I
107TH CONGRESS
1ST SESSION
H. R. 333
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
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—
‘‘(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
the date on which the debtor meets the requirements of
paragraph (1), but in no case may the exemption apply
to that debtor after the date that is 30 days after the debt-
or files a petition, except that the court, for cause, may
order an additional 15 days.’’.
(b) CHAPTER 7 DISCHARGE.—Section 727(a) of title
11, United States Code, is amended—
(1) in paragraph (9), by striking ‘‘or’’ at the
end;
(2) in paragraph (10), by striking the period
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(11) after the filing of the petition, the debtor
failed to complete an instructional course concerning
personal financial management described in section
111.
‘‘(12)(A) Paragraph (11) shall not apply with
respect to a debtor who resides in a district for
which the United States trustee or bankruptcy ad-
ministrator of that district determines that the ap-
proved instructional courses are not adequate to
service the additional individuals required to com-
plete such instructional courses under this section.
‘‘(B) Each United States trustee or bankruptcy
administrator that makes a determination described
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-
‘‘(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,
or the creditor has not received payments required to be
made under the plan in the manner required by the plan
(including crediting the amounts required under the plan),
shall constitute a violation of an injunction under sub-
section (a)(2) if the act of the creditor to collect and fail-
ure to credit payments in the manner required by the plan
caused material injury to the debtor.
‘‘(j) Subsection (a)(2) does not operate as an injunc-
tion against an act by a creditor that is the holder of a
secured claim, if—
‘‘(1) such creditor retains a security interest in
real property that is the principal residence of the
debtor;
‘‘(2) such act is in the ordinary course of busi-
ness between the creditor and the debtor; and
‘‘(3) such act is limited to seeking or obtaining
periodic payments associated with a valid security
interest in lieu of pursuit of in rem relief to enforce
the lien.’’.
SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION
PRACTICES.
(a) IN GENERAL.—Section 524 of title 11, United
States Code, as amended by this Act, is amended—
(1) in subsection (c), by striking paragraph (2)
and inserting the following:
‘‘(2) the debtor received the disclosures de-
scribed in subsection (k) at or before the time at
which the debtor signed the agreement;’’;
(2) by adding at the end the following:
‘‘(k)(1) The disclosures required under subsection
(c)(2) shall consist of the disclosure statement described
in paragraph (3), completed as required in that para-
graph, together with the agreement, statement, declara-
tion, motion and order described, respectively, in para-
graphs (4) through (8), and shall be the only disclosures
required in connection with the reaffirmation.
‘‘(2) Disclosures made under paragraph (1) shall be
made clearly and conspicuously and in writing. The terms
‘Amount Reaffirmed’ and ‘Annual Percentage Rate’ shall
be disclosed more conspicuously than other terms, data or
information provided in connection with this disclosure,
except that the phrases ‘Before agreeing to reaffirm a
debt, review these important disclosures’ and ‘Summary
of Reaffirmation Agreement’ may be equally conspicuous.
Disclosures may be made in a different order and may
use terminology different from that set forth in para-
graphs (2) through (8), except that the terms ‘Amount
Reaffirmed’ and ‘Annual Percentage Rate’ must be used
where indicated.
‘‘(3) The disclosure statement required under this
paragraph shall consist of the following:
‘‘(A) The statement: ‘Part A: Before agreeing
to reaffirm a debt, review these important disclo-
sures:’;
‘‘(B) Under the heading ‘Summary of Reaffir-
mation Agreement’, the statement: ‘This Summary
is made pursuant to the requirements of the Bank-
ruptcy Code’;
‘‘(C) The ‘Amount Reaffirmed’, using that
term, which shall be—
‘‘(i) the total amount which the debtor
agrees to reaffirm, and
‘‘(ii) the total of any other fees or cost ac-
crued as of the date of the disclosure statement.
‘‘(D) In conjunction with the disclosure of the
‘Amount Reaffirmed’, the statements—
‘‘(i) ‘The amount of debt you have agreed
to reaffirm’; and
‘‘(ii) ‘Your credit agreement may obligate
you to pay additional amounts which may come
due after the date of this disclosure. Consult
your credit agreement.’.
‘‘(E) The ‘Annual Percentage Rate’, using that
term, which shall be disclosed as—
‘‘(i) if, at the time the petition is filed, the
debt is open end credit as defined under the
Truth in Lending Act (15 U.S.C. 1601 et seq.),
then—
‘‘(I) the annual percentage rate deter-
mined under paragraphs (5) and (6) of
section 127(b) of the Truth in Lending Act
(15 U.S.C. 1637(b)(5) and (6)), as appli-
cable, as disclosed to the debtor in the
most recent periodic statement prior to the
agreement or, if no such periodic state-
ment has been provided the debtor during
the prior 6 months, the annual percentage
rate as it would have been so disclosed at
the time the disclosure statement is given
the debtor, or to the extent this annual
percentage rate is not readily available or
not applicable, then
‘‘(II) the simple interest rate applica-
ble to the amount reaffirmed as of the date
the disclosure statement is given to the
debtor, or if different simple interest rates
apply to different balances, the simple in-
terest rate applicable to each such balance,
identifying the amount of each such bal-
ance included in the amount reaffirmed, or
‘‘(III) if the entity making the disclo-
sure elects, to disclose the annual percent-
age rate under subclause (I) and the sim-
ple interest rate under subclause (II);
‘‘(ii) if, at the time the petition is filed, the
debt is closed end credit as defined under the
Truth in Lending Act (15 U.S.C. 1601 et seq.),
then—
‘‘(I) the annual percentage rate under
section 128(a)(4) of the Truth in Lending
Act (15 U.S.C. 1638(a)(4)), as disclosed to
the debtor in the most recent disclosure
statement given the debtor prior to the re-
affirmation agreement with respect to the
debt, or, if no such disclosure statement
was provided the debtor, the annual per-
centage rate as it would have been so dis-
closed at the time the disclosure statement
is given the debtor, or to the extent this
annual percentage rate is not readily avail-
able or not applicable, then
‘‘(II) the simple interest rate applica-
ble to the amount reaffirmed as of the date
the disclosure statement is given the debt-
or, or if different simple interest rates
apply to different balances, the simple in-
terest rate applicable to each such balance,
identifying the amount of such balance in-
cluded in the amount reaffirmed, or
‘‘(III) if the entity making the disclo-
sure elects, to disclose the annual percent-
age rate under (I) and the simple interest
rate under (II).
‘‘(F) If the underlying debt transaction was dis-
closed as a variable rate transaction on the most re-
cent disclosure given under the Truth in Lending
Act (15 U.S.C. 1601 et seq.), by stating ‘The inter-
est rate on your loan may be a variable interest rate
which changes from time to time, so that the annual
percentage rate disclosed here may be higher or
lower.’.
‘‘(G) If the debt is secured by a security inter-
est which has not been waived in whole or in part
or determined to be void by a final order of the
court at the time of the disclosure, by disclosing that
a security interest or lien in goods or property is as-
serted over some or all of the obligations you are re-
affirming and listing the items and their original
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
not use the word ‘may’ to give the creditor specific
permission. The word ‘may’ is used to tell you what
might occur if the law permits the creditor to take
the action. If you have questions about your reaffir-
mation or what the law requires, talk to the attorney
who helped you negotiate this agreement. If you
don’t have an attorney helping you, the judge will
explain the effect of your reaffirmation when the re-
affirmation hearing is held.’.
‘‘(J)(i) The following additional statements:
‘‘ ‘Reaffirming a debt is a serious financial decision.
The law requires you to take certain steps to make sure
the decision is in your best interest. If these steps are not
completed, the reaffirmation agreement is not effective,
even though you have signed it.
‘‘ ‘1. Read the disclosures in this Part A care-
fully. Consider the decision to reaffirm carefully.
Then, if you want to reaffirm, sign the reaffirmation
agreement in Part B (or you may use a separate
agreement you and your creditor agree on).
‘‘ ‘2. Complete and sign Part D and be sure you
can afford to make the payments you are agreeing
to make and have received a copy of the disclosure
statement and a completed and signed reaffirmation
agreement.
‘‘ ‘3. If you were represented by an attorney
during the negotiation of the reaffirmation agree-
ment, the attorney must have signed the certification
in Part C.
‘‘ ‘4. If you were not represented by an attorney
during the negotiation of the reaffirmation agree-
ment, you must have completed and signed Part E.
‘‘ ‘5. The original of this disclosure must be
filed with the court by you or your creditor. If a sep-
arate reaffirmation agreement (other than the one in
Part B) has been signed, it must be attached.
‘‘ ‘6. If you were represented by an attorney
during the negotiation of the reaffirmation agree-
ment, your reaffirmation agreement becomes effec-
tive upon filing with the court unless the reaffirma-
tion is presumed to be an undue hardship as ex-
plained in Part D.
‘‘ ‘7. If you were not represented by an attorney
during the negotiation of the reaffirmation agree-
ment, it will not be effective unless the court ap-
proves it. The court will notify you of the hearing on
your reaffirmation agreement. You must attend this
hearing in bankruptcy court where the judge will re-
view your agreement. The bankruptcy court must
approve the agreement as consistent with your best
interests, except that no court approval is required
if the agreement is for a consumer debt secured by
a mortgage, deed of trust, security deed or other lien
on your real property, like your home.
‘‘ ‘Your right to rescind a reaffirmation. You may re-
scind (cancel) your reaffirmation at any time before the
bankruptcy court enters a discharge order or within 60
days after the agreement is filed with the court, whichever
is longer. To rescind or cancel, you must notify the cred-
itor that the agreement is canceled.
‘‘ ‘What are your obligations if you reaffirm the debt?
A reaffirmed debt remains your personal legal obligation.
It is not discharged in your bankruptcy. That means that
if you default on your reaffirmed debt after your bank-
ruptcy is over, your creditor may be able to take your
property or your wages. Otherwise, your obligations will
be determined by the reaffirmation agreement which may
have changed the terms of the original agreement. For ex-
ample, if you are reaffirming an open end credit agree-
ment, the creditor may be permitted by that agreement
or applicable law to change the terms of the agreement
in the future under certain conditions.
‘‘ ‘Are you required to enter into a reaffirmation
agreement by any law? No, you are not required to reaf-
firm a debt by any law. Only agree to reaffirm a debt if
it is in your best interest. Be sure you can afford the pay-
ments you agree to make.
‘‘ ‘What if your creditor has a security interest or
lien? Your bankruptcy discharge does not eliminate any
lien on your property. A ‘‘lien’’ is often referred to as a
security interest, deed of trust, mortgage or security deed.
Even if you do not reaffirm and your personal liability
on the debt is discharged, because of the lien your creditor
may still have the right to take the security property if
you do not pay the debt or default on it. If the lien is
on an item of personal property that is exempt under your
State’s law or that the trustee has abandoned, you may
be able to redeem the item rather than reaffirm the debt.
To redeem, you make a single payment to the creditor
equal to the current value of the security property, as
agreed by the parties or determined by the court.’.
‘‘(ii) In the case of a reaffirmation under sub-
section (m)(2), numbered paragraph 6 in the disclo-
sures required by clause (i) of this subparagraph
shall read as follows:
‘‘ ‘6. If you were represented by an attorney
during the negotiation of the reaffirmation agree-
ment, your reaffirmation agreement becomes effec-
tive upon filing with the court.’.
‘‘(4) The form of reaffirmation agreement required
under this paragraph shall consist of the following:
‘‘ ‘Part B: Reaffirmation Agreement. I/we agree to re-
affirm the obligations arising under the credit agreement
described below.
‘‘ ‘Brief description of credit agreement:
‘‘ ‘Description of any changes to the credit agreement
made as part of this reaffirmation agreement:
‘‘ ‘Signature:
Date:
‘‘ ‘Borrower:
‘‘ ‘Co-borrower, if also reaffirming:
‘‘ ‘Accepted by creditor:
‘‘ ‘Date of creditor acceptance:’.
‘‘(5)(A) The declaration shall consist of the following:
‘‘ ‘Part C: Certification by Debtor’s Attorney (If
Any).
‘‘ ‘I hereby certify that (1) this agreement represents
a fully informed and voluntary agreement by the debtor(s);
(2) this agreement does not impose an undue hardship on
the debtor or any dependent of the debtor; and (3) I have
fully advised the debtor of the legal effect and con-
sequences of this agreement and any default under this
agreement.
‘‘ ‘Signature of Debtor’s Attorney:
Date:’.
‘‘(B) In the case of reaffirmations in which a pre-
sumption of undue hardship has been established, the cer-
tification shall state that in the opinion of the attorney,
the debtor is able to make the payment.
‘‘(C) In the case of a reaffirmation agreement under
subsection (m)(2), subparagraph (B) is not applicable.
‘‘(6)(A) The statement in support of reaffirmation
agreement, which the debtor shall sign and date prior to
filing with the court, shall consist of the following:
‘‘ ‘Part D: Debtor’s Statement in Support of Reaffir-
mation Agreement.
‘‘ ‘1. I believe this agreement will not impose an
undue hardship on my dependents or me. I can afford to
make the payments on the reaffirmed debt because my
monthly income (take home pay plus any other income re-
ceived) is $lll, and my actual current monthly ex-
penses including monthly payments on post-bankruptcy
debt and other reaffirmation agreements total $lll,
leaving $lll to make the required payments on this
reaffirmed debt. I understand that if my income less my
monthly expenses does not leave enough to make the pay-
ments, this reaffirmation agreement is presumed to be an
undue hardship on me and must be reviewed by the court.
However, this presumption may be overcome if I explain
to the satisfaction of the court how I can afford to make
the payments here: lll.
‘‘ ‘2. I received a copy of the Reaffirmation Disclosure
Statement in Part A and a completed and signed reaffir-
mation agreement.’.
‘‘(B) Where the debtor is represented by counsel and
is reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)(iv)), the statement of support of the reaffir-
mation agreement, which the debtor shall sign and date
prior to filing with the court, shall consist of the following:
‘‘ ‘I believe this agreement is in my financial interest.
I can afford to make the payments on the reaffirmed debt.
I received a copy of the Reaffirmation Disclosure State-
ment in Part A and a completed and signed reaffirmation
agreement.’
‘‘(7) The motion, which may be used if approval of
the agreement by the court is required in order for it to
be effective and shall be signed and dated by the moving
party, shall consist of the following:
‘‘ ‘Part E: Motion for Court Approval (To be com-
pleted only where debtor is not represented by an attor-
ney.). I (we), the debtor, affirm the following to be true
and correct:
‘‘ ‘I am not represented by an attorney in connection
with this reaffirmation agreement.
‘‘ ‘I believe this agreement is in my best interest
based on the income and expenses I have disclosed in my
Statement in Support of this reaffirmation agreement
above, and because (provide any additional relevant rea-
sons the court should consider):
‘‘ ‘Therefore, I ask the court for an order approving
this reaffirmation agreement.’.
‘‘(8) The court order, which may be used to approve
a reaffirmation, shall consist of the following:
‘‘ ‘Court Order: The court grants the debtor’s motion
and approves the reaffirmation agreement described
above.’.
‘‘(9) Subsection (a)(2) does not operate as an injunc-
tion against an act by a creditor that is the holder of a
secured claim, if—
‘‘(A) such creditor retains a security interest in
real property that is the debtor’s principal residence;
‘‘(B) such act is in the ordinary course of busi-
ness between the creditor and the debtor; and
‘‘(C) such act is limited to seeking or obtaining
periodic payments associated with a valid security
interest in lieu of pursuit of in rem relief to enforce
the lien.
‘‘(l) Notwithstanding any other provision of this title:
‘‘(1) A creditor may accept payments from a
debtor before and after the filing of a reaffirmation
agreement with the court.
‘‘(2) A creditor may accept payments from a
debtor under a reaffirmation agreement which the
creditor believes in good faith to be effective.
‘‘(3) The requirements of subsections (c)(2) and
(k) shall be satisfied if disclosures required under
those subsections are given in good faith.
‘‘(m)(1) Until 60 days after a reaffirmation agree-
ment is filed with the court (or such additional period as
the court, after notice and hearing and for cause, orders
before the expiration of such period), it shall be presumed
that the reaffirmation agreement is an undue hardship on
the debtor if the debtor’s monthly income less the debtor’s
monthly expenses as shown on the debtor’s completed and
signed statement in support of the reaffirmation agree-
ment required under subsection (k)(6)(A) is less than the
scheduled payments on the reaffirmed debt. This pre-
sumption shall be reviewed by the court. The presumption
may be rebutted in writing by the debtor if the statement
includes an explanation which identifies additional sources
of funds to make the payments as agreed upon under the
terms of the reaffirmation agreement. If the presumption
is not rebutted to the satisfaction of the court, the court
may disapprove the agreement. No agreement shall be dis-
approved without notice and hearing to the debtor and
creditor and such hearing shall be concluded before the
entry of the debtor’s discharge.
‘‘(2) This subsection does not apply to reaffirmation
agreements where the creditor is a credit union, as defined
in section 19(b)(1)(A)(iv) of the Federal Reserve Act (12
U.S.C. 461(b)(1)(A)(iv)).’’.
(b) LAW ENFORCEMENT.—
(1) IN GENERAL.—Chapter 9 of title 18, United
States Code, is amended by adding at the end the
following:
‘‘§ 158. Designation of United States attorneys and
agents of the Federal Bureau of Inves-
tigation to address abusive reaffirma-
tions of debt and materially fraudulent
statements in bankruptcy schedules
‘‘(a) IN GENERAL.—The Attorney General of the
United States shall designate the individuals described in
subsection (b) to have primary responsibility in carrying
out enforcement activities in addressing violations of sec-
tion 152 or 157 relating to abusive reaffirmations of debt.
In addition to addressing the violations referred to in the
preceding sentence, the individuals described under sub-
section (b) shall address violations of section 152 or 157
relating to materially fraudulent statements in bankruptcy
schedules that are intentionally false or intentionally mis-
leading.
‘‘(b) UNITED STATES DISTRICT ATTORNEYS
AND
AGENTS OF THE FEDERAL BUREAU OF INVESTIGATION—
The individuals referred to in subsection (a) are—
‘‘(1) a United States attorney for each judicial
district of the United States; and
‘‘(2) an agent of the Federal Bureau of Inves-
tigation (within the meaning of section 3107) for
each field office of the Federal Bureau of Investiga-
tion.
‘‘(c) BANKRUPTCY INVESTIGATIONS.—Each United
States attorney designated under this section shall, in ad-
dition to any other responsibilities, have primary responsi-
bility for carrying out the duties of a United States attor-
ney under section 3057.
‘‘(d) BANKRUPTCY PROCEDURES.—The bankruptcy
courts shall establish procedures for referring any case
which may contain a materially fraudulent statement in
a bankruptcy schedule to the individuals designated under
this section.’’.
(2) CLERICAL AMENDMENT.—The analysis for
chapter 9 of title 18, United States Code, is amend-
ed by adding at the end the following:
‘‘158. Designation of United States attorneys and agents of the Federal Bureau
of Investigation to address abusive reaffirmations of debt and
materially fraudulent statements in bankruptcy schedules.’’.
Subtitle B—Priority Child Support
SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGA-
TION.
Section 101 of title 11, United States Code, is
amended—
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the fol-
lowing:
‘‘(14A) ‘domestic support obligation’ means a
debt that accrues before or after the entry of an
order for relief under this title, including interest
that accrues on that debt as provided under applica-
ble nonbankruptcy law notwithstanding any other
provision of this title, that is—
‘‘(A) owed to or recoverable by—
‘‘(i) a spouse, former spouse, or child
of the debtor or such child’s parent, legal
guardian, or responsible relative; or
‘‘(ii) a governmental unit;
‘‘(B) in the nature of alimony, mainte-
nance, or support (including assistance provided
by a governmental unit) of such spouse, former
spouse, or child of the debtor or such child’s
parent, without regard to whether such debt is
expressly so designated;
‘‘(C) established or subject to establish-
ment before or after entry of an order for relief
under this title, by reason of applicable provi-
sions of—
‘‘(i) a separation agreement, divorce
decree, or property settlement agreement;
‘‘(ii) an order of a court of record; or
‘‘(iii) a determination made in accord-
ance with applicable nonbankruptcy law by
a governmental unit; and
‘‘(D) not assigned to a nongovernmental
entity, unless that obligation is assigned volun-
tarily by the spouse, former spouse, child, or
parent, legal guardian, or responsible relative of
the child for the purpose of collecting the
debt;’’.
SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP-
PORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is
amended—
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through
(6) as paragraphs (2) through (7), respectively;
(3) in paragraph (2), as redesignated, by strik-
ing ‘‘First’’ and inserting ‘‘Second’’;
(4) in paragraph (3), as redesignated, by strik-
ing ‘‘Second’’ and inserting ‘‘Third’’;
(5) in paragraph (4), as redesignated—
(A) by striking ‘‘Third’’ and inserting
‘‘Fourth’’; and
(B) by striking the semicolon at the end
and inserting a period;
(6) in paragraph (5), as redesignated, by strik-
ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;
(7) in paragraph (6), as redesignated, by strik-
ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;
(8) in paragraph (7), as redesignated, by strik-
ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and
(9) by inserting before paragraph (2), as redes-
ignated, the following:
‘‘(1) First:
‘‘(A) Allowed unsecured claims for domes-
tic support obligations that, as of the date of
the filing of the petition, are owed to or recover-
able by a spouse, former spouse, or child of the
debtor, or the parent, legal guardian, or respon-
sible relative of such child, without regard to
whether the claim is filed by such person or is
filed by a governmental unit on behalf of that
person, on the condition that funds received
under this paragraph by a governmental unit
under this title after the date of filing of the pe-
tition shall be applied and distributed in accord-
ance with applicable nonbankruptcy law.
‘‘(B) Subject to claims under subpara-
graph (A), allowed unsecured claims for domes-
tic support obligations that, as of the date the
petition was filed are assigned by a spouse,
former spouse, child of the debtor, or such
child’s parent, legal guardian, or responsible
relative to a governmental unit (unless such ob-
ligation is assigned voluntarily by the spouse,
former spouse, child, parent, legal guardian, or
responsible relative of the child for the purpose
of collecting the debt) or are owed directly to or
recoverable by a government unit under applica-
ble nonbankruptcy law, on the condition that
funds received under this paragraph by a gov-
ernmental unit under this title after the date of
filing of the petition be applied and distributed
in accordance with applicable nonbankruptcy
law.’’.
SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND
DISCHARGE IN CASES INVOLVING DOMESTIC
SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended—
(1) in section 1129(a), by adding at the end the
following:
‘‘(14) If the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or statute for such obliga-
tion that first become payable after the date on
which the petition is filed.’’;
(2) in section 1208(c)—
(A) in paragraph (8), by striking ‘‘or’’ at
the end;
(B) in paragraph (9), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(10) failure of the debtor to pay any domestic
support obligation that first becomes payable after
the date on which the petition is filed.’’;
(3) in section 1222(a)—
(A) in paragraph (2), by striking ‘‘and’’ at
the end;
(B) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(4) notwithstanding any other provision of this
section, a plan may provide for less than full pay-
ment of all amounts owed for a claim entitled to pri-
ority under section 507(a)(1)(B) only if the plan
provides that all of the debtor’s projected disposable
income for a 5-year period, beginning on the date
that the first payment is due under the plan, will be
applied to make payments under the plan.’’;
(4) in section 1222(b)—
(A) by redesignating paragraph (11) as
paragraph (12); and
(B) by inserting after paragraph (10) the
following:
‘‘(11) provide for the payment of interest accru-
ing after the date of the filing of the petition on un-
secured claims that are nondischargeable under sec-
tion 1328(a), except that such interest may be paid
only to the extent that the debtor has disposable in-
come available to pay such interest after making
provision for full payment of all allowed claims;’’;
(5) in section 1225(a)—
(A) in paragraph (5), by striking ‘‘and’’ at
the end;
(B) in paragraph (6), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(7) if the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order for such obligation that
first become payable after the date on which the pe-
tition is filed.’’;
(6) in section 1228(a), in the matter preceding
paragraph (1), by inserting ‘‘, and in the case of a
debtor who is required by a judicial or administra-
tive order to pay a domestic support obligation, after
such debtor certifies that all amounts payable under
such order or statute that are due on or before the
date of the certification (including amounts due be-
fore the petition was filed, but only to the extent
provided for in the plan) have been paid’’ after
‘‘completion by the debtor of all payments under the
plan’’;
(7) in section 1307(c)—
(A) in paragraph (9), by striking ‘‘or’’ at
the end;
(B) in paragraph (10), by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(11) failure of the debtor to pay any domestic
support obligation that first becomes payable after
the date on which the petition is filed.’’;
(8) in section 1322(a)—
(A) in paragraph (2), by striking ‘‘and’’ at
the end;
(B) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding in the end the following:
‘‘(4) notwithstanding any other provision of this
section, a plan may provide for less than full pay-
ment of all amounts owed for a claim entitled to pri-
ority under section 507(a)(1)(B) only if the plan
provides that all of the debtor’s projected disposable
income for a 5-year period beginning on the date
that the first payment is due under the plan will be
applied to make payments under the plan.’’;
(9) in section 1322(b)—
(A) in paragraph (9), by striking ‘‘; and’’
and inserting a semicolon;
(B) by redesignating paragraph (10) as
paragraph (11); and
(C) inserting after paragraph (9) the fol-
lowing:
‘‘(10) provide for the payment of interest accru-
ing after the date of the filing of the petition on un-
secured claims that are nondischargeable under sec-
tion 1328(a), except that such interest may be paid
only to the extent that the debtor has disposable in-
come available to pay such interest after making
provision for full payment of all allowed claims;
and’’;
(10) in section 1325(a) (as amended by this
Act), by adding at the end the following:
‘‘(8) the debtor is required by a judicial or ad-
ministrative order or statute to pay a domestic sup-
port obligation, the debtor has paid all amounts pay-
able under such order or statute for such obligation
that first becomes payable after the date on which
the petition is filed; and’’;
(11) in section 1328(a), in the matter preceding
paragraph (1), by inserting ‘‘, and in the case of a
debtor who is required by a judicial or administra-
tive order to pay a domestic support obligation, after
such debtor certifies that all amounts payable under
such order or statute that are due on or before the
date of the certification (including amounts due be-
fore the petition was filed, but only to the extent
provided for in the plan) have been paid’’ after
‘‘completion by the debtor of all payments under the
plan’’.
SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, is
amended by striking paragraph (2) and inserting the fol-
lowing:
‘‘(2) under subsection (a)—
‘‘(A) of the commencement or continuation
of a civil action or proceeding—
‘‘(i) for the establishment of paternity;
‘‘(ii) for the establishment or modi-
fication of an order for domestic support
obligations;
‘‘(iii) concerning child custody or visi-
tation;
‘‘(iv) for the dissolution of a marriage,
except to the extent that such proceeding
seeks to determine the division of property
that is property of the estate; or
‘‘(v) regarding domestic violence;
‘‘(B) the collection of a domestic support
obligation from property that is not property of
the estate;
‘‘(C) with respect to the withholding of in-
come that is property of the estate or property
of the debtor for payment of a domestic support
obligation under a judicial or administrative
order;
‘‘(D) the withholding, suspension, or re-
striction of drivers’ licenses, professional and
occupational licenses, and recreational licenses
under State law, as specified in section
466(a)(16) of the Social Security Act (42
U.S.C. 666(a)(16));
‘‘(E) the reporting of overdue support
owed by a parent to any consumer reporting
agency as specified in section 466(a)(7) of the
Social Security Act (42 U.S.C. 666(a)(7));
‘‘(F) the interception of tax refunds, as
specified in sections 464 and 466(a)(3) of the
Social Security Act (42 U.S.C. 664 and
666(a)(3)) or under an analogous State law; or
‘‘(G) the enforcement of medical obliga-
tions as specified under title IV of the Social
Security Act (42 U.S.C. 601 et seq.);’’.
SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR
ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is
amended—
(1) in subsection (a)—
(A) by striking paragraph (5) and insert-
ing the following:
‘‘(5) for a domestic support obligation;’’;
(B) in paragraph (15)—
(i) by inserting ‘‘to a spouse, former
spouse, or child of the debtor and’’ before
‘‘not of the kind’’;
(ii) by inserting ‘‘or’’ after ‘‘court of
record,’’; and
(iii) by striking ‘‘unless—’’ and all
that follows through the end of the para-
graph and inserting a semicolon; and
(C) by striking paragraph (18); and
(2) in subsection (c), by striking ‘‘(6), or (15)’’
each place it appears and inserting ‘‘or (6)’’.
SEC. 216. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is
amended—
(1) in subsection (c), by striking paragraph (1)
and inserting the following:
‘‘(1) a debt of a kind specified in paragraph (1)
or (5) of section 523(a) (in which case, notwith-
standing any provision of applicable nonbankruptcy
law to the contrary, such property shall be liable for
a debt of a kind specified in section 523(a)(5));’’;
(2) in subsection (f)(1)(A), by striking the dash
and all that follows through the end of the subpara-
graph and inserting ‘‘of a kind that is specified in
section 523(a)(5); or’’; and
(3) in subsection (g)(2), by striking ‘‘subsection
(f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.
SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS
AGAINST 
PREFERENTIAL 
TRANSFER 
MO-
TIONS.
Section 547(c)(7) of title 11, United States Code, is
amended to read as follows:
‘‘(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obliga-
tion;’’.
SEC. 218. DISPOSABLE INCOME DEFINED.
(a) CONFIRMATION OF PLAN UNDER CHAPTER 12.—
Section 1225(b)(2)(A) of title 11, United States Code, is
amended by inserting ‘‘or for a domestic support obliga-
tion that first becomes payable after the date on which
the petition is filed’’ after ‘‘dependent of the debtor’’.
(b) CONFIRMATION OF PLAN UNDER CHAPTER 13.—
Section 1325(b)(2)(A) of title 11, United States Code, is
amended by inserting ‘‘or for a domestic support obliga-
tion that first becomes payable after the date on which
the petition is filed’’ after ‘‘dependent of the debtor’’.
SEC. 219. COLLECTION OF CHILD SUPPORT.
(a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec-
tion 704 of title 11, United States Code, as amended by
this Act, is amended—
(1) in subsection (a)—
(A) in paragraph (8), by striking ‘‘and’’ at
the end;
(B) in paragraph (9), by striking the pe-
riod and inserting a semicolon; and
(C) by adding at the end the following:
‘‘(10) if, with respect to an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in sub-
section (c); and’’; and
(2) by adding at the end the following:
‘‘(c)(1) In any case described in subsection (a)(10),
the trustee shall—
‘‘(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act (42 U.S.C. 664, 666) for the State in which the
holder resides for assistance in collecting child sup-
port during and after the bankruptcy procedures;
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
‘‘(iii) include in the notice an explanation of the
rights of the holder of the claim to payment of the
claim under this chapter; and
‘‘(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim; and
‘‘(iii) at such time as the debtor is granted a
discharge under section 727, notify the holder of
that claim and the State child support agency of the
State in which that holder resides of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor;
‘‘(III) the last recent known name and ad-
dress of the debtor’s employer; and
‘‘(IV) with respect to the debtor’s case, the
name of each creditor that holds a claim that—
‘‘(aa) is not discharged under para-
graph (2), (4), or (14A) of section 523(a);
or
‘‘(bb) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in para-
graph (1)(B)(iii)(IV) the last known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making that disclosure.’’.
(b) DUTIES OF TRUSTEE UNDER CHAPTER 11.—
Section 1106 of title 11, United States Code, is
amended—
(1) in subsection (a)—
(A) in paragraph (6), by striking ‘‘and’’ at
the end;
(B) in paragraph (7), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(8) if, with respect to an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in sub-
section (c).’’; and
(2) by adding at the end the following:
‘‘(c)(1) In any case described in subsection (a)(7), the
trustee shall—
‘‘(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act (42 U.S.C. 664, 666) for the State in which the
holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
‘‘(B)(i) notify, in writing, the State child sup-
port agency (of the State in which the holder of the
claim resides) of the claim;
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim; and
‘‘(iii) at such time as the debtor is granted a
discharge under section 1141, notify the holder of
the claim and the State child support agency of the
State in which that holder resides of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor;
‘‘(III) the last recent known name and ad-
dress of the debtor’s employer; and
‘‘(IV) with respect to the debtor’s case, the
name of each creditor that holds a claim that—
‘‘(aa) is not discharged under para-
graph (2), (3), or (14) of section 523(a);
or
‘‘(bb) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in para-
graph (1)(B)(iii)(IV) the last known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making that disclosure.’’.
(c) DUTIES OF TRUSTEE UNDER CHAPTER 12.—
Section 1202 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (4), by striking ‘‘and’’ at
the end;
(B) in paragraph (5), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) if, with respect to an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in sub-
section (c).’’; and
(2) by adding at the end the following:
‘‘(c)(1) In any case described in subsection (b)(6), the
trustee shall—
‘‘(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act (42 U.S.C. 664, 666) for the State in which the
holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
‘‘(B)(i) notify, in writing, the State child sup-
port agency (of the State in which the holder of the
claim resides) of the claim;
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim; and
‘‘(iii) at such time as the debtor is granted a
discharge under section 1228, notify the holder of
the claim and the State child support agency of the
State in which that holder resides of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor;
‘‘(III) the last recent known name and ad-
dress of the debtor’s employer; and
‘‘(IV) with respect to the debtor’s case, the
name of each creditor that holds a claim that—
‘‘(aa) is not discharged under para-
graph (2), (4), or (14) of section 523(a);
or
‘‘(bb) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in para-
graph (1)(B)(iii)(IV) the last known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making that disclosure.’’.
(d) DUTIES OF TRUSTEE UNDER CHAPTER 13.—
Section 1302 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (4), by striking ‘‘and’’ at
the end;
(B) in paragraph (5), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) if, with respect to an individual debtor,
there is a claim for a domestic support obligation,
provide the applicable notification specified in sub-
section (d).’’; and
(2) by adding at the end the following:
‘‘(d)(1) In any case described in subsection (b)(6),
the trustee shall—
‘‘(A)(i) notify in writing the holder of the claim
of the right of that holder to use the services of a
State child support enforcement agency established
under sections 464 and 466 of the Social Security
Act (42 U.S.C. 664, 666) for the State in which the
holder resides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child sup-
port enforcement agency; and
‘‘(B)(i) notify in writing the State child support
agency of the State in which the holder of the claim
resides of the claim;
‘‘(ii) include in the notice under this paragraph
the name, address, and telephone number of the
holder of the claim; and
‘‘(iii) at such time as the debtor is granted a
discharge under section 1328, notify the holder of
the claim and the State child support agency of the
State in which that holder resides of—
‘‘(I) the granting of the discharge;
‘‘(II) the last recent known address of the
debtor;
‘‘(III) the last recent known name and ad-
dress of the debtor’s employer; and
‘‘(IV) with respect to the debtor’s case, the
name of each creditor that holds a claim that—
‘‘(aa) is not discharged under para-
graph (2), (4), or (14) of section 523(a);
or
‘‘(bb) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) A holder of a claim or a State child support
agency may request from a creditor described in para-
graph (1)(B)(iii)(IV) the last known address of the debtor.
‘‘(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address
of a debtor in connection with a request made under sub-
paragraph (A) shall not be liable to the debtor or any
other person by reason of making that disclosure.’’.
SEC. 
220. 
NONDISCHARGEABILITY 
OF 
CERTAIN 
EDU-
CATIONAL BENEFITS AND LOANS.
Section 523(a) of title 11, United States Code, is
amended by striking paragraph (8) and inserting the fol-
lowing:
‘‘(8) unless excepting such debt from discharge
under this paragraph would impose an undue hard-
ship on the debtor and the debtor’s dependents,
for—
‘‘(A)(i) an educational benefit overpayment
or loan made, insured, or guaranteed by a gov-
ernmental unit, or made under any program
funded in whole or in part by a governmental
unit or nonprofit institution; or
‘‘(ii) an obligation to repay funds received
as an educational benefit, scholarship, or sti-
pend; or
‘‘(B) any other educational loan that is a
qualified education loan, as that term is defined
in section 221(e)(1) of the Internal Revenue
Code of 1986, incurred by an individual debt-
or;’’.
Subtitle C—Other Consumer
Protections
SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANK-
RUPTCY FILINGS.
Section 110 of title 11, United States Code, is
amended—
(1) in subsection (a)(1), by striking ‘‘a person,
other than an attorney or an employee of an attor-
ney’’ and inserting ‘‘the attorney for the debtor or
an employee of such attorney under the direct super-
vision of such attorney’’;
(2) in subsection (b)—
(A) in paragraph (1), by adding at the end
the following: ‘‘If a bankruptcy petition pre-
parer is not an individual, then an officer, prin-
cipal, responsible person, or partner of the pre-
parer shall be required to—
‘‘(A) sign the document for filing; and
‘‘(B) print on the document the name and ad-
dress of that officer, principal, responsible person or
partner.’’; and
(B) by striking paragraph (2) and insert-
ing the following:
‘‘(2)(A) Before preparing any document for filing or
accepting any fees from a debtor, the bankruptcy petition
preparer shall provide to the debtor a written notice to
debtors concerning bankruptcy petition preparers, which
shall be on an official form issued by the Judicial Con-
ference of the United States.
‘‘(B) The notice under subparagraph (A)—
‘‘(i) shall inform the debtor in simple language
that a bankruptcy petition preparer is not an attor-
ney and may not practice law or give legal advice;
‘‘(ii) may contain a description of examples of
legal advice that a bankruptcy petition preparer is
not authorized to give, in addition to any advice that
the preparer may not give by reason of subsection
(e)(2); and
‘‘(iii) shall—
‘‘(I) be signed by—
‘‘(aa) the debtor; and
‘‘(bb) the bankruptcy petition pre-
parer, under penalty of perjury; and
‘‘(II) be filed with any document for fil-
ing.’’;
(3) in subsection (c)—
(A) in paragraph (2)—
(i) by striking ‘‘(2) For purposes’’ and
inserting ‘‘(2)(A) Subject to subparagraph
(B), for purposes’’; and
(ii) by adding at the end the fol-
lowing:
‘‘(B) If a bankruptcy petition preparer is not an indi-
vidual, the identifying number of the bankruptcy petition
preparer shall be the Social Security account number of
the officer, principal, responsible person, or partner of the
preparer.’’; and
(B) by striking paragraph (3);
(4) in subsection (d)—
(A) by striking ‘‘(d)(1)’’ and inserting
‘‘(d)’’; and
(B) by striking paragraph (2);
(5) in subsection (e)—
(A) by striking paragraph (2); and
(B) by adding at the end the following:
‘‘(2)(A) A bankruptcy petition preparer may not offer
a potential bankruptcy debtor any legal advice, including
any legal advice described in subparagraph (B).
‘‘(B) The legal advice referred to in subparagraph
(A) includes advising the debtor—
‘‘(i) whether—
‘‘(I) to file a petition under this title; or
‘‘(II) commencing a case under chapter 7,
11, 12, or 13 is appropriate;
‘‘(ii) whether the debtor’s debts will be elimi-
nated or discharged in a case under this title;
‘‘(iii) whether the debtor will be able to retain
the debtor’s home, car, or other property after com-
mencing a case under this title;
‘‘(iv) concerning—
‘‘(I) the tax consequences of a case
brought under this title; or
‘‘(II) the dischargeability of tax claims;
‘‘(v) whether the debtor may or should promise
to repay debts to a creditor or enter into a reaffir-
mation agreement with a creditor to reaffirm a debt;
‘‘(vi) concerning how to characterize the nature
of the debtor’s interests in property or the debtor’s
debts; or
‘‘(vii) concerning bankruptcy procedures and
rights.’’;
(6) in subsection (f)—
(A) by striking ‘‘(f)(1)’’ and inserting
‘‘(f)’’; and
(B) by striking paragraph (2);
(7) in subsection (g)—
(A) by striking ‘‘(g)(1)’’ and inserting
‘‘(g)’’; and
(B) by striking paragraph (2);
(8) in subsection (h)—
(A) 
by 
redesignating 
paragraphs 
(1)
through (4) as paragraphs (2) through (5), re-
spectively;
(B) by inserting before paragraph (2), as
redesignated, the following:
‘‘(1) The Supreme Court may promulgate rules under
section 2075 of title 28, or the Judicial Conference of the
United States may prescribe guidelines, for setting a max-
imum allowable fee chargeable by a bankruptcy petition
preparer. A bankruptcy petition preparer shall notify the
debtor of any such maximum amount before preparing any
document for filing for a debtor or accepting any fee from
the debtor.’’;
(C) in paragraph (2), as redesignated—
(i) by striking ‘‘Within 10 days after
the date of filing a petition, a bankruptcy
petition preparer shall file a’’ and inserting
‘‘A’’;
(ii) by inserting ‘‘by the bankruptcy
petition preparer shall be filed together
with the petition,’’ after ‘‘perjury’’; and
(iii) by adding at the end the fol-
lowing: ‘‘If rules or guidelines setting a
maximum fee for services have been pro-
mulgated or prescribed under paragraph
(1), the declaration under this paragraph
shall include a certification that the bank-
ruptcy petition preparer complied with the
notification requirement under paragraph
(1).’’;
(D) by striking paragraph (3), as redesig-
nated, and inserting the following:
‘‘(3)(A) The court shall disallow and order the
immediate turnover to the bankruptcy trustee any
fee referred to in paragraph (2) found to be in ex-
cess of the value of any services—
‘‘(i) rendered by the preparer during the
12-month period immediately preceding the
date of filing of the petition; or
‘‘(ii) found to be in violation of any rule or
guideline promulgated or prescribed under
paragraph (1).
‘‘(B) All fees charged by a bankruptcy petition
preparer may be forfeited in any case in which the
bankruptcy petition preparer fails to comply with
this subsection or subsection (b), (c), (d), (e), (f), or
(g).
‘‘(C) An individual may exempt any funds re-
covered 
under 
this 
paragraph 
under 
section
522(b).’’; and
(E) in paragraph (4), as redesignated, by
striking ‘‘or the United States trustee’’ and in-
serting ‘‘the United States trustee, the bank-
ruptcy administrator, or the court, on the ini-
tiative of the court,’’;
(9) in subsection (i)(1), by striking the matter
preceding subparagraph (A) and inserting the fol-
lowing:
‘‘(i)(1) If a bankruptcy petition preparer violates this
section or commits any act that the court finds to be
fraudulent, unfair, or deceptive, on motion of the debtor,
trustee, United States trustee, or bankruptcy adminis-
trator, and after the court holds a hearing with respect
to that violation or act, the court shall order the bank-
ruptcy petition preparer to pay to the debtor—’’;
(10) in subsection (j)—
(A) in paragraph (2)—
(i) in subparagraph (A)(i)(I), by strik-
ing ‘‘a violation of which subjects a person
to criminal penalty’’;
(ii) in subparagraph (B)—
(I) by striking ‘‘or has not paid
a penalty’’ and inserting ‘‘has not
paid a penalty’’; and
(II) by inserting ‘‘or failed to dis-
gorge all fees ordered by the court’’
after ‘‘a penalty imposed under this
section,’’;
(B) by redesignating paragraph (3) as
paragraph (4); and
(C) by inserting after paragraph (2) the
following:
‘‘(3) The court, as part of its contempt power, may
enjoin a bankruptcy petition preparer that has failed to
comply with a previous order issued under this section.
The injunction under this paragraph may be issued upon
motion of the court, the trustee, the United States trustee,
or the bankruptcy administrator.’’; and
(11) by adding at the end the following:
‘‘(l)(1) A bankruptcy petition preparer who fails to
comply with any provision of subsection (b), (c), (d), (e),
(f), (g), or (h) may be fined not more than $500 for each
such failure.
‘‘(2) The court shall triple the amount of a fine as-
sessed under paragraph (1) in any case in which the court
finds that a bankruptcy petition preparer—
‘‘(A) advised the debtor to exclude assets or in-
come that should have been included on applicable
schedules;
‘‘(B) advised the debtor to use a false Social
Security account number;
‘‘(C) failed to inform the debtor that the debtor
was filing for relief under this title; or
‘‘(D) prepared a document for filing in a man-
ner that failed to disclose the identity of the pre-
parer.
‘‘(3) The debtor, the trustee, a creditor, the United
States trustee, or the bankruptcy administrator may file
a motion for an order imposing a fine on the bankruptcy
petition preparer for each violation of this section.
‘‘(4)(A) Fines imposed under this subsection in judi-
cial districts served by United States trustees shall be paid
to the United States trustee, who shall deposit an amount
equal to such fines in a special account of the United
States Trustee System Fund referred to in section
586(e)(2) of title 28. Amounts deposited under this sub-
paragraph shall be available to fund the enforcement of
this section on a national basis.
‘‘(B) Fines imposed under this subsection in judicial
districts served by bankruptcy administrators shall be de-
posited as offsetting receipts to the fund established under
section 1931 of title 28, and shall remain available until
expended to reimburse any appropriation for the amount
paid out of such appropriation for expenses of the oper-
ation and maintenance of the courts of the United
States.’’.
SEC. 222. SENSE OF CONGRESS.
It is the sense of Congress that States should develop
curricula relating to the subject of personal finance, de-
signed for use in elementary and secondary schools.
SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED
STATES CODE.
Section 507(a) of title 11, United States Code, is
amended by inserting after paragraph (9) the following:
‘‘(10) Tenth, allowed claims for death or per-
sonal injuries resulting from the operation of a
motor vehicle or vessel if such operation was unlaw-
ful because the debtor was intoxicated from using al-
cohol, a drug, or another substance.’’.
SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANK-
RUPTCY.
(a) IN GENERAL.—Section 522 of title 11, United
States Code, is amended—
(1) in subsection (b)—
(A) in paragraph (2)—
(i) in subparagraph (A), by striking
‘‘and’’ at the end;
(ii) in subparagraph (B), by striking
the period at the end and inserting ‘‘;
and’’;
(iii) by adding at the end the fol-
lowing:
‘‘(C) retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’; and
(iv) by striking ‘‘(2)(A) any property’’
and inserting:
‘‘(3) Property listed in this paragraph is—
‘‘(A) any property’’;
(B) by striking paragraph (1) and insert-
ing:
‘‘(2) Property listed in this paragraph is property
that is specified under subsection (d), unless the State law
that is applicable to the debtor under paragraph (3)(A)
specifically does not so authorize.’’;
(C) by striking ‘‘(b) Notwithstanding’’ and
inserting ‘‘(b)(1) Notwithstanding’’;
(D) by striking ‘‘paragraph (2)’’ each place
it appears and inserting ‘‘paragraph (3)’’;
(E) by striking ‘‘paragraph (1)’’ each place
it appears and inserting ‘‘paragraph (2)’’;
(F) by striking ‘‘Such property is—’’; and
(G) by adding at the end the following:
‘‘(4) For purposes of paragraph (3)(C) and sub-
section (d)(12), the following shall apply:
‘‘(A) If the retirement funds are in a retirement
fund that has received a favorable determination
under section 7805 of the Internal Revenue Code of
1986, and that determination is in effect as of the
date of the commencement of the case under section
301, 302, or 303 of this title, those funds shall be
presumed to be exempt from the estate.
‘‘(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
under such section 7805, those funds are exempt
from the estate if the debtor demonstrates that—
‘‘(i) no prior determination to the contrary
has been made by a court or the Internal Rev-
enue Service; and
‘‘(ii)(I) the retirement fund is in substan-
tial compliance with the applicable requirements
of the Internal Revenue Code of 1986; or
‘‘(II) the retirement fund fails to be in
substantial compliance with the applicable re-
quirements of the Internal Revenue Code of
1986 and the debtor is not materially respon-
sible for that failure.
‘‘(C) A direct transfer of retirement funds from
1 fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986, under
section 401(a)(31) of the Internal Revenue Code of
1986, or otherwise, shall not cease to qualify for ex-
emption under paragraph (3)(C) or subsection
(d)(12) by reason of that direct transfer.
‘‘(D)(i) Any distribution that qualifies as an eli-
gible rollover distribution within the meaning of sec-
tion 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
104
‘‘(B) with respect to the aggregate amount
paid or contributed to such program having the
same designated beneficiary, only so much of
such amount as does not exceed the total con-
tributions permitted under section 529(b)(7) of
such Code with respect to such beneficiary, as
adjusted beginning on the date of the filing of
the petition by the annual increase or decrease
(rounded to the nearest tenth of 1 percent) in
the education expenditure category of the Con-
sumer Price Index prepared by the Department
of Labor; and
‘‘(C) in the case of funds paid or contrib-
uted to such program having the same des-
ignated beneficiary not earlier than 720 days
nor later than 365 days before such date, only
so much of such funds as does not exceed
$5,000;’’; and
(2) by adding at the end the following:
‘‘(e) In determining whether any of the relationships
specified in paragraph (5)(A) or (6)(A) of subsection (b)
exists, a legally adopted child of an individual (and a child
who is a member of an individual’s household, if placed
with such individual by an authorized placement agency
for legal adoption by such individual), or a foster child