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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.
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Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Prohibition on disclosure of identity of minor children.
TITLE III—DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not complete in-
tended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. 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.
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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.
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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. 907A. Securities broker and commodity broker liquidation.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
Sec. 912. Asset-backed securitizations.
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.
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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.
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.
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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
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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,
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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, or other applicable
Federal law. The expenses included in the debtor’s month-
ly expenses described in the preceding sentence shall be
kept confidential by the court. In addition, if it is dem-
onstrated that it is reasonable and necessary, the debtor’s
monthly expenses may also include an additional allowance
for food and clothing of up to 5 percent of the food and
clothing categories as specified by the National Standards
issued by the Internal Revenue Service.
‘‘(II) In addition, the debtor’s monthly expenses may
include, if applicable, the continuation of actual expenses
paid by the debtor that are reasonable and necessary for
care and support of an elderly, chronically ill, or disabled
household member or member of the debtor’s immediate
family (including parents, grandparents, 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
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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 or public elementary or secondary school,
if the debtor provides documentation of such expenses and
a detailed 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
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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
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‘‘(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-
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‘‘(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.
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‘‘(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
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‘‘(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-
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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.’’.
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(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—
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(1) by inserting ‘‘(a)’’ before ‘‘The trustee
shall—’’; and
(2) by adding at the end the following:
‘‘(b)(1) With respect to an individual debtor under
this chapter—
‘‘(A) the United States trustee or bankruptcy
administrator shall review all materials filed by the
debtor and, not later than 10 days after the date of
the first meeting of creditors, file with the court a
statement as to whether the debtor’s case would be
presumed to be an abuse under section 707(b); and
‘‘(B) not later than 5 days after receiving a
statement under subparagraph (A), the court shall
provide a copy of the statement to all creditors.
‘‘(2) The United States trustee or bankruptcy admin-
istrator shall, not later than 30 days after the date of fil-
ing a statement under paragraph (1), either file a motion
to dismiss or convert under section 707(b) or file a state-
ment setting forth the reasons the United States trustee
or bankruptcy administrator does not believe that such a
motion would be appropriate, if the United States trustee
or bankruptcy administrator determines that the debtor’s
case should be presumed to be an abuse under section
707(b) and the product of the debtor’s current monthly
income, multiplied by 12 is not less than—