I 
109TH CONGRESS 
1ST SESSION 
H. R. 685
To amend title 11 of the United States Code, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 9, 2005
Mr. SENSENBRENNER (for himself, Mr. AKIN, Mr. BLUNT, Mr. BURTON of 
Indiana, Mr. BUYER, Mr. CANNON, Mr. CANTOR, Mr. CASTLE, Mr. 
CHABOT, Mr. COBLE, Mr. DREIER, Mr. ENGLISH of Pennsylvania, Mr. 
GOODE, Ms. HART, Mr. FRANKS of Arizona, Mr. HOSTETTLER, Mr. JEN-
KINS, Mr. KING of Iowa, Mr. KENNEDY of Minnesota, Mr. KOLBE, Mr. 
LATOURETTE, Mr. OTTER, Ms. PRYCE of Ohio, Mr. REYNOLDS, Mr. 
ROGERS of Michigan, Mr. ROYCE, Mr. RYUN of Kansas, Mr. SESSIONS, 
Mr. SIMPSON, Mr. SMITH of Texas, Mr. WAMP, Mr. GARY G. MILLER 
of California, Mr. TERRY, Mr. BOUCHER, Mr. ANDREWS, Mr. GOOD-
LATTE, Mr. DANIEL E. LUNGREN of California, Mr. FEENEY, Mr. LIN-
DER, Mr. BOEHNER, Mr. PLATTS, Mr. OXLEY, Mr. PENCE, Mr. LEWIS 
of Kentucky, Mr. KELLER, Mr. FOLEY, Mr. CROWLEY, Mr. SMITH of 
Washington, Mrs. BIGGERT, Mr. ISSA, Mr. BAKER, Mrs. BLACKBURN, 
Mr. DAVIS of Florida, Ms. HOOLEY, Mr. GILLMOR, Mr. DENT, Mr. 
BARTLETT of Maryland, Mr. BACHUS, Mr. NEY, Mrs. MUSGRAVE, and 
Mr. TIBERI) introduced the following bill; which was referred to the Com-
mittee on the Judiciary, and in addition to the Committee 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 jurisdic-
tion of the committee concerned 
A BILL 
To amend title 11 of the United States Code, and for other 
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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 2005’’. 
(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 agreement practices. 
Sec. 204. Preservation of claims and defenses upon sale of predatory loans. 
Sec. 205. GAO study and report on reaffirmation agreement process. 
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. 
Sec. 231. Protection of personally identifiable information. 
Sec. 232. Consumer privacy ombudsman. 
Sec. 233. Prohibition on disclosure of name of minor children. 
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. Reduction of homestead exemption for fraud. 
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. Limitations on homestead exemption. 
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. 
Sec. 329. Clarification of postpetition wages and benefits. 
Sec. 330. Delay of discharge during pendency of certain proceedings. 
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. 
Sec. 446. Duties with respect to a debtor who is a plan administrator of an em-
ployee benefit plan. 
Sec. 447. Appointment of committee of retired employees. 
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 FDIC and NCUAB with respect to failed and failing 
institutions. 
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 law amendments. 
Sec. 908. Recordkeeping requirements. 
Sec. 909. Exemptions from contemporaneous execution requirement. 
Sec. 910. Damage measure. 
Sec. 911. SIPC stay. 
TITLE X—PROTECTION OF FAMILY FARMERS AND FAMILY 
FISHERMEN 
Sec. 1001. Permanent reenactment of chapter 12. 
Sec. 1002. Debt limit increase. 
Sec. 1003. Certain claims owed to governmental units. 
Sec. 1004. Definition of family farmer. 
Sec. 1005. Elimination of requirement that family farmer and spouse receive 
over 50 percent of income from farming operation in year prior 
to bankruptcy. 
Sec. 1006. Prohibition of retroactive assessment of disposable income. 
Sec. 1007. Family fishermen. 
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. Bankruptcy cases and proceedings. 
Sec. 1220. Knowing disregard of bankruptcy law or rule. 
Sec. 1221. Transfers made by nonprofit charitable corporations. 
Sec. 1222. Protection of valid purchase money security interests. 
Sec. 1223. Bankruptcy Judgeships. 
Sec. 1224. Compensating trustees. 
Sec. 1225. Amendment to section 362 of title 11, United States Code. 
Sec. 1226. Judicial education. 
Sec. 1227. Reclamation. 
Sec. 1228. Providing requested tax documents to the court. 
Sec. 1229. Encouraging creditworthiness. 
Sec. 1230. Property no longer subject to redemption. 
Sec. 1231. Trustees. 
Sec. 1232. Bankruptcy forms. 
Sec. 1233. Direct appeals of bankruptcy matters to courts of appeals. 
Sec. 1234. Involuntary cases. 
Sec. 1235. Federal election law fines and penalties as nondischargeable debt. 
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. 
TITLE XIV—PREVENTING CORPORATE BANKRUPTCY ABUSE 
Sec. 1401. Employee wage and benefit priorities. 
Sec. 1402. Fraudulent transfers and obligations. 
Sec. 1403. Payment of insurance benefits to retired employees. 
Sec. 1404. Effective date; application of amendments. 
TITLE XV—GENERAL EFFECTIVE DATE; APPLICATION OF 
AMENDMENTS 
Sec. 1501. Effective date; application of amendments. 
Sec. 1502. Technical corrections.
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 so 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 
(or 
bankruptcy 
adminis-
trator, if any), 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 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 provi-
sion of this clause, the monthly expenses of the debtor 
shall not include any payments for debts. In addition, the 
debtor’s monthly expenses shall include the debtor’s rea-
sonably necessary expenses incurred to maintain the safe-
ty of the debtor and the family of the debtor from family 
violence as identified under section 309 of the Family Vio-
lence Prevention and Services Act, or other applicable 
Federal law. The expenses included in the debtor’s month-
ly expenses described in the preceding sentence shall be 
kept confidential by the court. In addition, if it is dem-
onstrated that it is reasonable and necessary, the debtor’s 
monthly expenses may also include an additional allowance 
for food and clothing of up to 5 percent 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, siblings, children, 
and grandchildren 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 less 
than 18 years of age, not to exceed $1,500 per year per 
child, to attend a private or public elementary or sec-
ondary school if the debtor provides documentation of such 
expenses and a detailed explanation of why such expenses 
are reasonable and necessary, and why such expenses are 
not already accounted for in the National Standards,
Local Standards, or Other Necessary Expenses referred 
to in subclause (I). 
‘‘(V) In addition, the debtor’s monthly expenses may 
include an allowance for housing and utilities, in excess 
of the allowance specified by the Local Standards for 
housing and utilities issued by the Internal Revenue Serv-
ice, based on the actual expenses for home energy costs 
if the debtor provides documentation of such actual ex-
penses and demonstrates that such actual expenses are 
reasonable and necessary. 
‘‘(iii) The debtor’s average monthly payments on ac-
count of secured debts shall be calculated as the sum of—
‘‘(I) the total of all amounts scheduled as con-
tractually due to secured creditors in each month of 
the 60 months following the date of the petition; and 
‘‘(II) any additional payments to secured credi-
tors 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 dependents, that serves as collateral for 
secured debts; 
divided by 60. 
‘‘(iv) The debtor’s expenses for payment of all pri-
ority claims (including priority child support and alimony
claims) shall be calculated as the total amount of debts 
entitled to priority, divided by 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 itemize each additional expense 
or adjustment of income and to provide—
‘‘(I) documentation for such expense or adjust-
ment to income; and 
‘‘(II) a detailed explanation of the special cir-
cumstances that make such expenses or adjustment 
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 show 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 arise or is 
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, on its own initiative or on the mo-
tion of a party in interest, in accordance with the proce-
dures described in rule 9011 of the Federal Rules of 
Bankruptcy Procedure, may order the attorney for the
debtor to reimburse the trustee for all reasonable costs 
in prosecuting a motion filed under section 707(b), includ-
ing reasonable attorneys’ fees, if—
‘‘(i) a trustee files a motion for dismissal or 
conversion under this subsection; and 
‘‘(ii) the court—
‘‘(I) grants such motion; and 
‘‘(II) finds that the action of the attorney 
for the debtor in filing a case under this chap-
ter violated rule 9011 of the Federal Rules of 
Bankruptcy Procedure. 
‘‘(B) If the court finds that the attorney for the debt-
or violated rule 9011 of the Federal Rules of Bankruptcy 
Procedure, the court, on its own initiative or on the motion 
of a party in interest, in accordance with such procedures, 
may order—
‘‘(i) the assessment of an appropriate civil pen-
alty against the attorney for the debtor; and 
‘‘(ii) the payment of such civil penalty to the 
trustee, the United States trustee (or the bank-
ruptcy administrator, if any). 
‘‘(C) The signature of an attorney on a petition, 
pleading, or written motion shall constitute a certification 
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, on its own initiative 
or on the motion of a party in interest, in accordance with 
the procedures described in rule 9011 of the Federal Rules 
of Bankruptcy Procedure, may award a debtor all reason-
able costs (including reasonable attorneys’ fees) in con-
testing a motion filed by a party in interest (other than 
a trustee or United States trustee (or bankruptcy adminis-
trator, if any)) 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 filed the 
motion violated rule 9011 of the Federal Rules 
of Bankruptcy Procedure; or 
‘‘(II) the attorney (if any) who filed the 
motion did not comply with the requirements of 
clauses (i) and (ii) of paragraph (4)(C), and the 
motion was made solely for the purpose of co-
ercing 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 fewer than 25 full-time employees 
as determined on the date on which 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 or United States trustee (or 
bankruptcy administrator, if any) may file a motion under 
section 707(b), if the current monthly income of the debt-
or, 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; 
‘‘(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; 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, plus $525 per month for each in-
dividual in excess of 4. 
‘‘(7)(A) No judge, United States trustee (or bank-
ruptcy administrator, if any), trustee, or other party in 
interest may file a motion under paragraph (2) if the cur-
rent monthly income of the debtor and the debtor’s spouse
combined, as of the date of the order for relief when multi-
plied by 12, is equal to or less than—
‘‘(i) in the case of a debtor in a household of 
1 person, the median family income of the applicable 
State for 1 earner; 
‘‘(ii) 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; or 
‘‘(iii) 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, plus $525 per month for each in-
dividual in excess of 4. 
‘‘(B) In a case that is not a joint case, current month-
ly income of the debtor’s spouse shall not be considered 
for purposes of subparagraph (A) if—
‘‘(i)(I) the debtor and the debtor’s spouse are 
separated under applicable nonbankruptcy law; or 
‘‘(II) the debtor and the debtor’s spouse are liv-
ing separate and apart, other than for the purpose 
of evading subparagraph (A); and 
‘‘(ii) the debtor files a statement under penalty 
of perjury—
‘‘(I) specifying that the debtor meets the 
requirement of subclause (I) or (II) of clause 
(i); and 
‘‘(II) disclosing the aggregate, or best esti-
mate of the aggregate, amount of any cash or 
money payments received from the debtor’s 
spouse attributed to the debtor’s current 
monthly income.’’. 
(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 that the debtor receives (or in 
a joint case the debtor and the debtor’s spouse 
receive) without regard to whether such income 
is taxable income, derived during the 6-month 
period ending on—
‘‘(i) the last day of the calendar 
month immediately preceding the date of 
the commencement of the case if the debt-
or files the schedule of current income re-
quired by section 521(a)(1)(B)(ii); or 
‘‘(ii) the date on which current income 
is determined by the court for purposes of
this title if the debtor does not file the 
schedule of current income required by sec-
tion 521(a)(1)(B)(ii); 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 regular 
basis for the household expenses of the debtor 
or the debtor’s dependents (and in a joint case 
the debtor’s spouse if not otherwise a depend-
ent), but excludes benefits received under the 
Social Security Act, payments to victims of war 
crimes or crimes against humanity on account 
of their status as victims of such crimes, and 
payments to victims of international terrorism 
(as defined in section 2331 of title 18) or do-
mestic terrorism (as defined in section 2331 of 
title 18) on account of their status as victims 
of such terrorism;’’. 
(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 a debtor who is an individual 
in a case under this chapter—
‘‘(A) the United States trustee (or the bank-
ruptcy administrator, if any) shall review all mate-
rials 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 debt-
or’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 ad-
ministrator, if any) shall, not later than 30 days after the 
date of filing a statement under paragraph (1), either file 
a motion to dismiss or convert under section 707(b) or 
file a statement setting forth the reasons the United 
States trustee (or the bankruptcy administrator, if any) 
does not consider such a motion to be appropriate, if the 
United States trustee (or the bankruptcy administrator, 
if any) determines that the debtor’s case should be pre-
sumed to be an abuse under section 707(b) and the prod-
uct 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; 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.’’. 
(d) NOTICE.—Section 342 of title 11, United States 
Code, is amended by adding at the end the following: 
‘‘(d) In a case under chapter 7 of this title in which 
the debtor is an individual and in which the presumption 
of abuse arises 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 arisen.’’. 
(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 (or bankruptcy administrator, 
if any), or trustee. 
(f) DISMISSAL FOR CERTAIN CRIMES.—Section 707 
of title 11, United States Code, 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 such term in section 16 of title 18; and 
‘‘(B) the term ‘drug trafficking crime’ has the 
meaning given such 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 victim dismiss a vol-
untary case filed under this chapter by a debtor who is 
an individual if such individual was convicted of such 
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 inserting after paragraph (6) the fol-
lowing:
‘‘(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)(i) for the maintenance or support of 
the debtor or a dependent of the debtor, or for 
a domestic support obligation, that first be-
comes payable after the date the petition is 
filed; and 
‘‘(ii) for charitable contributions (that 
meet the definition of ‘charitable contribution’ 
under section 548(d)(3) to a qualified religious
or charitable entity or organization (as 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; 
‘‘(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; 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, plus $525 per 
month for each individual in excess of 4.’’. 
(i) SPECIAL
ALLOWANCE
FOR
HEALTH
INSUR-
ANCE.—Section 1329(a) 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) reduce amounts to be paid under the plan 
by the actual amount expended by the debtor to pur-
chase health insurance for the debtor (and for any 
dependent of the debtor if such dependent does not 
otherwise have health insurance coverage) if the 
debtor documents the cost of such insurance and 
demonstrates that—
‘‘(A) such expenses are reasonable and 
necessary; 
‘‘(B)(i) if the debtor previously paid for 
health insurance, the amount is not materially 
larger than the cost the debtor previously paid 
or the cost necessary to maintain the lapsed 
policy; or
‘‘(ii) if the debtor did not have health in-
surance, the amount is not materially larger 
than the reasonable cost that would be incurred 
by a debtor who purchases health insurance, 
who has similar income, expenses, age, and 
health status, and who lives in the same geo-
graphical location with the same number of de-
pendents who do not otherwise have health in-
surance coverage; and 
‘‘(C) the amount is not otherwise allowed 
for purposes of determining disposable income 
under section 1325(b) of this title; 
and upon request of any party in interest, files proof 
that a health insurance policy was purchased.’’. 
(j) ADJUSTMENT
OF DOLLAR AMOUNTS.—Section 
104(b) of title 11, United States Code, is amended by 
striking ‘‘and 523(a)(2)(C)’’ each place it appears and in-
serting ‘‘523(a)(2)(C), 707(b), and 1325(b)(3)’’. 
(k) DEFINITION OF ‘MEDIAN FAMILY INCOME’.—
Section 101 of title 11, United States Code, is amended 
by inserting after paragraph (39) the following: 
‘‘(39A) ‘median family income’ means for any 
year—
‘‘(A) the median family income both cal-
culated and reported by the Bureau of the Cen-
sus in the then most recent year; and 
‘‘(B) if not so calculated and reported in 
the then current year, adjusted annually after 
such most recent year until the next year in 
which median family income is both calculated 
and reported by the Bureau of the Census, to 
reflect the percentage change in the Consumer 
Price Index for All Urban Consumers during 
the period of years occurring after such most 
recent year and before such current year;’’. 
(k) 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