In the Senate of the United States,
July 17, 2001.
Resolved, That the bill from the House of Representa-
tives (H.R. 333) entitled ‘‘An Act to amend title 11, United
States Code, and for other purposes.’’, do pass with the fol-
lowing
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Bankruptcy Reform Act of 2001’’.
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(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; 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.
Sec. 204. Preservation of claims and defenses upon sale of predatory loans.
Sec. 205. GAO study on reaffirmation process.
Subtitle B—Priority Child Support
Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases involving
domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation pro-
ceedings.
Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential transfer mo-
tions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and loans.
Subtitle C—Other Consumer Protections
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of nonpublic personal information.
Sec. 232. Consumer privacy ombudsman.
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Sec. 233. 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. Limitation.
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. Excluding employee benefit plan participant contributions and other
property from the estate.
Sec. 323. Exclusive jurisdiction in matters involving bankruptcy professionals.
Sec. 324. United States trustee program filing fee increase.
Sec. 325. Sharing of compensation.
Sec. 326. Fair valuation of collateral.
Sec. 327. Defaults based on nonmonetary obligations.
Sec. 328. Nondischargeability of debts incurred through violations of laws relating
to the provision of lawful goods and services.
Sec. 329. Clarification of postpetition wages and benefits.
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.
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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.
Sec. 420. Duties with respect to a debtor who is a plan administrator of an em-
ployee benefit plan.
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.
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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 insured
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/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.
Sec. 913. Effective date; application of amendments.
Sec. 914. Savings clause.
TITLE X—PROTECTION OF FAMILY FARMERS AND FAMILY
FISHERMEN
Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
Sec. 1004. Definition of family farmer.
Sec. 1005. Elimination of requirement that family farmer and spouse receive over
50 percent of income from farming operation in year prior to
bankruptcy.
Sec. 1006. Prohibition of retroactive assessment of disposable income.
Sec. 1007. Family fishermen.
TITLE XI—HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health care business
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.
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TITLE XII—TECHNICAL AMENDMENTS
Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare bank-
ruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Bankruptcy cases and proceedings.
Sec. 1220. Knowing disregard of bankruptcy law or rule.
Sec. 1221. Transfers made by nonprofit charitable corporations.
Sec. 1222. Protection of valid purchase money security interests.
Sec. 1223. Bankruptcy judgeships.
Sec. 1224. Compensating trustees.
Sec. 1225. Amendment to section 362 of title 11, United States Code.
Sec. 1226. Judicial education.
Sec. 1227. Reclamation.
Sec. 1228. Providing requested tax documents to the court.
Sec. 1229. Encouraging creditworthiness.
Sec. 1230. Property no longer subject to redemption.
Sec. 1231. Trustees.
Sec. 1232. Bankruptcy forms.
Sec. 1233. Expedited appeals of bankruptcy cases to courts of appeals.
Sec. 1234. Exemptions.
Sec. 1235. Involuntary cases.
Sec. 1236. Federal election law fines and penalties as nondischargeable debt.
Sec. 1237. No bankruptcy for insolvent political committees.
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 students.
Sec. 1309. Clarification of clear and conspicuous.
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TITLE XIV—EMERGENCY ENERGY ASSISTANCE AND CONSERVATION
MEASURES
Sec. 1401. Short title.
Sec. 1402. Findings and purposes.
Sec. 1403. Increased funding for LIHEAP, weatherization and State energy
grants.
Sec. 1404. Federal energy management reviews.
Sec. 1405. Cost savings from replacement facilities.
Sec. 1406. Repeal of Energy Savings Performance Contract sunset.
Sec. 1407. Energy Savings Performance Contract definitions.
Sec. 1408. Effective date.
TITLE XV—GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
Sec. 1501. Effective date; application of amendments.
TITLE XVI—MISCELLANEOUS PROVISIONS
Sec. 1601. Reimbursement of research, development, and maintenance costs.
Sec. 1602. Study of the effect of the Bankruptcy Reform Act of 2001.
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 inserting
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)’’;
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(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) whether
the granting of relief would be an abuse of the provisions
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 multi-
plied by 60 is not less than the lesser of—
‘‘(I) 25 percent of the debtor’s nonpriority unse-
cured claims in the case, or $6,000, whichever is
greater; or
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‘‘(II) $10,000.
‘‘(ii)(I) The debtor’s monthly expenses shall be the debt-
or’s applicable monthly expense amounts specified under
the National Standards and Local Standards, and the debt-
or’s actual monthly expenses for the categories specified as
Other Necessary Expenses issued by the Internal 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 debtor shall not include any pay-
ments for debts. In addition, the debtor’s monthly expenses
shall include the debtor’s reasonably necessary expenses in-
curred to maintain the safety of the debtor and the family
of the debtor from family violence as identified under sec-
tion 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 addition, if it is demonstrated that it is reasonable
and necessary, the debtor’s monthly expenses may also in-
clude an additional allowance for food and clothing of up
to 5 percent of the food and clothing categories as specified
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by the National Standards issued by the Internal Revenue
Service.
‘‘(II) In addition, the debtor’s monthly expenses may
include, if applicable, the continuation of actual expenses
paid by the debtor that are reasonable and necessary for
care and support of an elderly, chronically ill, or disabled
household member or member of the debtor’s immediate
family (including parents, grandparents, siblings, children,
and grandchildren of the debtor, the dependents of the debt-
or, 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 ad-
ministrative 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 de-
tailed explanation of why such expenses are reasonable and
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necessary, and that such expenses are not already accounted
for in the Internal Revenue Service standards referred to
in section 707(b)(2) of this title.
‘‘(V) In addition, if it is demonstrated that it is rea-
sonable and necessary, the debtor’s monthly expenses may
also include an additional allowance for housing and utili-
ties, in excess of the allowance specified by the Local Stand-
ards for housing and utilities issued by the International
Revenue Service, based on the actual expenses for home en-
ergy costs, if the debtor provides documentation of such ex-
penses.
‘‘(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 depend-
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ents, that serves as collateral for secured debts;
divided by
‘‘(II) 60.
‘‘(iv) The debtor’s expenses for payment of all priority
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 additional
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 ad-
justment to income; and
‘‘(bb) a detailed explanation of the special
circumstances that make such expenses or adjust-
ment to income necessary and reasonable.
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‘‘(iii) The debtor shall attest under oath to the accu-
racy of any information provided to demonstrate that addi-
tional expenses or adjustments to income are required.
‘‘(iv) The presumption of abuse may only be rebutted
if the additional expenses or adjustments to income referred
to in clause (i) cause the product of the debtor’s current
monthly income reduced by the amounts determined under
clauses (ii), (iii), and (iv) of subparagraph (A) when multi-
plied by 60 to be less than the lesser of—
‘‘(I) 25 percent of the debtor’s nonpriority unse-
cured 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 in-
clude a statement of the debtor’s current monthly income,
and the calculations that determine whether a presumption
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 subpara-
graph (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
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‘‘(B) the totality of the circumstances (including
whether the debtor seeks to reject a personal services
contract and the financial need for such rejection as
sought by the debtor) of the debtor’s financial situa-
tion demonstrates abuse.
‘‘(4)(A) The court shall order the counsel for the debtor
to reimburse the trustee for all reasonable costs in pros-
ecuting a motion brought under section 707(b), including
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 subsection;
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 violated
rule 9011 of the Federal Rules of Bankruptcy
Procedure.
‘‘(B) If the court finds that the attorney for the debtor
violated rule 9011 of the Federal Rules of Bankruptcy Pro-
cedure, at a minimum, the court shall order—
‘‘(i) the assessment of an appropriate civil pen-
alty against the counsel for the debtor; and
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‘‘(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 mo-
tion, the signature of an attorney shall constitute a certifi-
cation that the attorney has—
‘‘(i) performed a reasonable investigation into
the circumstances that gave rise to the petition, plead-
ing, 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, modifica-
tion, 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
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than a trustee, United States trustee, or bankruptcy admin-
istrator) 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 aggregate
amount less than $1,000 shall not be subject to subpara-
graph (A)(ii)(I).
‘‘(C) For purposes of this paragraph—
‘‘(i) the term ‘small business’ means an unincor-
porated business, partnership, corporation, associa-
tion, 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 employees
of—
‘‘(I) a parent corporation; and
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‘‘(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 income
of the applicable State for a family of the same num-
ber or fewer individuals last reported by the Bureau
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
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bring a motion under paragraph (2), 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 income
of the applicable State for a family of the same num-
ber or fewer individuals last reported by the Bureau
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
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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, which shall be
the date which is the last day of the calendar
month immediately preceding the date of the
bankruptcy filing. If the debtor is providing the
debtor’s current monthly income at the time of
the filing and otherwise the date of determina-
tion shall be such date on which the debtor’s cur-
rent monthly income is determined by the court
for the purposes of this Act; and
‘‘(B) includes any amount paid by any en-
tity other than the debtor (or, in a joint case, the
debtor and the debtor’s spouse), on a regular
basis 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 Secu-
rity Act and payments to victims of war crimes
or crimes against humanity on account of their
status as victims of such crimes;’’.
(c) UNITED STATES TRUSTEE AND BANKRUPTCY AD-
MINISTRATOR 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 ad-
ministrator 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 adminis-
trator shall, not later than 30 days after the date of filing
a statement under paragraph (1), either file a motion to
dismiss or convert under section 707(b) or file a statement
setting forth the reasons the United States trustee or bank-
ruptcy administrator does not believe that such a motion
would be appropriate, if the United States trustee or bank-
ruptcy 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, multi-
plied by 12 is not less than—
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‘‘(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 subsection,
the United States trustee or bankruptcy administrator may
decline to file a motion to dismiss or convert pursuant to
section 704(b)(2) if the product of the debtor’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 applicable
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
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‘‘(B) the product of the debtor’s current monthly
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 triggered.’’.
(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 communicated
ex parte, unless otherwise permitted by applicable law),
United States trustee, bankruptcy administrator or trustee.
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(f) DISMISSAL FOR CERTAIN CRIMES.—Section 707 of
title 11, United States Code, as amended by this section,
is amended by adding at the end the following:
‘‘(c)(1) In this subsection—
‘‘(A) the term ‘crime of violence’ has the meaning
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 notice
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 obliga-
tion.’’.
(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;
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(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 petition
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 re-
ceived 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 nec-
essary 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 pay-
able after the date the petition is filed and for
charitable contributions (that meet the definition
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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 exceed 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 section
707(b)(2), if the debtor has current monthly income,
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 ap-
plicable 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
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‘‘(C) in the case of a debtor in a household
exceeding 4 individuals, the highest median fam-
ily income of the applicable State for a family
of 4 or fewer individuals last reported by the Bu-
reau of the Census, plus $525 per month for each
individual in excess of 4.’’.
(i) SPECIAL ALLOWANCE FOR HEALTH INSURANCE.—
Section 1329(a) of title 11, United States Code, is amended
by inserting the following new paragraph—
‘‘(4) reduce amounts to be paid under the plan
by the actual amount expended by the debtor to pur-
chase health insurance for the debtor and any depend-
ent of the debtor (if those dependents do not otherwise
have health insurance coverage) if the debtor docu-
ments the cost of such insurance and demonstrates
that—
‘‘(A) such expenses are reasonable and nec-
essary;
‘‘(B)(i) if the debtor previously paid for
health insurance, the amount is not materially
larger than the cost the debtor previously paid or
the cost necessary to maintain the lapsed policy,
or;
‘‘(ii) if the debtor did not have health insur-
ance, the amount is not materially larger than
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the reasonable cost that would be incurred by a
debtor who purchases health insurance and who
has similar income, expenses, age, health status,
and lives in the same geographic location with
the same number of dependents that do not other-
wise have health insurance coverage; and
‘‘(C) the amount is not otherwise allowed
for purposes of determining disposable income
under section 1325(b) of this title.
Upon request of any party in interest the debtor shall file
proof that a health insurance policy was purchased.’’.
(j) 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 Congress
that the Secretary of the Treasury has the authority to alter
the Internal Revenue Service standards established 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
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Executive Office for United States Trustees shall sub-
mit a report to the Committee on the Judiciary of the
Senate and the Committee on the Judiciary of the
House of Representatives containing the findings of
the Director regarding the utilization of Internal Rev-
enue 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 para-
graph (1) may include recommendations for amend-
ments to title 11, United States Code, that are con-
sistent with the findings of the Director under para-
graph (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—
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‘‘(A) chapters 7, 11, 12, and 13 and the
general purpose, benefits, and costs of proceeding
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 connection
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 Director of
the Executive Office for United States Trustees (in this sec-
tion 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 appointed under
chapter 13 of title 11, United States Code, and who operate
financial management education programs for debtors, and
shall develop a financial management training curriculum
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and materials that can be used to educate individual debt-
ors 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 manage-
ment training curriculum and materials developed
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 evalu-
ate 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 Com-
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mission (October 20, 1997) that are representa-
tive 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 con-
cluding such evaluation, the Director shall submit a
report to the Speaker of the House of Representatives
and the President pro tempore of the Senate, for refer-
ral 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 indi-
vidual 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
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Internet) that outlined the opportunities for available credit
counseling and assisted that individual in performing a re-
lated 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 dis-
trict are not reasonably able to provide adequate services
to the additional individuals who would otherwise seek cred-
it counseling from that agency by reason of the require-
ments of paragraph (1).
‘‘(B) Each United States trustee or bankruptcy admin-
istrator that makes a determination described in subpara-
graph (A) shall review that determination not later than
1 year after the date of that determination, and not less
frequently than every year thereafter. Notwithstanding the
preceding sentence, a nonprofit budget and credit coun-
seling service may be disapproved by the United States
trustee or bankruptcy administrator at any time.
‘‘(3)(A) Subject to subparagraph (B), the requirements
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);
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‘‘(ii) states that the debtor requested credit coun-
seling services from an approved nonprofit budget
and credit counseling agency, but was unable to ob-
tain 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 sub-
paragraph (A) shall cease to apply to that debtor on the
date on which the debtor meets the requirements of para-
graph (1), but in no case may the exemption apply to that
debtor after the date that is 30 days after the debtor 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.
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‘‘(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 adminis-
trator of that district determines that the approved
instructional courses are not adequate to service the
additional individuals required to complete such in-
structional 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 determina-
tion, and not less frequently than every year there-
after.’’.
(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 bankruptcy
court of that district determines that the approved instruc-
tional courses are not adequate to service the additional in-
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dividuals who would be required to complete the instruc-
tional course by reason of the requirements of this section.
‘‘(i) Each United States trustee or bankruptcy admin-
istrator that makes a determination described in subsection
(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 approved
nonprofit budget and credit counseling agency re-
ferred to in paragraph (1).’’.
(e) GENERAL PROVISIONS.—
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(1) IN GENERAL.—Chapter 1 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 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) currently
approved by the United States trustee or the bank-
ruptcy administrator for the district, as applicable;
and
‘‘(2) instructional courses concerning personal fi-
nancial 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 adminis-
trator shall only approve a credit counseling agency or in-
structional course concerning personal financial manage-
ment as follows:
‘‘(1) The United States trustee or bankruptcy ad-
ministrator shall have thoroughly reviewed the quali-
fications of the credit counseling agency or of the pro-
vider of the instructional course under the standards
set forth in this section, and the programs or instruc-
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tional 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 ad-
ministrator shall have determined that the credit
counseling agency or course of instruction fully satis-
fies the applicable standards set forth in this section.
‘‘(3) When an agency or course of instruction is
initially approved, such approval shall be for a pro-
bationary 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 district under
subsection (a) immediately prior to approval.
‘‘(4) At the conclusion of the probationary period
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 instruction
which has demonstrated during the probationary or
subsequent period that such agency or course of
instruction—
‘‘(A) has met the standards set forth under
this section during such period; and
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‘‘(B) can satisfy such standards in the fu-
ture.
‘‘(5) Not later than 30 days after any final deci-
sion under paragraph (4), that occurs either after the
expiration of the initial probationary period, or after
any 2-year period thereafter, an interested person
may seek judicial review of such decision in the ap-
propriate 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 effectively
with other matters as relate to the quality, effectiveness, 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 counseling
agency, the majority of the board of directors of
which—
‘‘(i) are not employed by the agency; and
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‘‘(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 cli-
ent funds, including an annual audit of the trust ac-
counts and appropriate employee bonding;
‘‘(D) provide full disclosures to clients, including
funding sources, counselor qualifications, possible im-
pact 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 fi-
nancial 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 counseling
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services to individuals in financial difficulty, includ-
ing the matters described in subparagraph (E);
‘‘(G) demonstrate adequate experience and back-
ground 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 adminis-
trator 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 meth-
odologies designed to assist debtors in under-
standing personal financial management and
that are consistent with stated objectives directly
related to the goals of such course of instruction;
‘‘(C) adequate facilities situated in reason-
ably convenient locations at which such course of
instruction is offered, except that such facilities
may include the provision of such course of in-
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struction or program by telephone or through the
Internet, if the course of instruction or program
is effective; and
‘‘(D) the preparation and retention of rea-
sonable records (which shall include the debtor’s
bankruptcy case number) to permit evaluation of
the effectiveness of such course of instruction or
program, including any evaluation of satisfac-
tion of course of instruction or program require-
ments for each debtor attending such course of
instruction or program, which shall be available
for inspection and evaluation by the Executive
Office for United States Trustees, the United
States trustee, bankruptcy administrator, or
chief bankruptcy judge for the district in which
such course of instruction or program is offered;
and
‘‘(2) for any 1-year period if the provider thereof
has demonstrated that the course meets the standards
of paragraph (1) and, in addition—
‘‘(A) has been effective in assisting a sub-
stantial number of debtors to understand per-
sonal financial management; and
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‘‘(B) is otherwise likely to increase substan-
tially debtor understanding of personal financial
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 coun-
seling agencies. The District Court may, at any time, re-
move from the approved list under subsection (a) a credit
counseling agency upon finding such agency does not meet
the qualifications of subsection (b).
‘‘(f) The United States trustee or bankruptcy adminis-
trator 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 maintained 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 con-
cerning 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—
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‘‘(A) any actual damages sustained by the debtor
as a result of the violation; and
‘‘(B) any court costs or reasonable attorneys’ fees
(as determined by the court) incurred in an action 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 following:
‘‘(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 com-
menced 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 administrative ex-
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penses 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 section 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 act-
ing on behalf of the debtor;
‘‘(B) the offer of the debtor under subparagraph
(A)—
‘‘(i) was made at least 60 days before the
filing of the petition; and
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‘‘(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 re-
payment 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 period
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 cre-
ated 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 payments
received under a plan confirmed under this title (including
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a plan of reorganization confirmed under chapter 11 of this
title), unless the plan is dismissed, in default, or the cred-
itor 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 con-
stitute a violation of an injunction under subsection (a)(2)
if the act of the creditor to collect and failure to credit pay-
ments 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 PRAC-
TICES.
(a) IN GENERAL.—Section 524 of title 11, United
States Code, as amended by this Act, is amended—
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(1) in subsection (c), by striking paragraph (2)
and inserting the following:
‘‘(2) the debtor received the disclosures described
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 paragraph,
together with the agreement, statement, declaration, motion
and order described, respectively, in paragraphs (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, ex-
cept that the phrases ‘Before agreeing to reaffirm a debt,
review these important disclosures’ and ‘Summary of Reaf-
firmation Agreement’ may be equally conspicuous. Disclo-
sures may be made in a different order and may use termi-
nology different from that set forth in paragraphs (2)
through (8), except that the terms ‘Amount Reaffirmed’ and
‘Annual Percentage Rate’ must be used where indicated.
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‘‘(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 disclosures:’;
‘‘(B) Under the heading ‘Summary of Reaffir-
mation Agreement’, the statement: ‘This Summary is
made pursuant to the requirements of the Bankruptcy
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—
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‘‘(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 sec-
tion 127(b) of the Truth in Lending Act (15
U.S.C. 1637(b) (5) and (6)), as applicable,
as disclosed to the debtor in the most recent
periodic statement prior to the agreement
or, if no such periodic statement 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 debt-
or, or if different simple interest rates apply
to different balances, the simple interest rate
applicable to each such balance, identifying
the amount of each such balance included in
the amount reaffirmed, or
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‘‘(III) if the entity making the disclo-
sure elects, to disclose the annual percentage
rate under subclause (I) and the simple in-
terest 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 reaf-
firmation agreement with respect to the
debt, or, if no such disclosure statement was
provided the debtor, 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 per-
centage 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 the debtor,
or if different simple interest rates apply to
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different balances, the simple interest rate
applicable to each such balance, identifying
the amount of such balance included in the
amount reaffirmed, or
‘‘(III) if the entity making the disclo-
sure elects, to disclose the annual percentage
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 interest rate
on your loan may be a variable interest rate which
changes from time to time, so that the annual per-
centage rate disclosed here may be higher or lower.’.
‘‘(G) If the debt is secured by a security interest
which has not been waived in whole or in part or de-
termined to be void by a final order of the court at
the time of the disclosure, by disclosing that a secu-
rity interest or lien in goods or property is asserted
over some or all of the obligations you are reaffirming
and listing the items and their original purchase
price that are subject to the asserted security interest,
or if not a purchase-money security interest then list-
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ing by items or types and the original amount of the
loan.
‘‘(H) At the election of the creditor, a statement
of the repayment schedule using 1 or a combination
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 repay-
ment 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
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might occur if the law permits the creditor to take the
action. If you have questions about your reaffirma-
tion 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 reaffirma-
tion 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 state-
ment and a completed and signed reaffirmation
agreement.
‘‘ ‘3. If you were represented by an attorney dur-
ing the negotiation of the reaffirmation agreement,
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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 agreement,
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 separate
reaffirmation agreement (other than the one in Part
B) has been signed, it must be attached.
‘‘ ‘6. If you were represented by an attorney dur-
ing the negotiation of the reaffirmation agreement,
your reaffirmation agreement becomes effective upon
filing with the court unless the reaffirmation is pre-
sumed to be an undue hardship as explained in Part
D.
‘‘ ‘7. If you were not represented by an attorney
during the negotiation of the reaffirmation agreement,
it will not be effective unless the court approves it.
The court will notify you of the hearing on your reaf-
firmation agreement. You must attend this hearing in
bankruptcy court where the judge will review your
agreement. The bankruptcy court must approve the
agreement as consistent with your best interests, ex-
cept that no court approval is required if the agree-
ment is for a consumer debt secured by a mortgage,
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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 creditor
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 prop-
erty or your wages. Otherwise, your obligations will be de-
termined by the reaffirmation agreement which may have
changed the terms of the original agreement. For example,
if you are reaffirming an open end credit agreement, 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 agree-
ment by any law? No, you are not required to reaffirm a
debt by any law. Only agree to reaffirm a debt if it is in
your best interest. Be sure you can afford the payments you
agree to make.
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‘‘ ‘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 re-
deem the item rather than reaffirm the debt. To redeem,
you make a single payment to the creditor equal to the cur-
rent 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 dur-
ing the negotiation of the reaffirmation agreement,
your reaffirmation agreement becomes effective upon
filing with the court.’.
‘‘(4) The form of reaffirmation agreement required
under this paragraph shall consist of the following:
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‘‘ ‘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 consequences
of this agreement and any default under this agreement.
‘‘ ‘Signature of Debtor’s Attorney:
Date:’.
‘‘(B) In the case of reaffirmations in which a presump-
tion of undue hardship has been established, the certifi-
cation shall state that in the opinion of the attorney, the
debtor is able to make the payment.
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‘‘(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 received) is
$lll, and my actual current monthly expenses includ-
ing 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 payments, this reaffirma-
tion agreement is presumed to be an undue hardship on
me and must be reviewed by the court. However, this pre-
sumption 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 reaffirma-
tion agreement.’.
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‘‘(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 reaffirma-
tion 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 Statement
in Part A and a completed and signed reaffirmation agree-
ment.’.
‘‘(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 completed
only where debtor is not represented by an attorney.). 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 State-
ment in Support of this reaffirmation agreement above, and
because (provide any additional relevant reasons the court
should consider):
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‘‘ ‘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.
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‘‘(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 agreement
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 agreement
required under subsection (k)(6)(A) is less than the sched-
uled payments on the reaffirmed debt. This presumption
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 re-
butted to the satisfaction of the court, the court may dis-
approve the agreement. No agreement shall be disapproved
without notice and hearing to the debtor and creditor and
such hearing shall be concluded before the entry of the debt-
or’s discharge.
‘‘(2) This subsection does not apply to reaffirmation
agreements where the creditor is a credit union, as defined
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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 fol-
lowing:
‘‘§ 158. Designation of United States attorneys and
agents of the Federal Bureau of Investiga-
tion to address abusive reaffirmations of
debt and materially fraudulent state-
ments 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—
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‘‘(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 Investigation.
‘‘(c) BANKRUPTCY
INVESTIGATIONS.—Each United
States attorney designated under this section shall, in addi-
tion 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 amended
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.’’.
SEC. 204. PRESERVATION OF CLAIMS AND DEFENSES UPON
SALE OF PREDATORY LOANS.
Section 363 of title 11, United States Code, is amended
by adding at the end the following:
‘‘(p) Notwithstanding subsection (f), if a person pur-
chases any interest in a consumer credit transaction that
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is subject to the Truth in Lending Act (15 U.S.C. 1601 et
seq.), or any interest in a consumer credit contract as de-
fined by the Federal Trade Commission Preservation of
Claims Trade Regulation, and that interest is purchased
through a sale under this section, then that person shall
remain subject to all claims and defenses that are related
to the consumer credit transaction or contract, to the same
extent as that person would be subject to such claims and
defenses of the consumer had the sale taken place other than
under title 11.
SEC. 205. GAO STUDY ON REAFFIRMATION PROCESS.
(a) STUDY.—The General Accounting Office (in this
section referred to as the ‘‘GAO’’) shall conduct a study of
the reaffirmation process under title 11, United States
Code, to determine the overall treatment of consumers with-
in the context of that process, including consideration of—
(1) the policies and activities of creditors with
respect to reaffirmation; and
(2) whether consumers are fully, fairly and con-
sistently informed of their rights pursuant to this
title.
(b) REPORT TO CONGRESS.—Not later than 11⁄2 years
after the date of enactment of this Act, the GAO shall submit
a report to the Congress on the results of the study con-
ducted under subsection (a), together with any rec-
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ommendations for legislation to address any abusive or co-
ercive tactics found within the reaffirmation process.
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 ac-
crues on that debt as provided under applicable non-
bankruptcy 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 par-
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ent, without regard to whether such debt is ex-
pressly so designated;
‘‘(C) established or subject to establishment
before or after entry of an order for relief under
this title, by reason of applicable provisions 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 en-
tity, unless that obligation is assigned volun-
tarily by the spouse, former spouse, child, or par-
ent, 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’’;
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(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 redesig-
nated, the following:
‘‘(1) First:
‘‘(A) Allowed unsecured claims for domestic
support obligations that, as of the date of the fil-
ing of the petition, are owed to or recoverable by
a spouse, former spouse, or child of the debtor, or
the parent, legal guardian, or responsible relative
of such child, without regard to whether the
claim is filed by such person or is filed by a gov-
ernmental unit on behalf of that person, on the
condition that funds received under this para-
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graph by a governmental unit under this title
after the date of filing of the petition shall be ap-
plied and distributed in accordance with appli-
cable nonbankruptcy law.
‘‘(B) Subject to claims under subparagraph
(A), allowed unsecured claims for domestic sup-
port 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 gov-
ernmental unit (unless such obligation is as-
signed voluntarily by the spouse, former spouse,
child, parent, legal guardian, or responsible rel-
ative of the child for the purpose of collecting the
debt) or are owed directly to or recoverable by a
government unit under applicable nonbank-
ruptcy law, on the condition that funds received
under this paragraph by a governmental unit
under this title after the date of filing of the peti-
tion 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—
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(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 period
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 period
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-
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ment of all amounts owed for a claim entitled to pri-
ority under section 507(a)(1)(B) only if the plan pro-
vides that all of the debtor’s projected disposable in-
come for a 5-year period, beginning on the date that
the first payment is due under the plan, will be ap-
plied 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 unse-
cured claims that are nondischargeable under section
1328(a), except that such interest may be paid only
to the extent that the debtor has disposable income
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 period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
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‘‘(7) if 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 for such obligation that first be-
come payable after the date on which the petition 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 administrative
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 before the pe-
tition 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.’’;
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(8) in section 1322(a)—
(A) in paragraph (2), by striking ‘‘and’’ at
the end;
(B) in paragraph (3), by striking the period
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 pro-
vides that all of the debtor’s projected disposable in-
come for a 5-year period beginning on the date that
the first payment is due under the plan will be ap-
plied 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 unse-
cured claims that are nondischargeable under section
1328(a), except that such interest may be paid only
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to the extent that the debtor has disposable income
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 administrative
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 before the pe-
tition 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’’.
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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 modifica-
tion of an order for domestic support obli-
gations;
‘‘(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 ob-
ligation 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 ob-
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ligation under a judicial or administrative
order;
‘‘(D) the withholding, suspension, or restric-
tion of drivers’ licenses, professional and occupa-
tional 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 Se-
curity 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 So-
cial Security Act (42 U.S.C. 664 and 666(a)(3))
or under an analogous State law; or
‘‘(G) the enforcement of medical obligations
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 inserting
the following:
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‘‘(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-
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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 obligation
that first becomes payable after the date on which the peti-
tion 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 obligation
that first becomes payable after the date on which the peti-
tion is filed’’ after ‘‘dependent of the debtor’’.
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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 period
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 re-
sides for assistance in collecting child support during
and after the bankruptcy procedures;
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‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child support
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 dis-
charge 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—
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‘‘(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 paragraph
(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.—Sec-
tion 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 period
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
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(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 re-
sides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child support
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 dis-
charge 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;
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‘‘(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 paragraph
(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.—Sec-
tion 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 period
and inserting ‘‘; and’’; and
(C) by adding at the end the following:
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‘‘(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 re-
sides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child support
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), and the holder of the claim, 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 dis-
charge under section 1228, notify the holder of the
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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 paragraph
(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.—Sec-
tion 1302 of title 11, United States Code, is amended—
(1) in subsection (b)—
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(A) in paragraph (4), by striking ‘‘and’’ at
the end;
(B) in paragraph (5), by striking the period
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 re-
sides; and
‘‘(ii) include in the notice under this paragraph
the address and telephone number of the child support
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;
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‘‘(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 dis-
charge 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 paragraph
(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-
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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 debtor;’’.
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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 ‘‘an attorney
or an employee of an attorney’’ and inserting ‘‘the at-
torney for the debtor or an employee of such attorney
under the direct supervision of such attorney’’;
(2) in subsection (b)—
(A) in paragraph (1), by adding at the end
the following: ‘‘If a bankruptcy petition preparer
is not an individual, then an officer, principal,
responsible person, or partner of the preparer
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 inserting
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 debt-
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ors concerning bankruptcy petition preparers, which shall
be on an official form issued by the Judicial Conference
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 preparer,
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 following:
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‘‘(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 pre-
parer.’’; 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 eliminated
or discharged in a case under this title;
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‘‘(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 reaffirma-
tion 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)—
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(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 promul-
gated or prescribed under paragraph (1),
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the declaration under this paragraph shall
include a certification that the bankruptcy
petition preparer complied with the notifi-
cation 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 excess 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 para-
graph (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
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(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 initia-
tive 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 fraudu-
lent, unfair, or deceptive, on motion of the debtor, trustee,
United States trustee, or bankruptcy administrator, and
after the court holds a hearing with respect to that violation
or act, the court shall order the bankruptcy petition pre-
parer 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
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(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 fol-
lowing:
‘‘(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 mo-
tion 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;
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‘‘(B) advised the debtor to use a false Social Se-
curity 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 preparer.
‘‘(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 peti-
tion 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 subparagraph shall be
available to fund the enforcement of this section on a na-
tional 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 operation
and maintenance of the courts of the United States.’’.
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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 unlawful be-
cause the debtor was intoxicated from using alcohol,
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:
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‘‘(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) specifi-
cally 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 subsection
(d)(12), the following shall apply:
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‘‘(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 pre-
sumed 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 sub-
stantial compliance with the applicable require-
ments of the Internal Revenue Code of 1986 and
the debtor is not materially responsible 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
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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 exemption
under paragraph (3)(C) or subsection (d)(12) by rea-
son 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 qual-
ify for exemption under paragraph (3)(C) or sub-
section (d)(12) by reason of that distribution.
‘‘(ii) A distribution described in this clause is an
amount that—
‘‘(I) has been distributed from a fund or ac-
count that is exempt from taxation under section
401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986; and
‘‘(II) to the extent allowed by law, is depos-
ited in such a fund or account not later than 60
days after the distribution of that amount.’’; and
(2) in subsection (d)—
(A) in the matter preceding paragraph (1),
by striking ‘‘subsection (b)(1)’’ and inserting
‘‘subsection (b)(2)’’; and
(B) by adding at the end the following:
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‘‘(12) 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 In-
ternal Revenue Code of 1986.’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, is amended—
(1) in paragraph (17), by striking ‘‘or’’ at the
end;
(2) in paragraph (18), by striking the period
and inserting a semicolon;
(3) by inserting after paragraph (18) the fol-
lowing:
‘‘(19) under subsection (a), of withholding of in-
come from a debtor’s wages and collection of amounts
withheld, under the debtor’s agreement authorizing
that withholding and collection for the benefit of a
pension, profit-sharing, stock bonus, or other plan es-
tablished under section 401, 403, 408, 408A, 414, 457,
or 501(a) of the Internal Revenue Code of 1986, that
is sponsored by the employer of the debtor, or an affil-
iate, successor, or predecessor of such employer—
‘‘(A) to the extent that the amounts withheld
and collected are used solely for payments relat-
ing to a loan from a plan that satisfies the re-
quirements of section 408(b)(1) of the Employee
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Retirement Income Security Act of 1974 or is
subject to section 72(p) of the Internal Revenue
Code of 1986; or
‘‘(B) in the case of a loan from a thrift sav-
ings plan described in subchapter III of chapter
84 of title 5, that satisfies the requirements of
section 8433(g) of such title;’’; and
(4) by adding at the end of the flush material at
the end of the subsection, the following: ‘‘Nothing in
paragraph (19) may be construed to provide that any
loan made under a governmental plan under section
414(d), or a contract or account under section 403(b)
of the Internal Revenue Code of 1986 constitutes a
claim or a debt under this title.’’.
(c) EXCEPTIONS TO DISCHARGE.—Section 523(a) of
title 11, United States Code, as amended by this Act, is
amended by adding at the end the following:
‘‘(18) owed to a pension, profit-sharing, stock
bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(c) of the Internal
Revenue Code of 1986, under—
‘‘(A) a loan permitted under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974, or subject to section 72(p)
of the Internal Revenue Code of 1986; or
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‘‘(B) a loan from the thrift savings plan de-
scribed in subchapter III of chapter 84 of title 5,
that satisfies the requirements of section 8433(g)
of such title.
Nothing in paragraph (18) may be construed to pro-
vide that any loan made under a governmental plan
under section 414(d), or a contract or account under
section 403(b), of the Internal Revenue Code of 1986
constitutes a claim or a debt under this title.’’.
(d) PLAN CONTENTS.—Section 1322 of title 11, United
States Code, is amended by adding at the end the following:
‘‘(f) A plan may not materially alter the terms of a
loan described in section 362(b)(19) and any amounts re-
quired to repay such loan shall not constitute ‘disposable
income’ under section 1325.’’.
(e) ASSET LIMITATION.—Section 522 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(n) For assets in individual retirement accounts de-
scribed in section 408 or 408A of the Internal Revenue Code
of 1986, other than a simplified employee pension under
section 408(k) of that Code or a simple retirement account
under section 408(p) of that Code, the aggregate value of
such assets exempted under this section, without regard to
amounts attributable to rollover contributions under section
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402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the
Internal Revenue Code of 1986, and earnings thereon, shall
not exceed $1,000,000 (which amount shall be adjusted as
provided in section 104 of this title) in a case filed by an
individual debtor, except that such amount may be in-
creased if the interests of justice so require.’’.
SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANK-
RUPTCY.
(a) EXCLUSIONS.—Section 541 of title 11, United
States Code, is amended—
(1) in subsection (b)—
(A) in paragraph (4), by striking ‘‘or’’ at
the end;
(B) by redesignating paragraph (5) as
paragraph (10); and
(C) by inserting after paragraph (4) the fol-
lowing:
‘‘(5) funds placed in an education individual re-
tirement account (as defined in section 530(b)(1) of
the Internal Revenue Code of 1986) not later than
365 days before the date of filing of the petition,
but—
‘‘(A) only if the designated beneficiary of
such account was a son, daughter, stepson, step-
daughter, grandchild, or step-grandchild of the
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debtor for the taxable year for which funds were
placed in such account;
‘‘(B) only to the extent that such funds—
‘‘(i) are not pledged or promised to
any entity in connection with any extension
of credit; and
‘‘(ii) are not excess contributions (as
described in section 4973(e) of the Internal
Revenue Code of 1986); and
‘‘(C) in the case of funds placed in all such
accounts having the same designated 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;
‘‘(6) funds used to purchase a tuition credit or
certificate or contributed to an account in accordance
with section 529(b)(1)(A) of the Internal Revenue
Code of 1986 under a qualified State tuition program
(as defined in section 529(b)(1) of such Code) not
later than 365 days before the date of filing of the pe-
tition, but—
‘‘(A) only if the designated beneficiary of
the amounts paid or contributed to such tuition
program was a son, daughter, stepson, step-
daughter, grandchild, or step-grandchild of the
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debtor for the taxable year for which funds were
paid or contributed;
‘‘(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 Consumer
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 designated
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
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for legal adoption by such individual), or a foster child of
an individual (if such child has as the child’s principal
place of abode the home of the debtor and is a member of
the debtor’s household) shall be treated as a child of such
individual by blood.’’.
(b) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by this Act, is amended
by adding at the end the following:
‘‘(c) In addition to meeting the requirements under
subsection (a), a debtor shall file with the court a record
of any interest that a debtor has in an education individual
retirement account (as defined in section 530(b)(1) of the
Internal Revenue Code of 1986) or under a qualified State
tuition program (as defined in section 529(b)(1) of such
Code).’’.
SEC. 226. DEFINITIONS.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (2) the fol-
lowing:
‘‘(3) ‘assisted person’ means any person whose
debts consist primarily of consumer debts and whose
non-exempt assets are less than $150,000;’’;
(2) by inserting after paragraph (4) the fol-
lowing:
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‘‘(4A) ‘bankruptcy assistance’ means any goods
or services sold or otherwise provided to an assisted
person with the express or implied purpose of pro-
viding information, advice, counsel, document prepa-
ration, or filing, or attendance at a creditors’ meeting
or appearing in a proceeding on behalf of another or
providing legal representation with respect to a case
or proceeding under this title;’’; and
(3) by inserting after paragraph (12) the fol-
lowing:
‘‘(12A) ‘debt relief agency’ means any person
who provides any bankruptcy assistance to an as-
sisted person in return for the payment of money or
other valuable consideration, or who is a bankruptcy
petition preparer under section 110, but does not
include—
‘‘(A) any person that is an officer, director,
employee or agent of that person;
‘‘(B) a nonprofit organization which is ex-
empt from taxation under section 501(c)(3) of
the Internal Revenue Code of 1986;
‘‘(C) a creditor of the person, to the extent
that the creditor is assisting the person to re-
structure any debt owed by the person to the
creditor;
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‘‘(D) a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act)
or any Federal credit union or State credit
union (as those terms are defined in section 101
of the Federal Credit Union Act), or any affiliate
or subsidiary of such a depository institution or
credit union; or
‘‘(E) an author, publisher, distributor, or
seller of works subject to copyright protection
under title 17, when acting in such capacity.’’.
(b) CONFORMING AMENDMENT.—Section 104(b)(1) of
title 11, United States Code, is amended by inserting
‘‘101(3),’’ after ‘‘sections’’.
SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.
(a) ENFORCEMENT.—Subchapter II of chapter 5 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘§ 526. Restrictions on debt relief agencies
‘‘(a) A debt relief agency shall not—
‘‘(1) fail to perform any service that such agency
informed an assisted person or prospective assisted
person it would provide in connection with a case or
proceeding under this title;
‘‘(2) make any statement, or counsel or advise
any assisted person or prospective assisted person to
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make a statement in a document filed in a case or
proceeding under this title, that is untrue and mis-
leading, or that upon the exercise of reasonable care,
should have been known by such agency to be untrue
or misleading;
‘‘(3) misrepresent to any assisted person or pro-
spective assisted person, directly or indirectly, affirm-
atively or by material omission, with respect to—
‘‘(i) the services that such agency will pro-
vide to such person; or
‘‘(ii) the benefits and risks that may result
if such person becomes a debtor in a case under
this title; or
‘‘(4) advise an assisted person or prospective as-
sisted person to incur more debt in contemplation of
such person filing a case under this title or to pay
an attorney or bankruptcy petition preparer fee or
charge for services performed as part of preparing for
or representing a debtor in a case under this title.
‘‘(b) Any waiver by any assisted person of any protec-
tion or right provided under this section shall not be en-
forceable against the debtor by any Federal or State court
or any other person, but may be enforced against a debt
relief agency.
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‘‘(c)(1) Any contract for bankruptcy assistance between
a debt relief agency and an assisted person that does not
comply with the material requirements of this section, sec-
tion 527, or section 528 shall be void and may not be en-
forced by any Federal or State court or by any other person,
other than such assisted person.
‘‘(2) Any debt relief agency shall be liable to an as-
sisted person in the amount of any fees or charges in con-
nection with providing bankruptcy assistance to such per-
son that such debt relief agency has received, for actual
damages, and for reasonable attorneys’ fees and costs if such
agency is found, after notice and hearing, to have—
‘‘(A) intentionally or negligently failed to com-
ply with any provision of this section, section 527, or
section 528 with respect to a case or proceeding under
this title for such assisted person;
‘‘(B) provided bankruptcy assistance to an as-
sisted person in a case or proceeding under this title
that is dismissed or converted to a case under another
chapter of this title because of such agency’s inten-
tional or negligent failure to file any required docu-
ment including those specified in section 521; or
‘‘(C) intentionally or negligently disregarded the
material requirements of this title or the Federal
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Rules of Bankruptcy Procedure applicable to such
agency.
‘‘(3) In addition to such other remedies as are provided
under State law, whenever the chief law enforcement officer
of a State, or an official or agency designated by a State,
has reason to believe that any person has violated or is vio-
lating this section, the State—
‘‘(A) may bring an action to enjoin such viola-
tion;
‘‘(B) may bring an action on behalf of its resi-
dents to recover the actual damages of assisted persons
arising from such violation, including any liability
under paragraph (2); and
‘‘(C) in the case of any successful action under
subparagraph (A) or (B), shall be awarded the costs
of the action and reasonable attorney fees as deter-
mined by the court.
‘‘(4) The United States District Court for any district
located in the State shall have concurrent jurisdiction of
any action under subparagraph (A) or (B) of paragraph
(3).
‘‘(5) Notwithstanding any other provision of Federal
law and in addition to any other remedy provided under
Federal or State law, if the court, on its own motion or
on motion of the United States trustee or the debtor, finds
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that a person intentionally violated this section, or engaged
in a clear and consistent pattern or practice of violating
this section, the court may—
‘‘(A) enjoin the violation of such section; or
‘‘(B) impose an appropriate civil penalty
against such person.’’.
‘‘(d) No provision of this section, section 527, or sec-
tion 528 shall—
‘‘(1) annul, alter, affect, or exempt any person
subject to such sections from complying with any law
of any State except to the extent that such law is in-
consistent with those sections, and then only to the ex-
tent of the inconsistency; or
‘‘(2) be deemed to limit or curtail the authority
or ability—
‘‘(A) of a State or subdivision or instru-
mentality thereof, to determine and enforce
qualifications for the practice of law under the
laws of that State; or
‘‘(B) of a Federal court to determine and
enforce the qualifications for the practice of law
before that court.’’.
(b) CONFORMING AMENDMENT.—The table of sections
for chapter 5 of title 11, United States Code, is amended
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by inserting before the item relating to section 527, the fol-
lowing:
‘‘526. Debt relief enforcement.’’.
SEC. 228. DISCLOSURES.
(a) DISCLOSURES.—Subchapter II of chapter 5 of title
11, United States Code, as amended by this Act, is amended
by adding at the end the following:
‘‘§ 527. Disclosures
‘‘(a) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide—
‘‘(1) the written notice required under section
342(b)(1) of this title; and
‘‘(2) to the extent not covered in the written no-
tice described in paragraph (1), and not later than 3
business days after the first date on which a debt re-
lief agency first offers to provide any bankruptcy as-
sistance services to an assisted person, a clear and
conspicuous written notice advising assisted persons
that—
‘‘(A) all information that the assisted per-
son is required to provide with a petition and
thereafter during a case under this title is re-
quired to be complete, accurate, and truthful;
‘‘(B) all assets and all liabilities are re-
quired to be completely and accurately disclosed
in the documents filed to commence the case, and
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the replacement value of each asset as defined in
section 506 of this title must be stated in those
documents where requested after reasonable in-
quiry to establish such value;
‘‘(C) current monthly income, the amounts
specified in section 707(b)(2), and, in a case
under chapter 13, disposable income (determined
in accordance with section 707(b)(2)), are re-
quired to be stated after reasonable inquiry; and
‘‘(D) information that an assisted person
provides during their case may be audited pur-
suant to this title, and that failure to provide
such information may result in dismissal of the
proceeding under this title or other sanction in-
cluding, in some instances, criminal sanctions.
‘‘(b) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide each assisted person
at the same time as the notices required under subsection
(a)(1) with the following statement, to the extent applicable,
or one substantially similar. The statement shall be clear
and conspicuous and shall be in a single document separate
from other documents or notices provided to the assisted
person:
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‘‘ ‘IMPORTANT INFORMATION ABOUT BANK-
RUPTCY ASSISTANCE SERVICES FROM AN ATTOR-
NEY OR BANKRUPTCY PETITION PREPARER.
‘‘ ‘If you decide to seek bankruptcy relief, you can rep-
resent yourself, you can hire an attorney to represent you,
or you can get help in some localities from a bankruptcy
petition preparer who is not an attorney. THE LAW RE-
QUIRES AN ATTORNEY OR BANKRUPTCY PETI-
TION PREPARER TO GIVE YOU A WRITTEN CON-
TRACT SPECIFYING WHAT THE ATTORNEY OR
BANKRUPTCY PETITION PREPARER WILL DO FOR
YOU AND HOW MUCH IT WILL COST. Ask to see the
contract before you hire anyone.
‘‘ ‘The following information helps you understand
what must be done in a routine bankruptcy case to help
you evaluate how much service you need. Although bank-
ruptcy can be complex, many cases are routine.
‘‘ ‘Before filing a bankruptcy case, either you or your
attorney should analyze your eligibility for different forms
of debt relief made available by the Bankruptcy Code and
which form of relief is most likely to be beneficial for you.
Be sure you understand the relief you can obtain and its
limitations. To file a bankruptcy case, documents called a
Petition, Schedules and Statement of Financial Affairs, as
well as in some cases a Statement of Intention need to be
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prepared correctly and filed with the bankruptcy court. You
will have to pay a filing fee to the bankruptcy court. Once
your case starts, you will have to attend the required first
meeting of creditors where you may be questioned by a court
official called a ‘‘trustee’’ and by creditors.
‘‘ ‘If you choose to file a chapter 7 case, you may be
asked by a creditor to reaffirm a debt. You may want help
deciding whether to do so and a creditor is not permitted
to coerce you into reaffirming your debts.
‘‘ ‘If you choose to file a chapter 13 case in which you
repay your creditors what you can afford over 3 to 5 years,
you may also want help with preparing your chapter 13
plan and with the confirmation hearing on your plan which
will be before a bankruptcy judge.
‘‘ ‘If you select another type of relief under the Bank-
ruptcy Code other than chapter 7 or chapter 13, you will
want to find out what needs to be done from someone famil-
iar with that type of relief.
‘‘ ‘Your bankruptcy case may also involve litigation.
You are generally permitted to represent yourself in litiga-
tion in bankruptcy court, but only attorneys, not bank-
ruptcy petition preparers, can give you legal advice.’.
‘‘(c) Except to the extent the debt relief agency provides
the required information itself after reasonably diligent in-
quiry of the assisted person or others so as to obtain such
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information reasonably accurately for inclusion on the peti-
tion, schedules or statement of financial affairs, a debt relief
agency providing bankruptcy assistance to an assisted per-
son, to the extent permitted by nonbankruptcy law, shall
provide each assisted person at the time required for the
notice required under subsection (a)(1) reasonably sufficient
information (which shall be provided in a clear and con-
spicuous writing) to the assisted person on how to provide
all the information the assisted person is required to pro-
vide under this title pursuant to section 521, including—
‘‘(1) how to value assets at replacement value,
determine current monthly income, the amounts spec-
ified in section 707(b)(2) and, in a chapter 13 case,
how to determine disposable income in accordance
with section 707(b)(2) and related calculations;
‘‘(2) how to complete the list of creditors, includ-
ing how to determine what amount is owed and what
address for the creditor should be shown; and
‘‘(3) how to determine what property is exempt
and how to value exempt property at replacement
value as defined in section 506 of this title.
‘‘(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for 2
years after the date on which the notice is given the assisted
person.’’.
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(b) CONFORMING AMENDMENT.—The table of sections
for chapter 5 of title 11, United States Code, as amended
by this Act, is amended by inserting after the item relating
to section 526 the following:
‘‘527. Disclosures.’’.
SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.
(a) ENFORCEMENT.—Subchapter II of chapter 5 of
title 11, United States Code, as amended by this Act, is
amended by adding at the end the following:
‘‘§ 528. Requirements for debt relief agencies
‘‘(a) A debt relief agency shall—
‘‘(1) not later than 5 business days after the first
date such agency provides any bankruptcy assistance
services to an assisted person, but prior to such as-
sisted person’s petition under this title being filed,
execute a written contract with such assisted person
that explains clearly and conspicuously—
‘‘(A) the services such agency will provide to
such assisted person; and
‘‘(B) the fees or charges for such services,
and the terms of payment;
‘‘(2) provide the assisted person with a copy of
the fully executed and completed contract;
‘‘(3) clearly and conspicuously disclose in any
advertisement of bankruptcy assistance services or of
the benefits of bankruptcy directed to the general pub-
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lic (whether in general media, seminars or specific
mailings, telephonic or electronic messages, or other-
wise) that the services or benefits are with respect to
bankruptcy relief under this title; and
‘‘(4) clearly and conspicuously using the fol-
lowing statement: ‘We are a debt relief agency. We
help people file for bankruptcy relief under the Bank-
ruptcy Code.’ or a substantially similar statement.
‘‘(b)(1) An advertisement of bankruptcy assistance
services or of the benefits of bankruptcy directed to the gen-
eral public includes—
‘‘(A) descriptions of bankruptcy assistance in
connection with a chapter 13 plan whether or not
chapter 13 is specifically mentioned in such advertise-
ment; and
‘‘(B) statements such as ‘federally supervised re-
payment plan’ or ‘Federal debt restructuring help’ or
other similar statements that could lead a reasonable
consumer to believe that debt counseling was being of-
fered when in fact the services were directed to pro-
viding bankruptcy assistance with a chapter 13 plan
or other form of bankruptcy relief under this title.
‘‘(2) An advertisement, directed to the general public,
indicating that the debt relief agency provides assistance
with respect to credit defaults, mortgage foreclosures, evic-
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tion proceedings, excessive debt, debt collection pressure, or
inability to pay any consumer debt shall—
‘‘(A) disclose clearly and conspicuously in such
advertisement that the assistance may involve bank-
ruptcy relief under this title; and
‘‘(B) include the following statement: ‘We are a
debt relief agency. We help people file for bankruptcy
relief under the Bankruptcy Code.’ or a substantially
similar statement.’’.
(b) CONFORMING AMENDMENT.—The table of sections
for chapter 5 of title 11, United States Code, as amended
by this Act, is amended by inserting after the item relating
to section 527, the following:
‘‘528. Debtor’s bill of rights.’’.
SEC. 230. GAO STUDY.
(a) STUDY.—Not later than 270 days after the date
of enactment of this Act, the Comptroller General of the
United States shall conduct a study of the feasibility, effec-
tiveness, and cost of requiring trustees appointed under title
11, United States Code, or the bankruptcy courts, to provide
to the Office of Child Support Enforcement promptly after
the commencement of cases by individual debtors under
such title, the names and social security numbers of such
debtors for the purposes of allowing such Office to determine
whether such debtors have outstanding obligations for child
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support (as determined on the basis of information in the
Federal Case Registry or other national database).
(b) REPORT.—Not later than 300 days after the date
of enactment of this Act, the Comptroller General shall sub-
mit to the President pro tempore of the Senate and the
Speaker of the House of Representatives a report containing
the results of the study required by subsection (a).
SEC. 231. PROTECTION OF NONPUBLIC PERSONAL INFOR-
MATION.
(a) IN GENERAL.—Section 363(b)(1) of title 11,
United States Code, is amended by striking the period at
the end and inserting the following:‘‘, except that if the debt-
or has disclosed a policy to an individual prohibiting the
transfer of personally identifiable information about the in-
dividual to unaffiliated third persons, and the policy re-
mains in effect at the time of the bankruptcy filing, the
trustee may not sell or lease such personally identifiable in-
formation to any person, unless—
‘‘(A) the sale is consistent with such prohi-
bition; or
‘‘(B) the court, after notice and hearing and
due consideration of the facts, circumstances,
and conditions of the sale or lease, approves the
sale or lease.’’.
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(b) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (41)
the following:
‘‘(41A) ‘personally identifiable information’, if
provided by the individual to the debtor in connection
with obtaining a product or service from the debtor
primarily 
for 
personal, 
family, 
or 
household
purposes—
‘‘(A) means—
‘‘(i) the individual’s first name (or ini-
tials) and last name, whether given at birth
or adoption or legally changed;
‘‘(ii) the physical address for the indi-
vidual’s home;
‘‘(iii) the individual’s e-mail address;
‘‘(iv) the individual’s home telephone
number;
‘‘(v) the individual’s social security
number; or
‘‘(vi) the individual’s credit card ac-
count number; and
‘‘(B) means, when identified in connection
with one or more of the items of information list-
ed in subparagraph (A)—
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‘‘(i) an individual’s birth date, birth
certificate number, or place of birth; or
‘‘(ii) any other information concerning
an identified individual that, if disclosed,
will result in the physical or electronic con-
tacting or identification of that person;’’.
SEC. 232. CONSUMER PRIVACY OMBUDSMAN.
(a) IN GENERAL.—
(1) APPOINTMENT ON REQUEST.—If the trustee
intends to sell or lease personally identifiable infor-
mation in a manner which requires a hearing de-
scribed in section 363(b)(1)(B), the trustee shall re-
quest, and the court shall appoint, an individual to
serve as ombudsman during the case not later than—
(A) on or before the expiration of 30 days
after the date of the order for relief; or
(B) 5 days prior to any hearing described
in section 363(b)(1)(B) of title 11, United States
Code, as amended by this Act.
(2) DUTIES
OF
OMBUDSMAN.—It shall be the
duty of the ombudsman to provide the court informa-
tion to assist the court in its consideration of the
facts, circumstances, and conditions of the sale or
lease under section 363(b)(1)(B) of title 11, United
States Code, as amended by this Act. Such informa-
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tion may include a presentation of the debtor’s pri-
vacy policy in effect, potential losses or gains of pri-
vacy to consumers if the sale or lease is approved, po-
tential costs or benefits to consumers if the sale or
lease is approved, and potential alternatives which
mitigate potential privacy losses or potential costs to
consumers.
(3) NOTICE TO OMBUDSMAN.—The ombudsman
shall receive notice of, and shall have a right to ap-
pear and be heard, at any hearing described in sec-
tion 363b(1)(B) of title 11, United States Code, as
amended by this Act.
(4) CONFIDENTIALITY.—The ombudsman shall
maintain any personally identifiable information ob-
tained by the ombudsman under this title as confiden-
tial information.
(b) APPOINTMENT.—If the court orders the appoint-
ment of an ombudsman under this section, the United
States Trustee shall appoint 1 disinterested person, other
than the United States trustee, to serve as the ombudsman.
(c) COMPENSATION OF CONSUMER PRIVACY OMBUDS-
MAN.—Section 330(a)(1) of title 11, United States Code, is
amended in the matter preceding subparagraph (A), by in-
serting ‘‘an ombudsman appointed under section 332,’’ be-
fore ‘‘an examiner’’.
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SEC. 233. PROHIBITION ON DISCLOSURE OF IDENTITY OF
MINOR CHILDREN.
(a) PROHIBITION.—Chapter 1 of title 11, United
States Code, is amended by adding after section 111, as
added by this Act, the following:
‘‘§ 112. Prohibition on disclosure of identity of minor
children
‘‘In a case under this title, the debtor may be required
to provide information regarding a minor child involved
in matters under this title, but may not be required to dis-
close in the public records in the case the name of such
minor child. Notwithstanding section 107(a), the debtor
may be required to disclose the name of such minor child
in a nonpublic record maintained by the court. Such non-
public record shall be available for inspection by the judge,
United States Trustee, the trustee, or an auditor under sec-
tion 603 of the Bankruptcy Reform Act of 2001. Each such
judge, United States Trustee, trustee, or auditor shall main-
tain the confidentiality of the identity of such minor child
in the nonpublic record.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
chapter 1 of title 11, United States Code, is amended by
adding at the end the following:
‘‘112. Prohibition on disclosure of identity of minor children.’’.
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TITLE III—DISCOURAGING
BANKRUPTCY ABUSE
SEC. 301. REINFORCEMENT OF THE FRESH START.
Section 523(a)(17) of title 11, United States Code, is
amended—
(1) by striking ‘‘by a court’’ and inserting ‘‘on
a prisoner by any court’’,
(2) by striking ‘‘section 1915(b) or (f)’’ and in-
serting ‘‘subsection (b) or (f)(2) of section 1915’’, and
(3) by inserting ‘‘(or a similar non-Federal
law)’’ after ‘‘title 28’’ each place it appears.
SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is
amended—
(1) in paragraph (1), by striking ‘‘and’’ at the
end;
(2) in paragraph (2), by striking the period at
the end and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(3) if a single or joint case is filed by or
against an individual debtor under chapter 7, 11, or
13, and if a single or joint case of the debtor was
pending within the preceding 1-year period but was
dismissed, other than a case refiled under a chapter
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other than chapter 7 after dismissal under section
707(b)—
‘‘(A) the stay under subsection (a) with re-
spect to any action taken with respect to a debt
or property securing such debt or with respect to
any lease shall terminate with respect to the
debtor on the 30th day after the filing of the
later case;
‘‘(B) upon motion by a party in interest for
continuation of the automatic stay and upon no-
tice and a hearing, the court may extend the
stay in particular cases as to any or all creditors
(subject to such conditions or limitations as the
court may then impose) after notice and a hear-
ing completed before the expiration of the 30-day
period only if the party in interest demonstrates
that the filing of the later case is in good faith
as to the creditors to be stayed; and
‘‘(C) for purposes of subparagraph (B), a
case is presumptively filed not in good faith (but
such presumption may be rebutted by clear and
convincing evidence to the contrary)—
‘‘(i) as to all creditors, if—
‘‘(I) more than 1 previous case
under any of chapter 7, 11, or 13 in
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which the individual was a debtor was
pending within the preceding 1-year
period;
‘‘(II) a previous case under any of
chapter 7, 11, or 13 in which the indi-
vidual was a debtor was dismissed
within such 1-year period, after the
debtor failed to—
‘‘(aa) file or amend the peti-
tion or other documents as re-
quired by this title or the court
without substantial excuse (but
mere inadvertence or negligence
shall not be a substantial excuse
unless the dismissal was caused
by the negligence of the debtor’s
attorney);
‘‘(bb) provide adequate pro-
tection as ordered by the court; or
‘‘(cc) perform the terms of a
plan confirmed by the court; or
‘‘(III) there has not been a sub-
stantial change in the financial or per-
sonal affairs of the debtor since the dis-
missal of the next most previous case
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under chapter 7, 11, or 13 or any other
reason to conclude that the later case
will be concluded—
‘‘(aa) if a case under chapter
7, with a discharge; or
‘‘(bb) if a case under chapter
11 or 13, with a confirmed plan
which will be fully performed; and
‘‘(ii) as to any creditor that com-
menced an action under subsection (d) in a
previous case in which the individual was
a debtor if, as of the date of dismissal of
such case, that action was still pending or
had been resolved by terminating, condi-
tioning, or limiting the stay as to actions of
such creditor; and
‘‘(4)(A)(i) if a single or joint case is filed by or
against an individual debtor under this title, and if
2 or more single or joint cases of the debtor were
pending within the previous year but were dismissed,
other than a case refiled under section 707(b), the
stay under subsection (a) shall not go into effect upon
the filing of the later case; and
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‘‘(ii) on request of a party in interest, the court
shall promptly enter an order confirming that no stay
is in effect;
‘‘(B) if, within 30 days after the filing of the
later case, a party in interest requests the court may
order the stay to take effect in the case as to any or
all creditors (subject to such conditions or limitations
as the court may impose), after notice and hearing,
only if the party in interest demonstrates that the fil-
ing of the later case is in good faith as to the creditors
to be stayed;
‘‘(C) a stay imposed under subparagraph (B)
shall be effective on the date of entry of the order al-
lowing the stay to go into effect; and
‘‘(D) for purposes of subparagraph (B), a case is
presumptively not filed in good faith (but such pre-
sumption may be rebutted by clear and convincing
evidence to the contrary)—
‘‘(i) as to all creditors if—
‘‘(I) 2 or more previous cases under
this title in which the individual was a
debtor were pending within the 1-year pe-
riod;
‘‘(II) a previous case under this title in
which the individual was a debtor was dis-
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missed within the time period stated in this
paragraph after the debtor failed to file or
amend the petition or other documents as
required by this title or the court without
substantial excuse (but mere inadvertence or
negligence shall not be substantial excuse
unless the dismissal was caused by the neg-
ligence of the debtor’s attorney), failed to
pay adequate protection as ordered by the
court, or failed to perform the terms of a
plan confirmed by the court; or
‘‘(III) there has not been a substantial
change in the financial or personal affairs
of the debtor since the dismissal of the next
most previous case under this title, or any
other reason to conclude that the later case
will not be concluded, if a case under chap-
ter 7, with a discharge, and if a case under
chapter 11 or 13, with a confirmed plan
that will be fully performed; or
‘‘(ii) as to any creditor that commenced an
action under subsection (d) in a previous case in
which the individual was a debtor if, as of the
date of dismissal of such case, such action was
still pending or had been resolved by termi-
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nating, conditioning, or limiting the stay as to
action of such creditor.’’.
SEC. 303. CURBING ABUSIVE FILINGS.
(a) IN GENERAL.—Section 362(d) of title 11, United
States Code, is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the
end;
(2) in paragraph (3), by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(4) with respect to a stay of an act against real
property under subsection (a), by a creditor whose
claim is secured by an interest in such real estate, if
the court finds that the filing of the bankruptcy peti-
tion was part of a scheme to delay, hinder, and de-
fraud creditors that involved either—
‘‘(A) transfer of all or part ownership of, or
other interest in, the real property without the
consent of the secured creditor or court approval;
or
‘‘(B) multiple bankruptcy filings affecting
the real property.
If recorded in compliance with applicable State laws gov-
erning notices of interests or liens in real property, an order
entered under this subsection shall be binding in any other
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case under this title purporting to affect the real property
filed not later than 2 years after the date of entry of such
order by the court, except that a debtor in a subsequent case
may move for relief from such order based upon changed
circumstances or for good cause shown, after notice and a
hearing. Any Federal, State, or local governmental unit
that accepts notices of interests or liens in real property
shall accept any certified copy of an order described in this
subsection for indexing and recording.’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, is amended by inserting after para-
graph (19), as added by this Act, the following:
‘‘(20) under subsection (a), of any act to enforce
any lien against or security interest in real property
following the entry of an order under section
362(d)(4) as to that property in any prior bank-
ruptcy case for a period of 2 years after entry of such
an order, except that the debtor, in a subsequent case,
may move the court for relief from such order based
upon changed circumstances or for other good cause
shown, after notice and a hearing;
‘‘(21) under subsection (a), of any act to enforce
any lien against or security interest in real
property—
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‘‘(A) if the debtor is ineligible under section
109(g) to be a debtor in a bankruptcy case; or
‘‘(B) if the bankruptcy case was filed in
violation of a bankruptcy court order in a prior
bankruptcy case prohibiting the debtor from
being a debtor in another bankruptcy case;’’.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY
SECURITY.
Title 11, United States Code, is amended—
(1) in section 521(a) (as so designated by this
Act)—
(A) in paragraph (4), by striking ‘‘, and’’
at the end and inserting a semicolon;
(B) in paragraph (5), by striking the period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) in an individual case under chapter 7 of
this title, not retain possession of personal property
as to which a creditor has an allowed claim for the
purchase price secured in whole or in part by an in-
terest in that personal property unless, in the case of
an individual debtor, the debtor, not later than 45
days after the first meeting of creditors under section
341(a), either—
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claim described in subclause (II) or
(III) under any such contract; or
‘‘(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other
credit enhancement referred to in clause (i)
(with respect to such person and any affil-
iate of such person).
‘‘(B) TRANSFER TO FOREIGN BANK, FOR-
EIGN
FINANCIAL
INSTITUTION, OR
BRANCH
OR
AGENCY OF A FOREIGN BANK OR FINANCIAL IN-
STITUTION.—In transferring any qualified fi-
nancial contracts and related claims and prop-
erty under subparagraph (A)(i), the conservator
or receiver for the depository institution shall
not make such transfer to a foreign bank, finan-
cial institution organized under the laws of a
foreign country, or a branch or agency of a for-
eign bank or financial institution unless, under
the law applicable to such bank, financial insti-
tution, branch or agency, to the qualified finan-
cial contracts, and to any netting contract, any
security agreement or arrangement or other cred-
it enhancement related to one or more qualified
financial contracts, the contractual rights of the
parties to such qualified financial contracts, net-