and
‘‘(ii) the court—
‘‘(I) grants that motion; and
‘‘(II) finds that the action of the counsel
for the debtor in filing under this chapter vio-
lated rule 9011 of the Federal Rules of Bank-
ruptcy Procedure.
‘‘(B) If the court finds that the attorney for the debt-
or violated rule 9011 of the Federal Rules of Bankruptcy
Procedure, at a minimum, the court shall order—
‘‘(i) the assessment of an appropriate civil pen-
alty against the counsel for the debtor; and
‘‘(ii) the payment of the civil penalty to the
trustee, the United States trustee, or the bankruptcy
administrator.
‘‘(C) In the case of a petition, pleading, or written
motion, the signature of an attorney shall constitute a cer-
tification that the attorney has—
‘‘(i) performed a reasonable investigation into
the circumstances that gave rise to the petition,
pleading, or written motion; and
‘‘(ii) determined that the petition, pleading, or
written motion—
‘‘(I) is well grounded in fact; and
‘‘(II) is warranted by existing law or a
good faith argument for the extension, modi-
fication, or reversal of existing law and does not
constitute an abuse under paragraph (1).
‘‘(D) The signature of an attorney on the petition
shall constitute a certification that the attorney has no
knowledge after an inquiry that the information in the
schedules filed with such petition is incorrect.
‘‘(5)(A) Except as provided in subparagraph (B) and
subject to paragraph (6), the court may award a debtor
all reasonable costs (including reasonable attorneys’ fees)
in contesting a motion brought by a party in interest
(other than a trustee, United States trustee, or bank-
ruptcy administrator) under this subsection if—
‘‘(i) the court does not grant the motion; and
‘‘(ii) the court finds that—
‘‘(I) the position of the party that brought
the motion violated rule 9011 of the Federal
Rules of Bankruptcy Procedure; or
‘‘(II) the party brought the motion solely
for the purpose of coercing a debtor into
waiving a right guaranteed to the debtor under
this title.
‘‘(B) A small business that has a claim of an aggre-
gate amount less than $1,000 shall not be subject to sub-
paragraph (A)(ii)(I).
‘‘(C) For purposes of this paragraph—
‘‘(i) the term ‘small business’ means an unin-
corporated business, partnership, corporation, asso-
ciation, or organization that—
‘‘(I) has less than 25 full-time employees
as determined on the date the motion is filed;
and
‘‘(II) is engaged in commercial or business
activity; and
‘‘(ii) the number of employees of a wholly
owned subsidiary of a corporation includes the em-
ployees of—
‘‘(I) a parent corporation; and
‘‘(II) any other subsidiary corporation of
the parent corporation.
‘‘(6) Only the judge, United States trustee, or bank-
ruptcy administrator may bring a motion under section
707(b), if the current monthly income of the debtor, or
in a joint case, the debtor and the debtor’s spouse, as of
the date of the order for relief, when multiplied by 12,
is equal to or less than—
‘‘(A) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner last reported by the Bureau of
the Census;
‘‘(B) in the case of a debtor in a household of
2, 3, or 4 individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals last reported by the Bu-
reau of the Census; or
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or
fewer individuals last reported by the Bureau of the
Census, plus $525 per month for each individual in
excess of 4.
‘‘(7) No judge, United States trustee, panel trustee,
bankruptcy administrator or other party in interest may
bring a motion under paragraph (2), if the current month-
ly income of the debtor and the debtor’s spouse combined,
as of the date of the order for relief when multiplied by
12, is equal to or less than—
‘‘(A) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner last reported by the Bureau of
the Census;
‘‘(B) in the case of a debtor in a household of
2, 3, or 4 individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals last reported by the Bu-
reau of the Census; or
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or
fewer individuals last reported by the Bureau of the
Census, plus $525 per month for each individual in
excess of 4.’’.
(b) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (10)
the following:
‘‘(10A) ‘current monthly income’—
‘‘(A) means the average monthly income
from all sources which the debtor, or in a joint
case, the debtor and the debtor’s spouse, receive
without regard to whether the income is taxable
income, derived during the 6-month period pre-
ceding the date of determination; and
‘‘(B) includes any amount paid by any en-
tity other than the debtor (or, in a joint case,
the debtor and the debtor’s spouse), on a reg-
ular basis to the household expenses of the
debtor or the debtor’s dependents (and, in a
joint case, the debtor’s spouse if not otherwise
a dependent), but excludes benefits received
under the Social Security Act and payments to
victims of war crimes or crimes against human-
ity on account of their status as victims of such
crimes;’’.
(c) UNITED STATES TRUSTEE AND BANKRUPTCY
ADMINISTRATOR DUTIES.—Section 704 of title 11, United
States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The trustee
shall—’’; and
(2) by adding at the end the following:
‘‘(b)(1) With respect to an individual debtor under
this chapter—
‘‘(A) the United States trustee or bankruptcy
administrator shall review all materials filed by the
debtor and, not later than 10 days after the date of
the first meeting of creditors, file with the court a
statement as to whether the debtor’s case would be
presumed to be an abuse under section 707(b); and
‘‘(B) not later than 5 days after receiving a
statement under subparagraph (A), the court shall
provide a copy of the statement to all creditors.
‘‘(2) The United States trustee or bankruptcy admin-
istrator shall, not later than 30 days after the date of fil-
ing a statement under paragraph (1), either file a motion
to dismiss or convert under section 707(b) or file a state-
ment setting forth the reasons the United States trustee
or bankruptcy administrator does not believe that such a
motion would be appropriate, if the United States trustee
or bankruptcy administrator determines that the debtor’s
case should be presumed to be an abuse under section
707(b) and the product of the debtor’s current monthly
income, multiplied by 12 is not less than—
‘‘(A) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner last reported by the Bureau of
the Census; or
‘‘(B) in the case of a debtor in a household of
2 or more individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals last reported by the Bu-
reau of the Census.
‘‘(3) In any case in which a motion to dismiss or con-
vert, or a statement is required to be filed by this sub-
section, the United States trustee or bankruptcy adminis-
trator may decline to file a motion to dismiss or convert
pursuant to section 704(b)(2) if the product of the debt-
or’s current monthly income multiplied by 12 exceeds 100
percent, but does not exceed 150 percent of—
‘‘(A)(i) in the case of a debtor in a household
of 1 person, the median family income of the appli-
cable State for 1 earner last reported by the Bureau
of the Census; or
‘‘(ii) in the case of a debtor in a household of
2 or more individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals last reported by the Bu-
reau of the Census; and
‘‘(B) the product of the debtor’s current month-
ly income, reduced by the amounts determined under
section 707(b)(2)(A)(ii) (except for the amount cal-
culated under the other necessary expenses standard
issued by the Internal Revenue Service) and clauses
(iii) and (iv) of section 707(b)(2)(A), multiplied by
60 is less than the lesser of—
‘‘(i) 25 percent of the debtor’s nonpriority
unsecured claims in the case or $6,000, which-
ever is greater; or
‘‘(ii) $10,000.’’.
(d) NOTICE.—Section 342 of title 11, United States
Code, is amended by adding at the end the following:
‘‘(d) In an individual case under chapter 7 in which
the presumption of abuse is triggered under section
707(b), the clerk shall give written notice to all creditors
not later than 10 days after the date of the filing of the
petition that the presumption of abuse has been trig-
gered.’’.
(e) NONLIMITATION OF INFORMATION.—Nothing in
this title shall limit the ability of a creditor to provide in-
formation to a judge (except for information commu-
nicated ex parte, unless otherwise permitted by applicable
law), United States trustee, bankruptcy administrator or
trustee.
(f) DISMISSAL FOR CERTAIN CRIMES.—Section 707
of title 11, United States Code, as amended by this sec-
tion, is amended by adding at the end the following:
‘‘(c)(1) In this subsection—
‘‘(A) the term ‘crime of violence’ has the mean-
ing given that term in section 16 of title 18; and
‘‘(B) the term ‘drug trafficking crime’ has the
meaning given that term in section 924(c)(2) of title
18.
‘‘(2) Except as provided in paragraph (3), after no-
tice and a hearing, the court, on a motion by the victim
of a crime of violence or a drug trafficking crime, may
when it is in the best interest of the victims dismiss a
voluntary case filed by an individual debtor under this
chapter if that individual was convicted of that crime.
‘‘(3) The court may not dismiss a case under para-
graph (2) if the debtor establishes by a preponderance of
the evidence that the filing of a case under this chapter
is necessary to satisfy a claim for a domestic support obli-
gation.’’.
(g) CONFIRMATION OF PLAN.—Section 1325(a) of
title 11, United States Code, is amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
(2) in paragraph (6), by striking the period and
inserting a semicolon; and
(3) by adding at the end the following:
‘‘(7) the action of the debtor in filing the peti-
tion was in good faith;’’.
(h) APPLICABILITY OF MEANS TEST TO CHAPTER
13.—Section 1325(b) of title 11, United States Code, is
amended—
(1) in paragraph (1)(B), by inserting ‘‘to unse-
cured creditors’’ after ‘‘to make payments’’; and
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) For purposes of this subsection, the term
‘disposable income’ means current monthly income
received by the debtor (other than child support pay-
ments, foster care payments, or disability payments
for a dependent child made in accordance with appli-
cable nonbankruptcy law to the extent reasonably
necessary to be expended for such child) less
amounts reasonably necessary to be expended—
‘‘(A) for the maintenance or support of the
debtor or a dependent of the debtor or for a do-
mestic support obligation that first becomes
payable after the date the petition is filed and
for charitable contributions (that meet the defi-
nition of ‘charitable contribution’ under section
548(d)(3) to a qualified religious or charitable
entity or organization (as that term is defined
in section 548(d)(4)) in an amount not to ex-
ceed 15 percent of gross income of the debtor
for the year in which the contributions are
made; and
‘‘(B) if the debtor is engaged in business,
for the payment of expenditures necessary for
the continuation, preservation, and operation of
such business.
‘‘(3) Amounts reasonably necessary to be ex-
pended under paragraph (2) shall be determined in
accordance with subparagraphs (A) and (B) of sec-
tion 707(b)(2), if the debtor has current monthly in-
come, when multiplied by 12, greater than—
‘‘(A) in the case of a debtor in a household
of 1 person, the median family income of the
applicable State for 1 earner last reported by
the Bureau of the Census;
‘‘(B) in the case of a debtor in a household
of 2, 3, or 4 individuals, the highest median
family income of the applicable State for a fam-
ily of the same number or fewer individuals last
reported by the Bureau of the Census; or
‘‘(C) in the case of a debtor in a household
exceeding 4 individuals, the highest median
family income of the applicable State for a fam-
ily of 4 or fewer individuals last reported by the
Bureau of the Census, plus $525 per month for
each individual in excess of 4.’’.
(i) CLERICAL AMENDMENT.—The table of sections
for chapter 7 of title 11, United States Code, is amended
by striking the item relating to section 707 and inserting
the following:
‘‘707. Dismissal of a case or conversion to a case under chapter 11 or 13.’’.
SEC. 103. SENSE OF CONGRESS AND STUDY.
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that the Secretary of the Treasury has the authority
to alter the Internal Revenue Service standards estab-
lished to set guidelines for repayment plans as needed to
accommodate their use under section 707(b) of title 11,
United States Code.
(b) STUDY.—
(1) IN GENERAL.—Not later than 2 years after
the date of enactment of this Act, the Director of
the Executive Office for United States Trustees shall
submit a report to the Committee on the Judiciary
of the Senate and the Committee on the Judiciary
of the House of Representatives containing the find-
ings of the Director regarding the utilization of In-
ternal Revenue Service standards for determining—
(A) the current monthly expenses of a
debtor under section 707(b) of title 11, United
States Code; and
(B) the impact that the application of such
standards has had on debtors and on the bank-
ruptcy courts.
(2) RECOMMENDATION.—The report under
paragraph (1) may include recommendations for
amendments to title 11, United States Code, that
are consistent with the findings of the Director
under paragraph (1).
SEC. 104. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is
amended to read as follows:
‘‘(b) Before the commencement of a case under this
title by an individual whose debts are primarily consumer
debts, the clerk shall give to such individual written notice
containing—
‘‘(1) a brief description of—
‘‘(A) chapters 7, 11, 12, and 13 and the
general purpose, benefits, and costs of pro-
ceeding under each of those chapters; and
‘‘(B) the types of services available from
credit counseling agencies; and
‘‘(2) statements specifying that—
‘‘(A) a person who knowingly and fraudu-
lently conceals assets or makes a false oath or
statement under penalty of perjury in connec-
tion with a bankruptcy case shall be subject to
fine, imprisonment, or both; and
‘‘(B) all information supplied by a debtor
in connection with a bankruptcy case is subject
to examination by the Attorney General.’’.
SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING
TEST PROGRAM.
(a) DEVELOPMENT
OF FINANCIAL MANAGEMENT
AND TRAINING CURRICULUM AND MATERIALS.—The Di-
rector of the Executive Office for United States Trustees
(in this section referred to as the ‘‘Director’’) shall consult
with a wide range of individuals who are experts in the
field of debtor education, including trustees who are ap-
pointed under chapter 13 of title 11, United States Code,
and who operate financial management education pro-
grams for debtors, and shall develop a financial manage-
ment training curriculum and materials that can be used
to educate individual debtors on how to better manage
their finances.
(b) TEST.—
(1) SELECTION OF DISTRICTS.—The Director
shall select 6 judicial districts of the United States
in which to test the effectiveness of the financial
management training curriculum and materials de-
veloped under subsection (a).
(2) USE.—For an 18-month period beginning
not later than 270 days after the date of enactment
of this Act, such curriculum and materials shall be,
for the 6 judicial districts selected under paragraph
(1), used as the instructional course concerning per-
sonal financial management for purposes of section
111 of title 11, United States Code.
(c) EVALUATION.—
(1) IN GENERAL.—During the 18-month period
referred to in subsection (b), the Director shall
evaluate the effectiveness of—
(A) the financial management training cur-
riculum and materials developed under sub-
section (a); and
(B) a sample of existing consumer edu-
cation programs such as those described in the
Report of the National Bankruptcy Review
Commission (October 20, 1997) that are rep-
resentative of consumer education programs
carried out by the credit industry, by trustees
serving under chapter 13 of title 11, United
States Code, and by consumer counseling
groups.
(2) REPORT.—Not later than 3 months after
concluding such evaluation, the Director shall sub-
mit a report to the Speaker of the House of Rep-
resentatives and the President pro tempore of the
Senate, for referral to the appropriate committees of
the Congress, containing the findings of the Director
regarding the effectiveness of such curriculum, such
materials, and such programs and their costs.
SEC. 106. CREDIT COUNSELING.
(a) WHO MAY BE A DEBTOR.—Section 109 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(h)(1) Subject to paragraphs (2) and (3), and not-
withstanding any other provision of this section, an indi-
vidual may not be a debtor under this title unless that
individual has, during the 180-day period preceding the
date of filing of the petition of that individual, received
from an approved nonprofit budget and credit counseling
agency described in section 111(a) an individual or group
briefing (including a briefing conducted by telephone or
on the Internet) that outlined the opportunities for avail-
able credit counseling and assisted that individual in per-
forming a related budget analysis.
‘‘(2)(A) Paragraph (1) shall not apply with respect
to a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
nonprofit budget and credit counseling agencies for that
district are not reasonably able to provide adequate serv-
ices to the additional individuals who would otherwise seek
credit counseling from that agency by reason of the re-
quirements of paragraph (1).
‘‘(B) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
paragraph (A) shall review that determination not later
than 1 year after the date of that determination, and not
less frequently than every year thereafter. Notwith-
standing the preceding sentence, a nonprofit budget and
credit counseling service may be disapproved by the
United States trustee or bankruptcy administrator at any
time.
‘‘(3)(A) Subject to subparagraph (B), the require-
ments of paragraph (1) shall not apply with respect to
a debtor who submits to the court a certification that—
‘‘(i) describes exigent circumstances that merit
a waiver of the requirements of paragraph (1);
‘‘(ii) states that the debtor requested credit
counseling services from an approved nonprofit
budget and credit counseling agency, but was unable
to obtain the services referred to in paragraph (1)
during the 5-day period beginning on the date on
which the debtor made that request; and
‘‘(iii) is satisfactory to the court.
‘‘(B) With respect to a debtor, an exemption under
subparagraph (A) shall cease to apply to that debtor on
in subparagraph (A) shall review that determination
not later than 1 year after the date of that deter-
mination, and not less frequently than every year
thereafter.’’.
(c) CHAPTER 13 DISCHARGE.—Section 1328 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(g) The court shall not grant a discharge under this
section to a debtor, unless after filing a petition the debtor
has completed an instructional course concerning personal
financial management described in section 111.
‘‘(h) Subsection (g) shall not apply with respect to
a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
instructional courses are not adequate to service the addi-
tional individuals who would be required to complete the
instructional course by reason of the requirements of this
section.
‘‘(i) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
section (h) shall review that determination not later than
1 year after the date of that determination, and not less
frequently than every year thereafter.’’.
(d) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The debtor
shall—’’; and
(2) by adding at the end the following:
‘‘(b) In addition to the requirements under subsection
(a), an individual debtor shall file with the court—
‘‘(1) a certificate from the approved nonprofit
budget and credit counseling agency that provided
the debtor services under section 109(h) describing
the services provided to the debtor; and
‘‘(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the ap-
proved nonprofit budget and credit counseling agen-
cy referred to in paragraph (1).’’.
(e) GENERAL PROVISIONS.—
(1) IN GENERAL.—Chapter 1 of title 11, United
States Code, is amended by adding at the end the
following:
‘‘§ 111. Credit counseling services; financial manage-
ment instructional courses
‘‘(a) The clerk of each district shall maintain a pub-
licly available list of—
‘‘(1) credit counseling agencies that provide 1
or more programs described in section 109(h) cur-
rently approved by the United States trustee or the
bankruptcy administrator for the district, as applica-
ble; and
‘‘(2) instructional courses concerning personal
financial management currently approved by the
United States trustee or the bankruptcy adminis-
trator for the district, as applicable.
‘‘(b) The United States trustee or bankruptcy admin-
istrator shall only approve a credit counseling agency or
instructional course concerning personal financial manage-
ment as follows:
‘‘(1) The United States trustee or bankruptcy
administrator shall have thoroughly reviewed the
qualifications of the credit counseling agency or of
the provider of the instructional course under the
standards set forth in this section, and the programs
or instructional courses which will be offered by such
agency or provider, and may require an agency or
provider of an instructional course which has sought
approval to provide information with respect to such
review.
‘‘(2) The United States trustee or bankruptcy
administrator shall have determined that the credit
counseling agency or course of instruction fully sat-
isfies the applicable standards set forth in this sec-
tion.
‘‘(3) When an agency or course of instruction
is initially approved, such approval shall be for a
probationary period not to exceed 6 months. An
agency or course of instruction is initially approved
if it did not appear on the approved list for the dis-
trict under subsection (a) immediately prior to ap-
proval.
‘‘(4) At the conclusion of the probationary pe-
riod under paragraph (3), the United States trustee
or bankruptcy administrator may only approve for
an additional 1-year period, and for successive 1-
year periods thereafter, any agency or course of in-
struction which has demonstrated during the proba-
tionary or subsequent period that such agency or
course of instruction—
‘‘(A) has met the standards set forth under
this section during such period; and
‘‘(B) can satisfy such standards in the fu-
ture.
‘‘(5) Not later than 30 days after any final de-
cision under paragraph (4), that occurs either after
the expiration of the initial probationary period, or
after any 2-year period thereafter, an interested per-
son may seek judicial review of such decision in the
appropriate United States District Court.
‘‘(c)(1) The United States trustee or bankruptcy ad-
ministrator shall only approve a credit counseling agency
that demonstrates that it will provide qualified counselors,
maintain adequate provision for safekeeping and payment
of client funds, provide adequate counseling with respect
to client credit problems, and deal responsibly and effec-
tively with other matters as relate to the quality, effective-
ness, and financial security of such programs.
‘‘(2) To be approved by the United States trustee or
bankruptcy administrator, a credit counseling agency
shall, at a minimum—
‘‘(A) be a nonprofit budget and credit coun-
seling agency, the majority of the board of directors
of which—
‘‘(i) are not employed by the agency; and
‘‘(ii) will not directly or indirectly benefit
financially from the outcome of a credit coun-
seling session;
‘‘(B) if a fee is charged for counseling services,
charge a reasonable fee, and provide services without
regard to ability to pay the fee;
‘‘(C) provide for safekeeping and payment of
client funds, including an annual audit of the trust
accounts and appropriate employee bonding;
‘‘(D) provide full disclosures to clients, includ-
ing funding sources, counselor qualifications, pos-
sible impact on credit reports, and any costs of such
program that will be paid by the debtor and how
such costs will be paid;
‘‘(E) provide adequate counseling with respect
to client credit problems that includes an analysis of
their current situation, what brought them to that
financial status, and how they can develop a plan to
handle the problem without incurring negative amor-
tization of their debts;
‘‘(F) provide trained counselors who receive no
commissions or bonuses based on the counseling ses-
sion outcome, and who have adequate experience,
and have been adequately trained to provide coun-
seling services to individuals in financial difficulty,
including the matters described in subparagraph
(E);
‘‘(G) demonstrate adequate experience and
background in providing credit counseling; and
‘‘(H) have adequate financial resources to pro-
vide continuing support services for budgeting plans
over the life of any repayment plan.
‘‘(d) The United States trustee or bankruptcy admin-
istrator shall only approve an instructional course con-
cerning personal financial management—
‘‘(1) for an initial probationary period under
subsection (b)(3) if the course will provide at a
minimum—
‘‘(A) trained personnel with adequate expe-
rience and training in providing effective in-
struction and services;
‘‘(B) learning materials and teaching
methodologies designed to assist debtors in un-
derstanding personal financial management and
that are consistent with stated objectives di-
rectly related to the goals of such course of in-
struction;
‘‘(C) adequate facilities situated in reason-
ably convenient locations at which such course
of instruction is offered, except that such facili-
ties may include the provision of such course of
instruction or program by telephone or through
the Internet, if the course of instruction or pro-
gram is effective; and
‘‘(D) the preparation and retention of rea-
sonable records (which shall include the debt-
or’s bankruptcy case number) to permit evalua-
tion of the effectiveness of such course of in-
struction or program, including any evaluation
of satisfaction of course of instruction or pro-
gram requirements for each debtor attending
such course of instruction or program, which
shall be available for inspection and evaluation
by the Executive Office for United States
Trustees, the United States trustee, bankruptcy
administrator, or chief bankruptcy judge for the
district in which such course of instruction or
program is offered; and
‘‘(2) for any 1-year period if the provider there-
of has demonstrated that the course meets the
standards of paragraph (1) and, in addition—
‘‘(A) has been effective in assisting a sub-
stantial number of debtors to understand per-
sonal financial management; and
‘‘(B) is otherwise likely to increase sub-
stantially debtor understanding of personal fi-
nancial management.
‘‘(e) The District Court may, at any time, investigate
the qualifications of a credit counseling agency referred
to in subsection (a), and request production of documents
to ensure the integrity and effectiveness of such credit
counseling agencies. The District Court may, at any time,
remove from the approved list under subsection (a) a cred-
it counseling agency upon finding such agency does not
meet the qualifications of subsection (b).
‘‘(f) The United States trustee or bankruptcy admin-
istrator shall notify the clerk that a credit counseling
agency or an instructional course is no longer approved,
in which case the clerk shall remove it from the list main-
tained under subsection (a).
‘‘(g)(1) No credit counseling service may provide to
a credit reporting agency information concerning whether
an individual debtor has received or sought instruction
concerning personal financial management from the credit
counseling service.
‘‘(2) A credit counseling service that willfully or neg-
ligently fails to comply with any requirement under this
title with respect to a debtor shall be liable for damages
in an amount equal to the sum of—
‘‘(A) any actual damages sustained by the debt-
or as a result of the violation; and
‘‘(B) any court costs or reasonable attorneys’
fees (as determined by the court) incurred in an ac-
tion to recover those damages.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 1 of title 11, United States Code,
is amended by adding at the end the following:
‘‘111. Credit counseling services; financial management instructional courses.’’.
(f) LIMITATION.—Section 362 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘(i) If a case commenced under chapter 7, 11, or 13
is dismissed due to the creation of a debt repayment plan,
for purposes of subsection (c)(3), any subsequent case
commenced by the debtor under any such chapter shall
not be presumed to be filed not in good faith.
‘‘(j) On request of a party in interest, the court shall
issue an order under subsection (c) confirming that the
automatic stay has been terminated.’’.
SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY
EXPENSES.
For purposes of section 707(b) of title 11, United
States Code, as amended by this Act, the Director of the
Executive Office for United States Trustees shall, not
later than 180 days after the date of enactment of this
Act, issue schedules of reasonable and necessary adminis-
trative expenses of administering a chapter 13 plan for
each judicial district of the United States.
TITLE II—ENHANCED
CONSUMER PROTECTION
Subtitle A—Penalties for Abusive
Creditor Practices
SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLU-
TION.
(a) REDUCTION OF CLAIM.—Section 502 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(k)(1) The court, on the motion of the debtor and
after a hearing, may reduce a claim filed under this sec-
tion based in whole on unsecured consumer debts by not
more than 20 percent of the claim, if—
‘‘(A) the claim was filed by a creditor who un-
reasonably refused to negotiate a reasonable alter-
native repayment schedule proposed by an approved
credit counseling agency described in section 111
acting on behalf of the debtor;
‘‘(B) the offer of the debtor under subpara-
graph (A)—
‘‘(i) was made at least 60 days before the
filing of the petition; and
‘‘(ii) provided for payment of at least 60
percent of the amount of the debt over a period
not to exceed the repayment period of the loan,
or a reasonable extension thereof; and
‘‘(C) no part of the debt under the alternative
repayment schedule is nondischargeable.
‘‘(2) The debtor shall have the burden of proving, by
clear and convincing evidence, that—
‘‘(A) the creditor unreasonably refused to con-
sider the debtor’s proposal; and
‘‘(B) the proposed alternative repayment sched-
ule was made prior to expiration of the 60-day pe-
riod specified in paragraph (1)(B)(i).’’.
(b) LIMITATION ON AVOIDABILITY.—Section 547 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(h) The trustee may not avoid a transfer if such
transfer was made as a part of an alternative repayment
plan between the debtor and any creditor of the debtor
created by an approved credit counseling agency.’’.
SEC. 202. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(i) The willful failure of a creditor to credit pay-
ments received under a plan confirmed under this title (in-
cluding a plan of reorganization confirmed under chapter
11 of this title), unless the plan is dismissed, in default,
purchase price that are subject to the asserted secu-
rity interest, or if not a purchase-money security in-
terest then listing by items or types and the original
amount of the loan.
‘‘(H) At the election of the creditor, a state-
ment of the repayment schedule using 1 or a com-
bination of the following—
‘‘(i) by making the statement: ‘Your first
payment in the amount of $lll is due on
lll but the future payment amount may be
different. Consult your reaffirmation or credit
agreement, as applicable.’, and stating the
amount of the first payment and the due date
of that payment in the places provided;
‘‘(ii) by making the statement: ‘Your pay-
ment schedule will be:’, and describing the re-
payment schedule with the number, amount and
due dates or period of payments scheduled to
repay the obligations reaffirmed to the extent
then known by the disclosing party; or
‘‘(iii) by describing the debtor’s repayment
obligations with reasonable specificity to the ex-
tent then known by the disclosing party.
‘‘(I) The following statement: ‘Note: When this
disclosure refers to what a creditor ‘may’ do, it does