108TH CONGRESS
1ST SESSION
H. R. 975
AN ACT
To amend title 11 of the United States Code, and
for other purposes.
108TH CONGRESS
1ST SESSION
H. R. 975
AN ACT
To amend title 11 of the United States Code, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CON-
TENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Bankruptcy Abuse Prevention and Consumer Protection
Act of 2003’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; references; table of contents.
TITLE I—NEEDS-BASED BANKRUPTCY
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Sense of Congress and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
Sec. 107. Schedules of reasonable and necessary expenses.
TITLE II—ENHANCED CONSUMER PROTECTION
Subtitle A—Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation agreement practices.
Sec. 204. Preservation of claims and defenses upon sale of predatory loans.
Sec. 205. GAO study and report on reaffirmation agreement process.
Subtitle B—Priority Child Support
Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases involving
domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation pro-
ceedings.
Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential transfer
motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and loans.
Subtitle C—Other Consumer Protections
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings in bankruptcy.
Sec. 226. Definitions.
Sec. 227. Restrictions on debt relief agencies.
Sec. 228. Disclosures.
Sec. 229. Requirements for debt relief agencies.
Sec. 230. GAO study.
Sec. 231. Protection of personally identifiable information.
Sec. 232. Consumer privacy ombudsman.
Sec. 233. Prohibition on disclosure of name of minor children.
TITLE III—DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not complete in-
tended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 307. Domiciliary requirements for exemptions.
Sec. 308. Reduction of homestead exemption for fraud.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide required infor-
mation.
Sec. 317. Adequate time to prepare for hearing on confirmation of the plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of Congress regarding expansion of rule 9011 of the Federal
Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Limitations on homestead exemption.
Sec. 323. Excluding employee benefit plan participant contributions and other
property from the estate.
Sec. 324. Exclusive jurisdiction in matters involving bankruptcy professionals.
Sec. 325. United States trustee program filing fee increase.
Sec. 326. Sharing of compensation.
Sec. 327. Fair valuation of collateral.
Sec. 328. Defaults based on nonmonetary obligations.
Sec. 329. Clarification of postpetition wages and benefits.
Sec. 330. Delay of discharge during pendency of certain proceedings.
TITLE IV—GENERAL AND SMALL BUSINESS BANKRUPTCY
PROVISIONS
Subtitle A—General Business Bankruptcy Provisions
Sec. 401. Adequate protection for investors.
Sec. 402. Meetings of creditors and equity security holders.
Sec. 403. Protection of refinance of security interest.
Sec. 404. Executory contracts and unexpired leases.
Sec. 405. Creditors and equity security holders committees.
Sec. 406. Amendment to section 546 of title 11, United States Code.
Sec. 407. Amendments to section 330(a) of title 11, United States Code.
Sec. 408. Postpetition disclosure and solicitation.
Sec. 409. Preferences.
Sec. 410. Venue of certain proceedings.
Sec. 411. Period for filing plan under chapter 11.
Sec. 412. Fees arising from certain ownership interests.
Sec. 413. Creditor representation at first meeting of creditors.
Sec. 414. Definition of disinterested person.
Sec. 415. Factors for compensation of professional persons.
Sec. 416. Appointment of elected trustee.
Sec. 417. Utility service.
Sec. 418. Bankruptcy fees.
Sec. 419. More complete information regarding assets of the estate.
Subtitle B—Small Business Bankruptcy Provisions
Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment of
trustee.
Sec. 443. Study of operation of title 11, United States Code, with respect to
small businesses.
Sec. 444. Payment of interest.
Sec. 445. Priority for administrative expenses.
Sec. 446. Duties with respect to a debtor who is a plan administrator of an em-
ployee benefit plan.
Sec. 447. Appointment of committee of retired employees.
TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI—BANKRUPTCY DATA
Sec. 601. Improved bankruptcy statistics.
Sec. 602. Uniform rules for the collection of bankruptcy data.
Sec. 603. Audit procedures.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.
TITLE VII—BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate’s liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and local taxes.
Sec. 720. Dismissal for failure to timely file tax returns.
TITLE VIII—ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Other amendments to titles 11 and 28, United States Code.
TITLE IX—FINANCIAL CONTRACT PROVISIONS
Sec. 901. Treatment of certain agreements by conservators or receivers of in-
sured depository institutions.
Sec. 902. Authority of the FDIC and NCUAB with respect to failed and failing
institutions.
Sec. 903. Amendments relating to transfers of qualified financial contracts.
Sec. 904. Amendments relating to disaffirmance or repudiation of qualified fi-
nancial contracts.
Sec. 905. Clarifying amendment relating to master agreements.
Sec. 906. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 907. Bankruptcy law amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.
TITLE X—PROTECTION OF FAMILY FARMERS AND FAMILY
FISHERMEN
Sec. 1001. Permanent reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Certain claims owed to governmental units.
Sec. 1004. Definition of family farmer.
Sec. 1005. Elimination of requirement that family farmer and spouse receive
over 50 percent of income from farming operation in year prior
to bankruptcy.
Sec. 1006. Prohibition of retroactive assessment of disposable income.
Sec. 1007. Family fishermen.
TITLE XI—HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1101. Definitions.
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health care busi-
ness and other administrative expenses.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Exclusion from program participation not subject to automatic stay.
TITLE XII—TECHNICAL AMENDMENTS
Sec. 1201. Definitions.
Sec. 1202. Adjustment of dollar amounts.
Sec. 1203. Extension of time.
Sec. 1204. Technical amendments.
Sec. 1205. Penalty for persons who negligently or fraudulently prepare bank-
ruptcy petitions.
Sec. 1206. Limitation on compensation of professional persons.
Sec. 1207. Effect of conversion.
Sec. 1208. Allowance of administrative expenses.
Sec. 1209. Exceptions to discharge.
Sec. 1210. Effect of discharge.
Sec. 1211. Protection against discriminatory treatment.
Sec. 1212. Property of the estate.
Sec. 1213. Preferences.
Sec. 1214. Postpetition transactions.
Sec. 1215. Disposition of property of the estate.
Sec. 1216. General provisions.
Sec. 1217. Abandonment of railroad line.
Sec. 1218. Contents of plan.
Sec. 1219. Bankruptcy cases and proceedings.
Sec. 1220. Knowing disregard of bankruptcy law or rule.
Sec. 1221. Transfers made by nonprofit charitable corporations.
Sec. 1222. Protection of valid purchase money security interests.
Sec. 1223. Bankruptcy Judgeships.
Sec. 1224. Compensating trustees.
Sec. 1225. Amendment to section 362 of title 11, United States Code.
Sec. 1226. Judicial education.
Sec. 1227. Reclamation.
Sec. 1228. Providing requested tax documents to the court.
Sec. 1229. Encouraging creditworthiness.
Sec. 1230. Property no longer subject to redemption.
Sec. 1231. Trustees.
Sec. 1232. Bankruptcy forms.
Sec. 1233. Direct appeals of bankruptcy matters to courts of appeals.
Sec. 1234. Involuntary cases.
Sec. 1235. Federal election law fines and penalties as nondischargeable debt.
TITLE XIII—CONSUMER CREDIT DISCLOSURE
Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a dwelling.
Sec. 1303. Disclosures related to ‘‘introductory rates’’.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent stu-
dents.
Sec. 1309. Clarification of clear and conspicuous.
TITLE XIV—GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
Sec. 1401. Effective date; application of amendments.
TITLE XV—PREVENTING CORPORATE BANKRUPTCY ABUSE
Sec. 1501. Employee wage and benefit priorities.
Sec. 1502. Fraudulent transfers and obligations.
Sec. 1503. Payment of insurance benefits to retired employees.
Sec. 1504. Effective date; application of amendments.
TITLE I—NEEDS-BASED
BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is
amended by inserting ‘‘or consents to’’ after ‘‘requests’’.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL.—Section 707 of title 11, United
States Code, is amended—
(1) by striking the section heading and insert-
ing the following:
‘‘§ 707. Dismissal of a case or conversion to a case
under chapter 11 or 13’’;
and
(2) in subsection (b)—
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’;
(B) in paragraph (1), as so redesignated
by subparagraph (A) of this paragraph—
(i) in the first sentence—
‘‘(ii)(I) The debtor’s monthly expenses shall be the
debtor’s applicable monthly expense amounts specified
under the National Standards and Local Standards, and
the debtor’s actual monthly expenses for the categories
specified as Other Necessary Expenses issued by the In-
ternal Revenue Service for the area in which the debtor
resides, as in effect on the date of the order for relief,
for the debtor, the dependents of the debtor, and the
spouse of the debtor in a joint case, if the spouse is not
otherwise a dependent. Notwithstanding any other provi-
sion of this clause, the monthly expenses of the debtor
shall not include any payments for debts. In addition, the
debtor’s monthly expenses shall include the debtor’s rea-
sonably necessary expenses incurred to maintain the safe-
ty of the debtor and the family of the debtor from family
violence as identified under section 309 of the Family Vio-
lence Prevention and Services Act, or other applicable
Federal law. The expenses included in the debtor’s month-
ly expenses described in the preceding sentence shall be
kept confidential by the court. In addition, if it is dem-
onstrated that it is reasonable and necessary, the debtor’s
monthly expenses may also include an additional allowance
for food and clothing of up to 5 percent of the food and
clothing categories as specified by the National Standards
issued by the Internal Revenue Service.
‘‘(II) In addition, the debtor’s monthly expenses may
include, if applicable, the continuation of actual expenses
paid by the debtor that are reasonable and necessary for
care and support of an elderly, chronically ill, or disabled
household member or member of the debtor’s immediate
family (including parents, grandparents, siblings, children,
and grandchildren of the debtor, the dependents of the
debtor, and the spouse of the debtor in a joint case who
is not a dependent) and who is unable to pay for such
reasonable and necessary expenses.
‘‘(III) In addition, for a debtor eligible for chapter
13, the debtor’s monthly expenses may include the actual
administrative expenses of administering a chapter 13
plan for the district in which the debtor resides, up to an
amount of 10 percent of the projected plan payments, as
determined under schedules issued by the Executive Office
for United States Trustees.
‘‘(IV) In addition, the debtor’s monthly expenses may
include the actual expenses for each dependent child less
than 18 years of age, not to exceed $1,500 per year per
child, to attend a private or public elementary or sec-
ondary school if the debtor provides documentation of such
expenses and a detailed explanation of why such expenses
are reasonable and necessary, and why such expenses are
not already accounted for in the National Standards,
Local Standards, or Other Necessary Expenses referred
to in subclause (I).
‘‘(V) In addition, the debtor’s monthly expenses may
include an allowance for housing and utilities, in excess
of the allowance specified by the Local Standards for
housing and utilities issued by the Internal Revenue Serv-
ice, based on the actual expenses for home energy costs
if the debtor provides documentation of such actual ex-
penses and demonstrates that such actual expenses are
reasonable and necessary.
‘‘(iii) The debtor’s average monthly payments on ac-
count of secured debts shall be calculated as the sum of—
‘‘(I) the total of all amounts scheduled as con-
tractually due to secured creditors in each month of
the 60 months following the date of the petition; and
‘‘(II) any additional payments to secured credi-
tors necessary for the debtor, in filing a plan under
chapter 13 of this title, to maintain possession of the
debtor’s primary residence, motor vehicle, or other
property necessary for the support of the debtor and
the debtor’s dependents, that serves as collateral for
secured debts;
divided by 60.
‘‘(iv) The debtor’s expenses for payment of all pri-
ority claims (including priority child support and alimony
claims) shall be calculated as the total amount of debts
entitled to priority, divided by 60.
‘‘(B)(i) In any proceeding brought under this sub-
section, the presumption of abuse may only be rebutted
by demonstrating special circumstances that justify addi-
tional expenses or adjustments of current monthly income
for which there is no reasonable alternative.
‘‘(ii) In order to establish special circumstances, the
debtor shall be required to itemize each additional expense
or adjustment of income and to provide—
‘‘(I) documentation for such expense or adjust-
ment to income; and
‘‘(II) a detailed explanation of the special cir-
cumstances that make such expenses or adjustment
to income necessary and reasonable.
‘‘(iii) The debtor shall attest under oath to the accu-
racy of any information provided to demonstrate that ad-
ditional expenses or adjustments to income are required.
‘‘(iv) The presumption of abuse may only be rebutted
if the additional expenses or adjustments to income re-
ferred to in clause (i) cause the product of the debtor’s
current monthly income reduced by the amounts deter-
mined under clauses (ii), (iii), and (iv) of subparagraph
(A) when multiplied by 60 to be less than the lesser of—
‘‘(I) 25 percent of the debtor’s nonpriority un-
secured claims, or $6,000, whichever is greater; or
‘‘(II) $10,000.
‘‘(C) As part of the schedule of current income and
expenditures required under section 521, the debtor shall
include a statement of the debtor’s current monthly in-
come, and the calculations that determine whether a pre-
sumption arises under subparagraph (A)(i), that show how
each such amount is calculated.
‘‘(3) In considering under paragraph (1) whether the
granting of relief would be an abuse of the provisions of
this chapter in a case in which the presumption in sub-
paragraph (A)(i) of such paragraph does not arise or is
rebutted, the court shall consider—
‘‘(A) whether the debtor filed the petition in
bad faith; or
‘‘(B) the totality of the circumstances (includ-
ing whether the debtor seeks to reject a personal
services contract and the financial need for such re-
jection as sought by the debtor) of the debtor’s fi-
nancial situation demonstrates abuse.
‘‘(4)(A) The court, on its own initiative or on the mo-
tion of a party in interest, in accordance with the proce-
dures described in rule 9011 of the Federal Rules of
Bankruptcy Procedure, may order the attorney for the
debtor to reimburse the trustee for all reasonable costs
in prosecuting a motion filed under section 707(b), includ-
ing reasonable attorneys’ fees, if—
‘‘(i) a trustee files a motion for dismissal or
conversion under this subsection; and
‘‘(ii) the court—
‘‘(I) grants such motion; and
‘‘(II) finds that the action of the attorney
for the debtor in filing under this chapter vio-
lated rule 9011 of the Federal Rules of Bank-
ruptcy Procedure.
‘‘(B) If the court finds that the attorney for the debt-
or violated rule 9011 of the Federal Rules of Bankruptcy
Procedure, the court, on its own initiative or on the motion
of a party in interest, in accordance with such procedures,
may order—
‘‘(i) the assessment of an appropriate civil pen-
alty against the attorney for the debtor; and
‘‘(ii) the payment of such civil penalty to the
trustee, the United States trustee (or the bank-
ruptcy administrator, if any).
‘‘(C) The signature of an attorney on a petition,
pleading, or written motion shall constitute a certification
that the attorney has—
‘‘(i) performed a reasonable investigation into
the circumstances that gave rise to the petition,
pleading, or written motion; and
‘‘(ii) determined that the petition, pleading, or
written motion—
‘‘(I) is well grounded in fact; and
‘‘(II) is warranted by existing law or a
good faith argument for the extension, modi-
fication, or reversal of existing law and does not
constitute an abuse under paragraph (1).
‘‘(D) The signature of an attorney on the petition
shall constitute a certification that the attorney has no
knowledge after an inquiry that the information in the
schedules filed with such petition is incorrect.
‘‘(5)(A) Except as provided in subparagraph (B) and
subject to paragraph (6), the court, on its own initiative
or on the motion of a party in interest, in accordance with
the procedures described in rule 9011 of the Federal Rules
of Bankruptcy Procedure, may award a debtor all reason-
able costs (including reasonable attorneys’ fees) in con-
testing a motion filed by a party in interest (other than
a trustee or United States trustee (or bankruptcy adminis-
trator, if any)) under this subsection if—
‘‘(i) the court does not grant the motion; and
‘‘(ii) the court finds that—
‘‘(I) the position of the party that filed the
motion violated rule 9011 of the Federal Rules
of Bankruptcy Procedure; or
‘‘(II) the attorney (if any) who filed the
motion did not comply with the requirements of
clauses (i) and (ii) of paragraph (4)(C), and the
motion was made solely for the purpose of co-
ercing a debtor into waiving a right guaranteed
to the debtor under this title.
‘‘(B) A small business that has a claim of an aggre-
gate amount less than $1,000 shall not be subject to sub-
paragraph (A)(ii)(I).
‘‘(C) For purposes of this paragraph—
‘‘(i) the term ‘small business’ means an unin-
corporated business, partnership, corporation, asso-
ciation, or organization that—
‘‘(I) has fewer than 25 full-time employees
as determined on the date on which the motion
is filed; and
‘‘(II) is engaged in commercial or business
activity; and
‘‘(ii) the number of employees of a wholly
owned subsidiary of a corporation includes the em-
ployees of—
‘‘(I) a parent corporation; and
‘‘(II) any other subsidiary corporation of
the parent corporation.
‘‘(6) Only the judge or United States trustee (or
bankruptcy administrator, if any) may file a motion under
section 707(b), if the current monthly income of the debt-
or, or in a joint case, the debtor and the debtor’s spouse,
as of the date of the order for relief, when multiplied by
12, is equal to or less than—
‘‘(A) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner;
‘‘(B) in the case of a debtor in a household of
2, 3, or 4 individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals; or
‘‘(C) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or
fewer individuals, plus $525 per month for each in-
dividual in excess of 4.
‘‘(7)(A) No judge, United States trustee (or bank-
ruptcy administrator, if any), trustee, or other party in
interest may file a motion under paragraph (2) if the cur-
rent monthly income of the debtor and the debtor’s spouse
combined, as of the date of the order for relief when multi-
plied by 12, is equal to or less than—
‘‘(i) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner;
‘‘(ii) in the case of a debtor in a household of
2, 3, or 4 individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals; or
‘‘(iii) in the case of a debtor in a household ex-
ceeding 4 individuals, the highest median family in-
come of the applicable State for a family of 4 or
fewer individuals, plus $525 per month for each in-
dividual in excess of 4.
‘‘(B) In a case that is not a joint case, current month-
ly income of the debtor’s spouse shall not be considered
for purposes of subparagraph (A) if—
‘‘(i)(I) the debtor and the debtor’s spouse are
separated under applicable nonbankruptcy law; or
‘‘(II) the debtor and the debtor’s spouse are liv-
ing separate and apart, other than for the purpose
of evading subparagraph (A); and
‘‘(ii) the debtor files a statement under penalty
of perjury—
‘‘(I) specifying that the debtor meets the
requirement of subclause (I) or (II) of clause
(i); and
‘‘(II) disclosing the aggregate, or best esti-
mate of the aggregate, amount of any cash or
money payments received from the debtor’s
spouse attributed to the debtor’s current
monthly income.’’.
(b) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (10)
the following:
‘‘(10A) ‘current monthly income’—
‘‘(A) means the average monthly income
from all sources that the debtor receives (or in
a joint case the debtor and the debtor’s spouse
receive) without regard to whether such income
is taxable income, derived during the 6-month
period ending on—
‘‘(i) the last day of the calendar
month immediately preceding the date of
the commencement of the case if the debt-
or files the schedule of current income re-
quired by section 521(a)(1)(B)(ii); or
‘‘(ii) the date on which current income
is determined by the court for purposes of
this title if the debtor does not file the
schedule of current income required by sec-
tion 521(a)(1)(B)(ii); and
‘‘(B) includes any amount paid by any en-
tity other than the debtor (or in a joint case the
debtor and the debtor’s spouse), on a regular
basis for the household expenses of the debtor
or the debtor’s dependents (and in a joint case
the debtor’s spouse if not otherwise a depend-
ent), but excludes benefits received under the
Social Security Act, payments to victims of war
crimes or crimes against humanity on account
of their status as victims of such crimes, and
payments to victims of international terrorism
(as defined in section 2331 of title 18) or do-
mestic terrorism (as defined in section 2331 of
title 18) on account of their status as victims
of such terrorism;’’.
(c) UNITED STATES TRUSTEE AND BANKRUPTCY
ADMINISTRATOR DUTIES.—Section 704 of title 11, United
States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The trustee
shall—’’; and
(2) by adding at the end the following:
‘‘(b)(1) With respect to a debtor who is an individual
in a case under this chapter—
‘‘(A) the United States trustee (or the bank-
ruptcy administrator, if any) shall review all mate-
rials filed by the debtor and, not later than 10 days
after the date of the first meeting of creditors, file
with the court a statement as to whether the debt-
or’s case would be presumed to be an abuse under
section 707(b); and
‘‘(B) not later than 5 days after receiving a
statement under subparagraph (A), the court shall
provide a copy of the statement to all creditors.
‘‘(2) The United States trustee (or bankruptcy ad-
ministrator, if any) shall, not later than 30 days after the
date of filing a statement under paragraph (1), either file
a motion to dismiss or convert under section 707(b) or
file a statement setting forth the reasons the United
States trustee (or the bankruptcy administrator, if any)
does not consider such a motion to be appropriate, if the
United States trustee (or the bankruptcy administrator,
if any) determines that the debtor’s case should be pre-
sumed to be an abuse under section 707(b) and the prod-
uct of the debtor’s current monthly income, multiplied by
12 is not less than—
‘‘(A) in the case of a debtor in a household of
1 person, the median family income of the applicable
State for 1 earner; or
‘‘(B) in the case of a debtor in a household of
2 or more individuals, the highest median family in-
come of the applicable State for a family of the same
number or fewer individuals.’’.
(d) NOTICE.—Section 342 of title 11, United States
Code, is amended by adding at the end the following:
‘‘(d) In a case under chapter 7 of this title in which
the debtor is an individual and in which the presumption
of abuse arises under section 707(b), the clerk shall give
written notice to all creditors not later than 10 days after
the date of the filing of the petition that the presumption
of abuse has arisen.’’.
(e) NONLIMITATION OF INFORMATION.—Nothing in
this title shall limit the ability of a creditor to provide in-
formation to a judge (except for information commu-
nicated ex parte, unless otherwise permitted by applicable
law), United States trustee (or bankruptcy administrator,
if any), or trustee.
(f) DISMISSAL FOR CERTAIN CRIMES.—Section 707
of title 11, United States Code, is amended by adding at
the end the following:
‘‘(c)(1) In this subsection—
‘‘(A) the term ‘crime of violence’ has the mean-
ing given such term in section 16 of title 18; and
‘‘(B) the term ‘drug trafficking crime’ has the
meaning given such term in section 924(c)(2) of title
18.
‘‘(2) Except as provided in paragraph (3), after no-
tice and a hearing, the court, on a motion by the victim
of a crime of violence or a drug trafficking crime, may
when it is in the best interest of the victim dismiss a vol-
untary case filed under this chapter by a debtor who is
an individual if such individual was convicted of such
crime.
‘‘(3) The court may not dismiss a case under para-
graph (2) if the debtor establishes by a preponderance of
the evidence that the filing of a case under this chapter
is necessary to satisfy a claim for a domestic support obli-
gation.’’.
(g) CONFIRMATION OF PLAN.—Section 1325(a) of
title 11, United States Code, is amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
(2) in paragraph (6), by striking the period and
inserting a semicolon; and
(3) by inserting after paragraph (6) the fol-
lowing:
‘‘(7) the action of the debtor in filing the peti-
tion was in good faith;’’.
(h) APPLICABILITY OF MEANS TEST TO CHAPTER
13.—Section 1325(b) of title 11, United States Code, is
amended—
(1) in paragraph (1)(B), by inserting ‘‘to unse-
cured creditors’’ after ‘‘to make payments’’; and
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) For purposes of this subsection, the term
‘disposable income’ means current monthly income
received by the debtor (other than child support pay-
ments, foster care payments, or disability payments
for a dependent child made in accordance with appli-
cable nonbankruptcy law to the extent reasonably
necessary to be expended for such child) less
amounts reasonably necessary to be expended—
‘‘(A)(i) for the maintenance or support of
the debtor or a dependent of the debtor, or for
a domestic support obligation, that first be-
comes payable after the date the petition is
filed; and
‘‘(ii) for charitable contributions (that
meet the definition of ‘charitable contribution’
under section 548(d)(3) to a qualified religious
or charitable entity or organization (as defined
in section 548(d)(4)) in an amount not to ex-
ceed 15 percent of gross income of the debtor
for the year in which the contributions are
made; and
‘‘(B) if the debtor is engaged in business,
for the payment of expenditures necessary for
the continuation, preservation, and operation of
such business.
‘‘(3) Amounts reasonably necessary to be ex-
pended under paragraph (2) shall be determined in
accordance with subparagraphs (A) and (B) of sec-
tion 707(b)(2), if the debtor has current monthly in-
come, when multiplied by 12, greater than—
‘‘(A) in the case of a debtor in a household
of 1 person, the median family income of the
applicable State for 1 earner;
‘‘(B) in the case of a debtor in a household
of 2, 3, or 4 individuals, the highest median
family income of the applicable State for a fam-
ily of the same number or fewer individuals; or
‘‘(C) in the case of a debtor in a household
exceeding 4 individuals, the highest median
family income of the applicable State for a fam-
ily of 4 or fewer individuals, plus $525 per
month for each individual in excess of 4.’’.
(i) SPECIAL
ALLOWANCE
FOR
HEALTH
INSUR-
ANCE.—Section 1329(a) of title 11, United States Code,
is amended—
(1) in paragraph (2) by striking ‘‘or’’ at the
end;
(2) in paragraph (3) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(4) reduce amounts to be paid under the plan
by the actual amount expended by the debtor to pur-
chase health insurance for the debtor (and for any
dependent of the debtor if such dependent does not
otherwise have health insurance coverage) if the
debtor documents the cost of such insurance and
demonstrates that—
‘‘(A) such expenses are reasonable and
necessary;
‘‘(B)(i) if the debtor previously paid for
health insurance, the amount is not materially
larger than the cost the debtor previously paid
or the cost necessary to maintain the lapsed
policy; or
‘‘(ii) if the debtor did not have health in-
surance, the amount is not materially larger
than the reasonable cost that would be incurred
by a debtor who purchases health insurance,
who has similar income, expenses, age, and
health status, and who lives in the same geo-
graphical location with the same number of de-
pendents who do not otherwise have health in-
surance coverage; and
‘‘(C) the amount is not otherwise allowed
for purposes of determining disposable income
under section 1325(b) of this title;
and upon request of any party in interest, files proof
that a health insurance policy was purchased.’’.
(j) ADJUSTMENT
OF DOLLAR AMOUNTS.—Section
104(b) of title 11, United States Code, is amended by
striking ‘‘and 523(a)(2)(C)’’ each place it appears and in-
serting ‘‘523(a)(2)(C), 707(b), and 1325(b)(3)’’.
(k) DEFINITION OF ‘MEDIAN FAMILY INCOME’.—
Section 101 of title 11, United States Code, is amended
by inserting after paragraph (39) the following:
‘‘(39A) ‘median family income’ means for any
year—
‘‘(A) the median family income both cal-
culated and reported by the Bureau of the Cen-
sus in the then most recent year; and
‘‘(B) if not so calculated and reported in
the then current year, adjusted annually after
such most recent year until the next year in
which median family income is both calculated
and reported by the Bureau of the Census, to
reflect the percentage change in the Consumer
Price Index for All Urban Consumers during
the period of years occurring after such most
recent year and before such current year;’’.
(k) CLERICAL AMENDMENT.—The table of sections
for chapter 7 of title 11, United States Code, is amended
by striking the item relating to section 707 and inserting
the following:
‘‘707. Dismissal of a case or conversion to a case under chapter 11 or 13.’’.
SEC. 103. SENSE OF CONGRESS AND STUDY.
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that the Secretary of the Treasury has the authority
to alter the Internal Revenue Service standards estab-
lished to set guidelines for repayment plans as needed to
accommodate their use under section 707(b) of title 11,
United States Code.
(b) STUDY.—
(1) IN GENERAL.—Not later than 2 years after
the date of enactment of this Act, the Director of
the Executive Office for United States Trustees shall
submit a report to the Committee on the Judiciary
of the Senate and the Committee on the Judiciary
of the House of Representatives containing the find-
ings of the Director regarding the utilization of In-
ternal Revenue Service standards for determining—
(A) the current monthly expenses of a
debtor under section 707(b) of title 11, United
States Code; and
(B) the impact that the application of such
standards has had on debtors and on the bank-
ruptcy courts.
(2) RECOMMENDATION.—The report under
paragraph (1) may include recommendations for
amendments to title 11, United States Code, that
are consistent with the findings of the Director
under paragraph (1).
SEC. 104. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is
amended to read as follows:
‘‘(b) Before the commencement of a case under this
title by an individual whose debts are primarily consumer
debts, the clerk shall give to such individual written notice
containing—
‘‘(1) a brief description of—
‘‘(A) chapters 7, 11, 12, and 13 and the
general purpose, benefits, and costs of pro-
ceeding under each of those chapters; and
‘‘(B) the types of services available from
credit counseling agencies; and
‘‘(2) statements specifying that—
‘‘(A) a person who knowingly and fraudu-
lently conceals assets or makes a false oath or
statement under penalty of perjury in connec-
tion with a case under this title shall be subject
to fine, imprisonment, or both; and
‘‘(B) all information supplied by a debtor
in connection with a case under this title is sub-
ject to examination by the Attorney General.’’.
SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING
TEST PROGRAM.
(a) DEVELOPMENT
OF FINANCIAL MANAGEMENT
AND TRAINING CURRICULUM AND MATERIALS.—The Di-
rector of the Executive Office for United States Trustees
(in this section referred to as the ‘‘Director’’) shall consult
with a wide range of individuals who are experts in the
field of debtor education, including trustees who serve in
cases under chapter 13 of title 11, United States Code,
and who operate financial management education pro-
grams for debtors, and shall develop a financial manage-
ment training curriculum and materials that can be used
to educate debtors who are individuals on how to better
manage their finances.
(b) TEST.—
(1) SELECTION OF DISTRICTS.—The Director
shall select 6 judicial districts of the United States
in which to test the effectiveness of the financial
management training curriculum and materials de-
veloped under subsection (a).
(2) USE.—For an 18-month period beginning
not later than 270 days after the date of the enact-
ment of this Act, such curriculum and materials
shall be, for the 6 judicial districts selected under
paragraph (1), used as the instructional course con-
cerning personal financial management for purposes
of section 111 of title 11, United States Code.
(c) EVALUATION.—
(1) IN GENERAL.—During the 18-month period
referred to in subsection (b), the Director shall
evaluate the effectiveness of—
(A) the financial management training cur-
riculum and materials developed under sub-
section (a); and
(B) a sample of existing consumer edu-
cation programs such as those described in the
Report of the National Bankruptcy Review
Commission (October 20, 1997) that are rep-
resentative of consumer education programs
carried out by the credit industry, by trustees
serving under chapter 13 of title 11, United
States Code, and by consumer counseling
groups.
(2) REPORT.—Not later than 3 months after
concluding such evaluation, the Director shall sub-
mit a report to the Speaker of the House of Rep-
resentatives and the President pro tempore of the
Senate, for referral to the appropriate committees of
the Congress, containing the findings of the Director
regarding the effectiveness of such curriculum, such
materials, and such programs and their costs.
SEC. 106. CREDIT COUNSELING.
(a) WHO MAY BE A DEBTOR.—Section 109 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(h)(1) Subject to paragraphs (2) and (3), and not-
withstanding any other provision of this section, an indi-
vidual may not be a debtor under this title unless such
individual has, during the 180-day period preceding the
date of filing of the petition by such individual, received
from an approved nonprofit budget and credit counseling
agency described in section 111(a) an individual or group
briefing (including a briefing conducted by telephone or
on the Internet) that outlined the opportunities for avail-
able credit counseling and assisted such individual in per-
forming a related budget analysis.
‘‘(2)(A) Paragraph (1) shall not apply with respect
to a debtor who resides in a district for which the United
States trustee (or the bankruptcy administrator, if any)
determines that the approved nonprofit budget and credit
counseling agencies for such district are not reasonably
able to provide adequate services to the additional individ-
uals who would otherwise seek credit counseling from such
agencies by reason of the requirements of paragraph (1).
‘‘(B) The United States trustee (or the bankruptcy
administrator, if any) who makes a determination de-
scribed in subparagraph (A) shall review such determina-
tion not later than 1 year after the date of such deter-
mination, and not less frequently than annually thereafter.
Notwithstanding the preceding sentence, a nonprofit
budget and credit counseling agency may be disapproved
by the United States trustee (or the bankruptcy adminis-
trator, if any) at any time.
‘‘(3)(A) Subject to subparagraph (B), the require-
ments of paragraph (1) shall not apply with respect to
a debtor who submits to the court a certification that—
‘‘(i) describes exigent circumstances that merit
a waiver of the requirements of paragraph (1);
‘‘(ii) states that the debtor requested credit
counseling services from an approved nonprofit
budget and credit counseling agency, but was unable
to obtain the services referred to in paragraph (1)
during the 5-day period beginning on the date on
which the debtor made that request; and
‘‘(iii) is satisfactory to the court.
‘‘(B) With respect to a debtor, an exemption under
subparagraph (A) shall cease to apply to that debtor on
the date on which the debtor meets the requirements of
paragraph (1), but in no case may the exemption apply
to that debtor after the date that is 30 days after the debt-
or files a petition, except that the court, for cause, may
order an additional 15 days.’’.
(b) CHAPTER 7 DISCHARGE.—Section 727(a) of title
11, United States Code, is amended—
(1) in paragraph (9), by striking ‘‘or’’ at the
end;
(2) in paragraph (10), by striking the period
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(11) after filing the petition, the debtor failed
to complete an instructional course concerning per-
sonal financial management described in section
111, except that this paragraph shall not apply with
respect to a debtor who resides in a district for
which the United States trustee (or the bankruptcy
administrator, if any) determines that the approved
instructional courses are not adequate to service the
additional individuals who would otherwise be re-
quired to complete such instructional courses under
this section (The United States trustee (or the bank-
ruptcy administrator, if any) who makes a deter-
mination described in this paragraph shall review
such determination not later than 1 year after the
date of such determination, and not less frequently
than annually thereafter.).’’.
(c) CHAPTER 13 DISCHARGE.—Section 1328 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(g)(1) 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.
‘‘(2) Paragraph (1) shall not apply with respect to
a debtor who resides in a district for which the United
States trustee (or the bankruptcy administrator, if any)
determines that the approved instructional courses are not
adequate to service the additional individuals who would
otherwise be required to complete such instructional
course by reason of the requirements of paragraph (1).
‘‘(3) The United States trustee (or the bankruptcy
administrator, if any) who makes a determination de-
scribed in paragraph (2) shall review such determination
not later than 1 year after the date of such determination,
and not less frequently than annually 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), a debtor who is an individual shall file with the
court—
‘‘(1) a certificate from the approved nonprofit
budget and credit counseling agency that provided
the debtor services under section 109(h) describing
the services provided to the debtor; and
‘‘(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the ap-
proved nonprofit budget and credit counseling agen-
cy referred to in paragraph (1).’’.
(e) GENERAL PROVISIONS.—
(1) IN GENERAL.—Chapter 1 of title 11, United
States Code, is amended by adding at the end the
following:
‘‘§ 111. Nonprofit budget and credit counseling agen-
cies; financial management instructional
courses
‘‘(a) The clerk shall maintain a publicly available list
of—
‘‘(1) nonprofit budget and credit counseling
agencies that provide 1 or more services described in
section 109(h) currently approved by the United
States trustee (or the bankruptcy administrator, if
any); and
‘‘(2) instructional courses concerning personal
financial management currently approved by the
United States trustee (or the bankruptcy adminis-
trator, if any), as applicable.
‘‘(b) The United States trustee (or bankruptcy ad-
ministrator, if any) shall only approve a nonprofit budget
and credit counseling agency or an instructional course
concerning personal financial management as follows:
‘‘(1) The United States trustee (or bankruptcy
administrator, if any) shall have thoroughly reviewed
the qualifications of the nonprofit budget and credit
counseling agency or of the provider of the instruc-
tional course under the standards set forth in this
section, and the services or instructional courses
that will be offered by such agency or such provider,
and may require such agency or such provider that
has sought approval to provide information with re-
spect to such review.
‘‘(2) The United States trustee (or bankruptcy
administrator, if any) shall have determined that
such agency or such instructional course fully satis-
fies the applicable standards set forth in this section.
‘‘(3) If a nonprofit budget and credit counseling
agency or instructional course did not appear on the
approved list for the district under subsection (a)
immediately before approval under this section, ap-
proval under this subsection of such agency or such
instructional course shall be for a probationary pe-
riod not to exceed 6 months.
‘‘(4) At the conclusion of the applicable proba-
tionary period under paragraph (3), the United
States trustee (or bankruptcy administrator, if any)
may only approve for an additional 1-year period,
and for successive 1-year periods thereafter, an
agency or instructional course that has dem-
onstrated during the probationary or applicable sub-
sequent period of approval that such agency or in-
structional course—
‘‘(A) has met the standards set forth under
this section during such period; and
‘‘(B) can satisfy such standards in the fu-
ture.
‘‘(5) Not later than 30 days after any final de-
cision under paragraph (4), an interested person
may seek judicial review of such decision in the ap-
propriate district court of the United States.
‘‘(c)(1) The United States trustee (or the bankruptcy
administrator, if any) shall only approve a nonprofit budg-
et and credit counseling agency that demonstrates that it
will provide qualified counselors, maintain adequate provi-
sion for safekeeping and payment of client funds, provide
adequate counseling with respect to client credit problems,
and deal responsibly and effectively with other matters re-
lating to the quality, effectiveness, and financial security
of the services it provides.
‘‘(2) To be approved by the United States trustee (or
the bankruptcy administrator, if any), a nonprofit budget
and credit counseling agency shall, at a minimum—
‘‘(A) have a board of directors the majority of
which—
‘‘(i) are not employed by such agency; and
‘‘(ii) will not directly or indirectly benefit
financially from the outcome of the counseling
services provided by such agency;
‘‘(B) if a fee is charged for counseling services,
charge a reasonable fee, and provide services without
regard to ability to pay the fee;
‘‘(C) provide for safekeeping and payment of
client funds, including an annual audit of the trust
accounts and appropriate employee bonding;
‘‘(D) provide full disclosures to a client, includ-
ing funding sources, counselor qualifications, pos-
sible impact on credit reports, and any costs of such
program that will be paid by such client and how
such costs will be paid;
‘‘(E) provide adequate counseling with respect
to a client’s credit problems that includes an anal-
ysis of such client’s current financial condition, fac-
tors that caused such financial condition, and how
such client can develop a plan to respond to the
problems without incurring negative amortization of
debt;
‘‘(F) provide trained counselors who receive no
commissions or bonuses based on the outcome of the
counseling services provided by such agency, and
who have adequate experience, and have been ade-
quately trained to provide counseling services to in-
dividuals in financial difficulty, including the mat-
ters described in subparagraph (E);
‘‘(G) demonstrate adequate experience and
background in providing credit counseling; and
‘‘(H) have adequate financial resources to pro-
vide continuing support services for budgeting plans
over the life of any repayment plan.
‘‘(d) The United States trustee (or the bankruptcy
administrator, if any) shall only approve an instructional
course concerning personal financial management—
‘‘(1) for an initial probationary period under
subsection (b)(3) if the course will provide at a
minimum—
‘‘(A) trained personnel with adequate expe-
rience and training in providing effective in-
struction and services;
‘‘(B) learning materials and teaching
methodologies designed to assist debtors in un-
derstanding personal financial management and
that are consistent with stated objectives di-
rectly related to the goals of such instructional
course;
‘‘(C) adequate facilities situated in reason-
ably convenient locations at which such instruc-
tional course is offered, except that such facili-
ties may include the provision of such instruc-
tional course by telephone or through the Inter-
net, if such instructional course is effective; and
‘‘(D) the preparation and retention of rea-
sonable records (which shall include the debt-
or’s bankruptcy case number) to permit evalua-
tion of the effectiveness of such instructional
course, including any evaluation of satisfaction
of instructional course requirements for each
debtor attending such instructional course,
which shall be available for inspection and eval-
uation by the Executive Office for United
States Trustees, the United States trustee (or
the bankruptcy administrator, if any), or the
chief bankruptcy judge for the district in which
such instructional course is offered; and
‘‘(2) for any 1-year period if the provider there-
of has demonstrated that the course meets the
standards of paragraph (1) and, in addition—
‘‘(A) has been effective in assisting a sub-
stantial number of debtors to understand per-
sonal financial management; and
‘‘(B) is otherwise likely to increase sub-
stantially the debtor’s understanding of per-
sonal financial management.
‘‘(e) The district court may, at any time, investigate
the qualifications of a nonprofit budget and credit coun-
seling agency referred to in subsection (a), and request
production of documents to ensure the integrity and effec-
tiveness of such agency. The district court may, at any
time, remove from the approved list under subsection (a)
a nonprofit budget and credit counseling agency upon
finding such agency does not meet the qualifications of
subsection (b).
‘‘(f) The United States trustee (or the bankruptcy ad-
ministrator, if any) shall notify the clerk that a nonprofit
budget and 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 nonprofit budget and credit counseling
agency may provide to a credit reporting agency informa-
tion concerning whether a debtor has received or sought
instruction concerning personal financial management
from such agency.
‘‘(2) A nonprofit budget and credit counseling agency
that willfully or negligently fails to comply with any re-
quirement under this title with respect to a debtor shall
be liable for damages in an amount equal to the sum of—
‘‘(A) any actual damages sustained by the debt-
or as a result of the violation; and
‘‘(B) any court costs or reasonable attorneys’
fees (as determined by the court) incurred in an ac-
tion to recover those damages.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 1 of title 11, United States Code,
is amended by adding at the end the following:
‘‘111. Nonprofit budget and credit counseling agencies; financial management
instructional courses.’’.
(f) LIMITATION.—Section 362 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘(i) If a case commenced under chapter 7, 11, or 13
is dismissed due to the creation of a debt repayment plan,
for purposes of subsection (c)(3), any subsequent case
commenced by the debtor under any such chapter shall
not be presumed to be filed not in good faith.
‘‘(j) On request of a party in interest, the court shall
issue an order under subsection (c) confirming that the
automatic stay has been terminated.’’.
SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY
EXPENSES.
For purposes of section 707(b) of title 11, United
States Code, as amended by this Act, the Director of the
Executive Office for United States Trustees shall, not
later than 180 days after the date of enactment of this
Act, issue schedules of reasonable and necessary adminis-
trative expenses of administering a chapter 13 plan for
each judicial district of the United States.
TITLE II—ENHANCED
CONSUMER PROTECTION
Subtitle A—Penalties for Abusive
Creditor Practices
SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLU-
TION.
(a) REDUCTION OF CLAIM.—Section 502 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(k)(1) The court, on the motion of the debtor and
after a hearing, may reduce a claim filed under this sec-
tion based in whole on an unsecured consumer debt 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 on behalf of the
debtor by an approved nonprofit budget and credit
counseling agency described in section 111;
‘‘(B) the offer of the debtor under subpara-
graph (A)—
‘‘(i) was made at least 60 days before the
date of the filing of the petition; and
‘‘(ii) provided for payment of at least 60
percent of the amount of the debt over a period
not to exceed the repayment period of the loan,
or a reasonable extension thereof; and
‘‘(C) no part of the debt under the alternative
repayment schedule is nondischargeable.
‘‘(2) The debtor shall have the burden of proving, by
clear and convincing evidence, that—
‘‘(A) the creditor unreasonably refused to con-
sider the debtor’s proposal; and
‘‘(B) the proposed alternative repayment sched-
ule was made prior to expiration of the 60-day pe-
riod specified in paragraph (1)(B)(i).’’.
(b) LIMITATION ON AVOIDABILITY.—Section 547 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(h) The trustee may not avoid a transfer if such
transfer was made as a part of an alternative repayment
schedule between the debtor and any creditor of the debtor
created by an approved nonprofit budget and credit coun-
seling agency.’’.
SEC. 202. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(i) The willful failure of a creditor to credit pay-
ments received under a plan confirmed under this title,
unless the order confirming the plan is revoked, the plan
is in default, or the creditor has not received payments
required to be made under the plan in the manner re-
quired by the plan (including crediting the amounts re-
quired under the plan), shall constitute a violation of an
injunction under subsection (a)(2) if the act of the creditor
to collect and failure to credit payments in the manner
required by the plan caused material injury to the debtor.
‘‘(j) Subsection (a)(2) does not operate as an injunc-
tion against an act by a creditor that is the holder of a
secured claim, if—
‘‘(1) such creditor retains a security interest in
real property that is the principal residence of the
debtor;
‘‘(2) such act is in the ordinary course of busi-
ness between the creditor and the debtor; and
‘‘(3) such act is limited to seeking or obtaining
periodic payments associated with a valid security
interest in lieu of pursuit of in rem relief to enforce
the lien.’’.
SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION
AGREEMENT PRACTICES.
(a) IN GENERAL.—Section 524 of title 11, United
States Code, as amended section 202, is amended—
(1) in subsection (c), by striking paragraph (2)
and inserting the following:
‘‘(2) the debtor received the disclosures de-
scribed in subsection (k) at or before the time at
which the debtor signed the agreement;’’; and
(2) by adding at the end the following:
‘‘(k)(1) The disclosures required under subsection
(c)(2) shall consist of the disclosure statement described
in paragraph (3), completed as required in that para-
graph, together with the agreement specified in subsection
(c), statement, declaration, motion and order described,
respectively, in paragraphs (4) through (8), and shall be
the only disclosures required in connection with entering
into such agreement.
‘‘(2) Disclosures made under paragraph (1) shall be
made clearly and conspicuously and in writing. The terms
‘Amount Reaffirmed’ and ‘Annual Percentage Rate’ shall
be disclosed more conspicuously than other terms, data or
information provided in connection with this disclosure,
except that the phrases ‘Before agreeing to reaffirm a
debt, review these important disclosures’ and ‘Summary
of Reaffirmation Agreement’ may be equally conspicuous.
Disclosures may be made in a different order and may
use terminology different from that set forth in para-
graphs (2) through (8), except that the terms ‘Amount
Reaffirmed’ and ‘Annual Percentage Rate’ must be used
where indicated.
‘‘(3) The disclosure statement required under this
paragraph shall consist of the following:
‘‘(A) The statement: ‘Part A: Before agreeing
to reaffirm a debt, review these important disclo-
sures:’;
‘‘(B) Under the heading ‘Summary of Reaffir-
mation Agreement’, the statement: ‘This Summary
is made pursuant to the requirements of the Bank-
ruptcy Code’;
‘‘(C) The ‘Amount Reaffirmed’, using that
term, which shall be—
‘‘(i) the total amount of debt that the debt-
or agrees to reaffirm by entering into an agree-
ment of the kind specified in subsection (c), and
‘‘(ii) the total of any fees and costs ac-
crued as of the date of the disclosure statement,
related to such total amount.
‘‘(D) In conjunction with the disclosure of the
‘Amount Reaffirmed’, the statements—
‘‘(i) ‘The amount of debt you have agreed
to reaffirm’; and
‘‘(ii) ‘Your credit agreement may obligate
you to pay additional amounts which may come
due after the date of this disclosure. Consult
your credit agreement.’.
‘‘(E) The ‘Annual Percentage Rate’, using that
term, which shall be disclosed as—
‘‘(i) if, at the time the petition is filed, the
debt is an extension of credit under an open
end credit plan, as the terms ‘credit’ and ‘open
end credit plan’ are defined in section 103 of
the Truth in Lending Act, then—
‘‘(I) the annual percentage rate deter-
mined under paragraphs (5) and (6) of
section 127(b) of the Truth in Lending
Act, as applicable, as disclosed to the debt-
or in the most recent periodic statement
prior to entering into an agreement of the
kind specified in subsection (c) or, if no
such periodic statement has been given to
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 to the debtor, or to the
extent this annual percentage rate is not
readily available or not applicable, then
‘‘(II) the simple interest rate applica-
ble to the amount reaffirmed as of the date
the disclosure statement is given to the
debtor, or if different simple interest rates
apply to different balances, the simple in-
terest rate applicable to each such balance,
identifying the amount of each such
balance included in the amount reaffirmed,
or
‘‘(III) if the entity making the disclo-
sure elects, to disclose the annual percent-
age rate under subclause (I) and the sim-
ple interest rate under subclause (II);
‘‘(ii) if, at the time the petition is filed, the
debt is an extension of credit other than under
an open end credit plan, as the terms ‘credit’
and ‘open end credit plan’ are defined in section
103 of the Truth in Lending Act, then—
‘‘(I) the annual percentage rate under
section 128(a)(4) of the Truth in Lending
Act, as disclosed to the debtor in the most
recent disclosure statement given to the
debtor prior to the entering into an agree-
ment of the kind specified in subsection (c)
with respect to the debt, or, if no such dis-
closure statement was given to the debtor,
the annual percentage rate as it would
have been so disclosed at the time the dis-
closure statement is given to the debtor, or
to the extent this annual percentage rate is
not readily available or not applicable, then
‘‘(II) the simple interest rate applica-
ble to the amount reaffirmed as of the date
the disclosure statement is given to the
debtor, or if different simple interest rates
apply to different balances, the simple in-
terest rate applicable to each such balance,
identifying the amount of such balance in-
cluded in the amount reaffirmed, or
‘‘(III) if the entity making the disclo-
sure elects, to disclose the annual percent-
age rate under (I) and the simple interest
rate under (II).
‘‘(F) If the underlying debt transaction was dis-
closed as a variable rate transaction on the most re-
cent disclosure given under the Truth in Lending
Act, by stating ‘The interest rate on your loan may
be a variable interest rate which changes from time
to time, so that the annual percentage rate disclosed
here may be higher or lower.’.
‘‘(G) If the debt is secured by a security inter-
est which has not been waived in whole or in part
or determined to be void by a final order of the
court at the time of the disclosure, by disclosing that
a security interest or lien in goods or property is as-
serted over some or all of the debts the debtor is re-
affirming and listing the items and their original
purchase price that are subject to the asserted secu-
rity interest, or if not a purchase-money security in-
terest then listing by items or types and the original
amount of the loan.
‘‘(H) At the election of the creditor, a state-
ment of the repayment schedule using 1 or a com-
bination of the following—
‘‘(i) by making the statement: ‘Your first
payment in the amount of $lll is due on
lll but the future payment amount may be
different. Consult your reaffirmation agreement
or credit agreement, as applicable.’, and stating
the amount of the first payment and the due
date of that payment in the places provided;
‘‘(ii) by making the statement: ‘Your pay-
ment schedule will be:’, and describing the re-
payment schedule with the number, amount,
and due dates or period of payments scheduled
to repay the debts reaffirmed to the extent then
known by the disclosing party; or
‘‘(iii) by describing the debtor’s repayment
obligations with reasonable specificity to the ex-
tent then known by the disclosing party.
‘‘(I) The following statement: ‘Note: When this
disclosure refers to what a creditor ‘‘may’’ do, it
does not use the word ‘‘may’’ to give the creditor
specific permission. The word ‘‘may’’ is used to tell
you what might occur if the law permits the creditor
to take the action. If you have questions about your
reaffirming a debt or what the law requires, consult
with the attorney who helped you negotiate this
agreement reaffirming a debt. If you don’t have an
attorney helping you, the judge will explain the ef-
fect of your reaffirming a debt when the hearing on
the reaffirmation agreement is held.’.
‘‘(J)(i) The following additional statements:
‘‘ ‘Reaffirming a debt is a serious financial decision.
The law requires you to take certain steps to make sure
the decision is in your best interest. If these steps are not
completed, the reaffirmation agreement is not effective,
even though you have signed it.
‘‘ ‘1. Read the disclosures in this Part A care-
fully. Consider the decision to reaffirm carefully.
Then, if you want to reaffirm, sign the reaffirmation
agreement in Part B (or you may use a separate
agreement you and your creditor agree on).
‘‘ ‘2. Complete and sign Part D and be sure you
can afford to make the payments you are agreeing
to make and have received a copy of the disclosure
statement and a completed and signed reaffirmation
agreement.
‘‘ ‘3. If you were represented by an attorney
during the negotiation of your reaffirmation agree-
ment, the attorney must have signed the certification
in Part C.
‘‘ ‘4. If you were not represented by an attorney
during the negotiation of your reaffirmation agree-
ment, you must have completed and signed Part E.
‘‘ ‘5. The original of this disclosure must be
filed with the court by you or your creditor. If a sep-
arate reaffirmation agreement (other than the one in
Part B) has been signed, it must be attached.
‘‘ ‘6. If you were represented by an attorney
during the negotiation of your reaffirmation agree-
ment, your reaffirmation agreement becomes effec-
tive upon filing with the court unless the reaffirma-
tion is presumed to be an undue hardship as ex-
plained in Part D.
‘‘ ‘7. If you were not represented by an attorney
during the negotiation of your reaffirmation agree-
ment, it will not be effective unless the court ap-
proves it. The court will notify you of the hearing on
your reaffirmation agreement. You must attend this
hearing in bankruptcy court where the judge will re-
view your reaffirmation agreement. The bankruptcy
court must approve your reaffirmation agreement as
consistent with your best interests, except that no
court approval is required if your reaffirmation
agreement is for a consumer debt secured by a mort-
gage, deed of trust, security deed, or other lien on
your real property, like your home.
‘‘ ‘Your right to rescind (cancel) your reaffirmation
agreement. You may rescind (cancel) your reaffirmation
agreement at any time before the bankruptcy court enters
a discharge order, or before the expiration of the 60-day
period that begins on the date your reaffirmation agree-
ment is filed with the court, whichever occurs later. To
rescind (cancel) your reaffirmation agreement, you must
notify the creditor that your reaffirmation agreement is
rescinded (or 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 case. That means
that if you default on your reaffirmed debt after your
bankruptcy case is over, your creditor may be able to take
your property or your wages. Otherwise, your obligations
will be determined by the reaffirmation agreement which
may have changed the terms of the original agreement.
For example, if you are reaffirming an open end credit
agreement, the creditor may be permitted by that agree-
ment or applicable law to change the terms of that agree-
ment in the future under certain conditions.
‘‘ ‘Are you required to enter into a reaffirmation
agreement by any law? No, you are not required to reaf-
firm a debt by any law. Only agree to reaffirm a debt if
it is in your best interest. Be sure you can afford the pay-
ments you agree to make.
‘‘ ‘What if your creditor has a security interest or
lien? Your bankruptcy discharge does not eliminate any
lien on your property. A ‘‘lien’’ is often referred to as a
security interest, deed of trust, mortgage or security deed.
Even if you do not reaffirm and your personal liability
on the debt is discharged, because of the lien your creditor
may still have the right to take the security property if
you do not pay the debt or default on it. If the lien is
on an item of personal property that is exempt under your
State’s law or that the trustee has abandoned, you may
be able to redeem the item rather than reaffirm the debt.
To redeem, you make a single payment to the creditor
equal to the current value of the security property, as
agreed by the parties or determined by the court.’.
‘‘(ii) In the case of a reaffirmation under sub-
section (m)(2), numbered paragraph 6 in the disclo-
sures required by clause (i) of this subparagraph
shall read as follows:
‘‘ ‘6. If you were represented by an attorney
during the negotiation of your reaffirmation agree-
ment, your reaffirmation agreement becomes effec-
tive upon filing with the court.’.
‘‘(4) The form of such agreement required under this
paragraph shall consist of the following:
‘‘ ‘Part B: Reaffirmation Agreement. I (we) agree to
reaffirm the debts arising under the credit agreement de-
scribed 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 these debts:
‘‘ ‘Accepted by creditor:
‘‘ ‘Date of creditor acceptance:’.
‘‘(5) The declaration shall consist of the following:
‘‘(A) The following certification:
‘‘ ‘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;
(2) this agreement does not impose an undue hardship on
the debtor or any dependent of the debtor; and (3) I have
fully advised the debtor of the legal effect and con-
sequences of this agreement and any default under this
agreement.
‘‘ ‘Signature of Debtor’s Attorney:
Date:’.
‘‘(B) If a presumption of undue hardship has
been established with respect to such agreement,
such certification shall state that in the opinion of
the attorney, the debtor is able to make the pay-
ment.
‘‘(C) In the case of a reaffirmation agreement under
subsection (m)(2), subparagraph (B) is not applicable.
‘‘(6)(A) The statement in support of such 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 reaffirmation agreement will not
impose an undue hardship on my dependents or me. I can
afford to make the payments on the reaffirmed debt be-
cause my monthly income (take home pay plus any other
income received) is $lll, and my actual current
monthly expenses including monthly payments on post-
bankruptcy debt and other reaffirmation agreements total
$lll, leaving $lll to make the required payments
on this reaffirmed debt. I understand that if my income
less my monthly expenses does not leave enough to make
the payments, this reaffirmation agreement is presumed
to be an undue hardship on me and must be reviewed by
the court. However, this presumption may be overcome if
I explain to the satisfaction of the court how I can afford
to make the payments here: lll.
‘‘ ‘2. I received a copy of the Reaffirmation Disclosure
Statement in Part A and a completed and signed reaffir-
mation agreement.’.
‘‘(B) Where the debtor is represented by an attorney
and is reaffirming a debt owed to a creditor defined in
section 19(b)(1)(A)(iv) of the Federal Reserve Act, the
statement of support of the reaffirmation agreement,
which the debtor shall sign and date prior to filing with
the court, shall consist of the following:
‘‘ ‘I believe this reaffirmation agreement is in my fi-
nancial 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 agreement.’.
‘‘(7) The motion that may be used if approval of such
agreement by the court is required in order for it to be
effective, shall be signed and dated by the movant and
shall consist of the following:
‘‘ ‘Part E: Motion for Court Approval (To be com-
pleted only if the debtor is not represented by an attor-
ney.). I (we), the debtor(s), affirm the following to be true
and correct:
‘‘ ‘I am not represented by an attorney in connection
with this reaffirmation agreement.
‘‘ ‘I believe this reaffirmation agreement is in my best
interest based on the income and expenses I have disclosed
in my Statement in Support of this reaffirmation agree-
ment, and because (provide any additional relevant rea-
sons the court should consider):
‘‘ ‘Therefore, I ask the court for an order approving
this reaffirmation agreement.’.
‘‘(8) The court order, which may be used to approve
such agreement, shall consist of the following:
‘‘ ‘Court Order: The court grants the debtor’s motion
and approves the reaffirmation agreement described
above.’.
‘‘(l) Notwithstanding any other provision of this title
the following shall apply:
‘‘(1) A creditor may accept payments from a
debtor before and after the filing of an agreement of
the kind specified in subsection (c) with the court.
‘‘(2) A creditor may accept payments from a
debtor under such agreement that the creditor be-
lieves in good faith to be effective.
‘‘(3) The requirements of subsections (c)(2) and
(k) shall be satisfied if disclosures required under
those subsections are given in good faith.
‘‘(m)(1) Until 60 days after an agreement of the kind
specified in subsection (c) is filed with the court (or such
additional period as the court, after notice and a hearing
and for cause, orders before the expiration of such period),
it shall be presumed that such 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 such agree-
ment required under subsection (k)(6)(A) is less than the
scheduled payments on the reaffirmed debt. This pre-
sumption shall be reviewed by the court. The presumption
may be rebutted in writing by the debtor if the statement
includes an explanation that identifies additional sources
of funds to make the payments as agreed upon under the
terms of such agreement. If the presumption is not rebut-
ted to the satisfaction of the court, the court may dis-
approve such agreement. No agreement shall be dis-
approved without notice and a hearing to the debtor and
creditor, and such hearing shall be concluded before the
entry of the debtor’s discharge.
‘‘(2) This subsection does not apply to reaffirmation
agreements where the creditor is a credit union, as defined
in section 19(b)(1)(A)(iv) of the Federal Reserve Act.’’.
(b) LAW ENFORCEMENT.—
(1) IN GENERAL.—Chapter 9 of title 18, United
States Code, is amended by adding at the end the
following:
‘‘§ 158. Designation of United States attorneys and
agents of the Federal Bureau of Inves-
tigation to address abusive reaffirma-
tions of debt and materially fraudulent
statements in bankruptcy schedules
‘‘(a) IN GENERAL.—The Attorney General of the
United States shall designate the individuals described in
subsection (b) to have primary responsibility in carrying
out enforcement activities in addressing violations of sec-
tion 152 or 157 relating to abusive reaffirmations of debt.
In addition to addressing the violations referred to in the
preceding sentence, the individuals described under sub-
section (b) shall address violations of section 152 or 157
relating to materially fraudulent statements in bankruptcy
schedules that are intentionally false or intentionally mis-
leading.
‘‘(b) UNITED STATES ATTORNEYS AND AGENTS OF
THE FEDERAL BUREAU OF INVESTIGATION.—The indi-
viduals referred to in subsection (a) are—
‘‘(1) the United States attorney for each judi-
cial district of the United States; and
‘‘(2) an agent of the Federal Bureau of Inves-
tigation for each field office of the Federal Bureau
of Investigation.
‘‘(c) BANKRUPTCY INVESTIGATIONS.—Each United
States attorney designated under this section shall, in ad-
dition to any other responsibilities, have primary responsi-
bility for carrying out the duties of a United States attor-
ney under section 3057.
‘‘(d) BANKRUPTCY PROCEDURES.—The bankruptcy
courts shall establish procedures for referring any case
that may contain a materially fraudulent statement in a
bankruptcy schedule to the individuals designated under
this section.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions 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—
(1) by redesignating subsection (o) as sub-
section (p), and
(2) by inserting after subsection (n) the fol-
lowing:
‘‘(o) Notwithstanding subsection (f), if a person pur-
chases any interest in a consumer credit transaction that
is subject to the Truth in Lending Act or any interest in
a consumer credit contract (as defined in section 433.1
of title 16 of the Code of Federal Regulations (January
1, 2002), as amended from time to time), and if such in-
terest is purchased through a sale under this section, then
such person shall remain subject to all claims and defenses
that are related to such consumer credit transaction or
such consumer credit contract, to the same extent as such
person would be subject to such claims and defenses of
the consumer had such interest been purchased at a sale
not under this section.’’.
SEC. 205. GAO STUDY AND REPORT ON REAFFIRMATION
AGREEMENT PROCESS.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study of the reaffirmation agree-
ment process that occurs under title 11 of the United
States Code, to determine the overall treatment of con-
sumers within the context of such process, and shall in-
clude in such study consideration of—
(1) the policies and activities of creditors with
respect to reaffirmation agreements; and
(2) whether consumers are fully, fairly, and
consistently informed of their rights pursuant to
such title.
(b) REPORT TO THE CONGRESS.—Not later than 18
months after the date of the enactment of this Act, the
Comptroller General shall submit to the President pro
tempore of the Senate and the Speaker of the House of
Representatives a report on the results of the study con-
ducted under subsection (a), together with recommenda-
tions for legislation (if any) to address any abusive or co-
ercive tactics found in connection with the reaffirmation
agreement process that occurs under title 11 of the United
States Code.
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 date of the
order for relief in a case under this title, including
interest that accrues on that debt as provided under
applicable nonbankruptcy law notwithstanding any
other provision of this title, that is—
‘‘(A) owed to or recoverable by—
‘‘(i) a spouse, former spouse, or child
of the debtor or such child’s parent, legal
guardian, or responsible relative; or
‘‘(ii) a governmental unit;
‘‘(B) in the nature of alimony, mainte-
nance, or support (including assistance provided
by a governmental unit) of such spouse, former
spouse, or child of the debtor or such child’s
parent, without regard to whether such debt is
expressly so designated;
‘‘(C) established or subject to establish-
ment before or after the date of the order for
relief in a case under this title, by reason of ap-
plicable 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
entity, unless that obligation is assigned volun-
tarily by the spouse, former spouse, child of the
debtor, or such child’s parent, legal guardian,
or responsible relative for the purpose of col-
lecting 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 so redesignated, by
striking ‘‘First’’ and inserting ‘‘Second’’;
(4) in paragraph (3), as so redesignated, by
striking ‘‘Second’’ and inserting ‘‘Third’’;
(5) in paragraph (4), as so 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 so redesignated, by
striking ‘‘Fourth’’ and inserting ‘‘Fifth’’;
(7) in paragraph (6), as so redesignated, by
striking ‘‘Fifth’’ and inserting ‘‘Sixth’’;
(8) in paragraph (7), as so redesignated, by
striking ‘‘Sixth’’ and inserting ‘‘Seventh’’; and
(9) by inserting before paragraph (2), as so re-
designated, the following:
‘‘(1) First:
‘‘(A) Allowed unsecured claims for domes-
tic support obligations that, as of the date of
the filing of the petition in a case under this
title, are owed to or recoverable by a spouse,
former spouse, or child of the debtor, or such
child’s parent, legal guardian, or responsible
relative, without regard to whether the claim is
filed by such person or is filed by a govern-
mental unit on behalf of such person, on the
condition that funds received under this para-
graph by a governmental unit under this title
after the date of the filing of the petition shall
be applied and distributed in accordance with
applicable nonbankruptcy law.
‘‘(B) Subject to claims under subpara-
graph (A), allowed unsecured claims for domes-
tic support obligations that, as of the date of
the filing of the petition, are assigned by a
spouse, former spouse, child of the debtor, or
such child’s parent, legal guardian, or respon-
sible relative to a governmental unit (unless
such obligation is assigned voluntarily by the
spouse, former spouse, child, parent, legal
guardian, or responsible relative of the child for
the purpose of collecting the debt) or are owed
directly to or recoverable by a governmental
unit under applicable nonbankruptcy law, on
the condition that funds received under this
paragraph by a governmental unit under this
title after the date of the filing of the petition
be applied and distributed in accordance with
applicable nonbankruptcy law.
‘‘(C) If a trustee is appointed or elected
under section 701, 702, 703, 1104, 1202, or
1302, the administrative expenses of the trustee
allowed under paragraphs (1)(A), (2), and (6)
of section 503(b) shall be paid before payment
of claims under subparagraphs (A) and (B), to
the extent that the trustee administers assets
that are otherwise available for the payment of
such claims.’’.
SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND
DISCHARGE IN CASES INVOLVING DOMESTIC
SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended—
(1) in section 1129(a), by adding at the end the
following:
‘‘(14) If the debtor is required by a judicial or
administrative order, or by statute, to pay a domes-
tic support obligation, the debtor has paid all
amounts payable under such order or such statute
for such obligation that first become payable after
the date of the filing of the petition.’’;
(2) in section 1208(c)—
(A) in paragraph (8), by striking ‘‘or’’ at
the end;
(B) in paragraph (9), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(10) failure of the debtor to pay any domestic
support obligation that first becomes payable after
the date of the filing of the petition.’’;
(3) in section 1222(a)—
(A) in paragraph (2), by striking ‘‘and’’ at
the end;
(B) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(4) notwithstanding any other provision of this
section, a plan may provide for less than full pay-
ment of all amounts owed for a claim entitled to pri-
ority under section 507(a)(1)(B) only if the plan
provides that all of the debtor’s projected disposable
income for a 5-year period beginning on the date
that the first payment is due under the plan will be
applied to make payments under the plan.’’;
(4) in section 1222(b)—
(A) by redesignating paragraph (11) as
paragraph (12); and
(B) by inserting after paragraph (10) the
following:
‘‘(11) provide for the payment of interest accru-
ing after the date of the filing of the petition on un-
secured claims that are nondischargeable under sec-
tion 1228(a), except that such interest may be paid
only to the extent that the debtor has disposable in-
come available to pay such interest after making
provision for full payment of all allowed claims;’’;
(5) in section 1225(a)—
(A) in paragraph (5), by striking ‘‘and’’ at
the end;
(B) in paragraph (6), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(7) the debtor has paid all amounts that are
required to be paid under a domestic support obliga-
tion and that first become payable after the date of
the filing of the petition if the debtor is required by
a judicial or administrative order, or by statute, to
pay such domestic support obligation.’’;
(6) in section 1228(a), in the matter preceding
paragraph (1), by inserting ‘‘, and in the case of a
debtor who is required by a judicial or administra-
tive order, or by statute, to pay a domestic support
obligation, after such debtor certifies that all
amounts payable under such order or such statute
that are due on or before the date of the certifi-
cation (including amounts due before the petition
was filed, but only to the extent provided for by the
plan) have been paid’’ after ‘‘completion by the debt-
or 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 of the filing of the petition.’’;
(8) in section 1322(a)—
(A) in paragraph (2), by striking ‘‘and’’ at
the end;
(B) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(4) notwithstanding any other provision of this
section, a plan may provide for less than full pay-
ment of all amounts owed for a claim entitled to pri-
ority under section 507(a)(1)(B) only if the plan
provides that all of the debtor’s projected disposable
income for a 5-year period beginning on the date
that the first payment is due under the plan will be
applied to make payments under the plan.’’;
(9) in section 1322(b)—
(A) in paragraph (9), by striking ‘‘; and’’
and inserting a semicolon;
(B) by redesignating paragraph (10) as
paragraph (11); and
(C) inserting after paragraph (9) the fol-
lowing:
‘‘(10) provide for the payment of interest accru-
ing after the date of the filing of the petition on un-
secured claims that are nondischargeable under sec-
tion 1328(a), except that such interest may be paid
only to the extent that the debtor has disposable in-
come available to pay such interest after making
provision for full payment of all allowed claims;
and’’;
(10) in section 1325(a), as amended by section
102, by inserting after paragraph (7) the following:
‘‘(8) the debtor has paid all amounts that are
required to be paid under a domestic support obliga-
tion and that first become payable after the date of
the filing of the petition if the debtor is required by
a judicial or administrative order, or by statute, to
pay such domestic support obligation; and’’;
(11) in section 1328(a), in the matter preceding
paragraph (1), by inserting ‘‘, and in the case of a
debtor who is required by a judicial or administra-
tive order, or by statute, to pay a domestic support
obligation, after such debtor certifies that all
amounts payable under such order or such statute
that are due on or before the date of the certifi-
cation (including amounts due before the petition
was filed, but only to the extent provided for by the
plan) have been paid’’ after ‘‘completion by the debt-
or of all payments under the plan’’.
SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, is
amended by striking paragraph (2) and inserting the fol-
lowing:
‘‘(2) under subsection (a)—
‘‘(A) of the commencement or continuation
of a civil action or proceeding—
‘‘(i) for the establishment of paternity;
‘‘(ii) for the establishment or modi-
fication of an order for domestic support
obligations;
‘‘(iii) concerning child custody or visi-
tation;
‘‘(iv) for the dissolution of a marriage,
except to the extent that such proceeding
seeks to determine the division of property
that is property of the estate; or
‘‘(v) regarding domestic violence;
‘‘(B) of the collection of a domestic sup-
port obligation from property that is not prop-
erty of the estate;
‘‘(C) with respect to the withholding of in-
come that is property of the estate or property
of the debtor for payment of a domestic support
obligation under a judicial or administrative
order or a statute;
‘‘(D) of the withholding, suspension, or re-
striction of a driver’s license, a professional or
occupational license, or a recreational license,
under State law, as specified in section
466(a)(16) of the Social Security Act;
‘‘(E) of the reporting of overdue support
owed by a parent to any consumer reporting
agency as specified in section 466(a)(7) of the
Social Security Act;
‘‘(F) of the interception of a tax refund, as
specified in sections 464 and 466(a)(3) of the
Social Security Act or under an analogous State
law; or
‘‘(G) of the enforcement of a medical obli-
gation, as specified under title IV of the Social
Security Act;’’.
SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR
ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is
amended—
(1) in subsection (a)—
(A) by striking paragraph (5) and insert-
ing the following:
‘‘(5) for a domestic support obligation;’’; and
(B) by striking paragraph (18);
(2) in subsection (c), by striking ‘‘(6), or (15)’’
each place it appears and inserting ‘‘or (6)’’; and
(3) in paragraph (15), as added by Public Law
103–394 (108 Stat. 4133)—
(A) by inserting ‘‘to a spouse, former
spouse, or child of the debtor and’’ before ‘‘not
of the kind’’;
(B) by inserting ‘‘or’’ after ‘‘court of
record,’’; and
(C) by striking ‘‘unless—’’ and all that fol-
lows through the end of the paragraph and in-
serting a semicolon.
SEC. 216. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is
amended—
(1) in subsection (c), by striking paragraph (1)
and inserting the following:
‘‘(1) a debt of a kind specified in paragraph (1)
or (5) of section 523(a) (in which case, notwith-
standing any provision of applicable nonbankruptcy
law to the contrary, such property shall be liable for
a debt of a kind specified in section 523(a)(5));’’;
(2) in subsection (f)(1)(A), by striking the dash
and all that follows through the end of the subpara-
graph and inserting ‘‘of a kind that is specified in
section 523(a)(5); or’’; and
(3) in subsection (g)(2), by striking ‘‘subsection
(f)(2)’’ and inserting ‘‘subsection (f)(1)(B)’’.
SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS
AGAINST 
PREFERENTIAL 
TRANSFER 
MO-
TIONS.
Section 547(c)(7) of title 11, United States Code, is
amended to read as follows:
‘‘(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obliga-
tion;’’.
SEC. 218. DISPOSABLE INCOME DEFINED.
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 of the
filing of the petition’’ after ‘‘dependent of the debtor’’.
SEC. 219. COLLECTION OF CHILD SUPPORT.
(a) DUTIES OF TRUSTEE UNDER CHAPTER 7.—Sec-
tion 704 of title 11, United States Code, as amended by
section 102, is amended—
(1) in subsection (a)—
(A) in paragraph (8), by striking ‘‘and’’ at
the end;
(B) in paragraph (9), by striking the pe-
riod and inserting a semicolon; and
(C) by adding at the end the following:
‘‘(10) if with respect to the debtor there is a
claim for a domestic support obligation, provide the
applicable notice specified in subsection (c); and’’;
and
(2) by adding at the end the following:
‘‘(c)(1) In a case described in subsection (a)(10) to
which subsection (a)(10) applies, the trustee shall—
‘‘(A)(i) provide written notice to the holder of
the claim described in subsection (a)(10) of such
claim and of the right of such holder to use the serv-
ices of the State child support enforcement agency
established under sections 464 and 466 of the Social
Security Act for the State in which such holder re-
sides, for assistance in collecting child support dur-
ing and after the case under this title;
‘‘(ii) include in the notice provided under clause
(i) the address and telephone number of such State
child support enforcement agency; and
‘‘(iii) include in the notice provided under
clause (i) an explanation of the rights of such holder
to payment of such claim under this chapter;
‘‘(B)(i) provide written notice to such State
child support enforcement agency of such claim; and
‘‘(ii) include in the notice provided under clause
(i) the name, address, and telephone number of such
holder; and
‘‘(C) at such time as the debtor is granted a
discharge under section 727, provide written notice
to such holder and to such State child support en-
forcement agency 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) the name of each creditor that holds
a claim that—
‘‘(I) is not discharged under para-
graph (2), (4), or (14A) of section 523(a);
or
‘‘(II) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) The holder of a claim described in subsection
(a)(10) or the State child support enforcement agency of
the State in which such holder resides may request from
a creditor described in paragraph (1)(C)(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 by reason of making such
disclosure.’’.
(b) DUTIES OF TRUSTEE UNDER CHAPTER 11.—
Section 1106 of title 11, United States Code, is
amended—
(1) in subsection (a)—
(A) in paragraph (6), by striking ‘‘and’’ at
the end;
(B) in paragraph (7), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(8) if with respect to the debtor there is a
claim for a domestic support obligation, provide the
applicable notice specified in subsection (c).’’; and
(2) by adding at the end the following:
‘‘(c)(1) In a case described in subsection (a)(8) to
which subsection (a)(8) applies, the trustee shall—
‘‘(A)(i) provide written notice to the holder of
the claim described in subsection (a)(8) of such
claim and of the right of such holder to use the serv-
ices of the State child support enforcement agency
established under sections 464 and 466 of the Social
Security Act for the State in which such holder re-
sides, for assistance in collecting child support dur-
ing and after the case under this title; and
‘‘(ii) include in the notice required by clause (i)
the address and telephone number of such State
child support enforcement agency;
‘‘(B)(i) provide written notice to such State
child support enforcement agency of such claim; and
‘‘(ii) include in the notice required by clause (i)
the name, address, and telephone number of such
holder; and
‘‘(C) at such time as the debtor is granted a
discharge under section 1141, provide written notice
to such holder and to such State child support en-
forcement agency 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) the name of each creditor that holds
a claim that—
‘‘(I) is not discharged under para-
graph (2), (4), or (14A) of section 523(a);
or
‘‘(II) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) The holder of a claim described in subsection
(a)(8) or the State child enforcement support agency of
the State in which such holder resides may request from
a creditor described in paragraph (1)(C)(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 by reason of making such
disclosure.’’.
(c) DUTIES OF TRUSTEE UNDER CHAPTER 12.—
Section 1202 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (4), by striking ‘‘and’’ at
the end;
(B) in paragraph (5), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) if with respect to the debtor there is a
claim for a domestic support obligation, provide the
applicable notice specified in subsection (c).’’; and
(2) by adding at the end the following:
‘‘(c)(1) In a case described in subsection (b)(6) to
which subsection (b)(6) applies, the trustee shall—
‘‘(A)(i) provide written notice to the holder of
the claim described in subsection (b)(6) of such
claim and of the right of such holder to use the serv-
ices of the State child support enforcement agency
established under sections 464 and 466 of the Social
Security Act for the State in which such holder re-
sides, for assistance in collecting child support dur-
ing and after the case under this title; and
‘‘(ii) include in the notice provided under clause
(i) the address and telephone number of such State
child support enforcement agency;
‘‘(B)(i) provide written notice to such State
child support enforcement agency of such claim; and
‘‘(ii) include in the notice provided under clause
(i) the name, address, and telephone number of such
holder; and
‘‘(C) at such time as the debtor is granted a
discharge under section 1228, provide written notice
to such holder and to such State child support en-
forcement agency 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) the name of each creditor that holds
a claim that—
‘‘(I) is not discharged under para-
graph (2), (4), or (14A) of section 523(a);
or
‘‘(II) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) The holder of a claim described in subsection
(b)(6) or the State child support enforcement agency of
the State in which such holder resides may request from
a creditor described in paragraph (1)(C)(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 by reason of making that
disclosure.’’.
(d) DUTIES OF TRUSTEE UNDER CHAPTER 13.—
Section 1302 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (4), by striking ‘‘and’’ at
the end;
(B) in paragraph (5), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) if with respect to the debtor there is a
claim for a domestic support obligation, provide the
applicable notice specified in subsection (d).’’; and
(2) by adding at the end the following:
‘‘(d)(1) In a case described in subsection (b)(6) to
which subsection (b)(6) applies, the trustee shall—
‘‘(A)(i) provide written notice to the holder of
the claim described in subsection (b)(6) of such
claim and of the right of such holder to use the serv-
ices of the State child support enforcement agency
established under sections 464 and 466 of the Social
Security Act for the State in which such holder re-
sides, for assistance in collecting child support dur-
ing and after the case under this title; and
‘‘(ii) include in the notice provided under clause
(i) the address and telephone number of such State
child support enforcement agency;
‘‘(B)(i) provide written notice to such State
child support enforcement agency of such claim; and
‘‘(ii) include in the notice provided under clause
(i) the name, address, and telephone number of such
holder; and
‘‘(C) at such time as the debtor is granted a
discharge under section 1328, provide written notice
to such holder and to such State child support en-
forcement agency 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) the name of each creditor that holds
a claim that—
‘‘(I) is not discharged under para-
graph (2) or (4) of section 523(a); or
‘‘(II) was reaffirmed by the debtor
under section 524(c).
‘‘(2)(A) The holder of a claim described in subsection
(b)(6) or the State child support enforcement agency of
the State in which such holder resides may request from
a creditor described in paragraph (1)(C)(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 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 defined in section
221(d)(1) of the Internal Revenue Code of
1986, incurred by a debtor who is an indi-
vidual;’’.
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 ‘‘or an em-
ployee of an attorney’’ and inserting ‘‘for the debtor
or an employee of such attorney under the direct su-
pervision of such attorney’’;
(2) in subsection (b)—
(A) in paragraph (1), by adding at the end
the following: ‘‘If a bankruptcy petition pre-
parer is not an individual, then an officer, prin-
cipal, responsible person, or partner of the
bankruptcy petition 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 insert-
ing the following:
‘‘(2)(A) Before preparing any document for filing or
accepting any fees from a debtor, the bankruptcy petition
preparer shall provide to the debtor a written notice which
shall be on an official form prescribed by the Judicial Con-
ference of the United States in accordance with rule 9009
of the Federal Rules of Bankruptcy Procedure.
‘‘(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 the debtor and, under
penalty of perjury, by the bankruptcy petition
preparer; and
‘‘(II) be filed with any document for fil-
ing.’’;
(3) in subsection (c)—
(A) in paragraph (2)—
(i) by striking ‘‘(2) For purposes’’ and
inserting ‘‘(2)(A) Subject to subparagraph
(B), for purposes’’; and
(ii) by adding at the end the fol-
lowing:
‘‘(B) If a bankruptcy petition preparer is not an indi-
vidual, the identifying number of the bankruptcy petition
preparer shall be the Social Security account number of
the officer, principal, responsible person, or partner of the
bankruptcy petition preparer.’’; and
(B) by striking paragraph (3);
(4) in subsection (d)—
(A) by striking ‘‘(d)(1)’’ and inserting
‘‘(d)’’; and
(B) by striking paragraph (2);
(5) in subsection (e)—
(A) by striking paragraph (2); and
(B) by adding at the end the following:
‘‘(2)(A) A bankruptcy petition preparer may not offer
a potential bankruptcy debtor any legal advice, including
any legal advice described in subparagraph (B).
‘‘(B) The legal advice referred to in subparagraph
(A) includes advising the debtor—
‘‘(i) whether—
‘‘(I) to file a petition under this title; or
‘‘(II) commencing a case under chapter 7,
11, 12, or 13 is appropriate;
‘‘(ii) whether the debtor’s debts will be dis-
charged in a case under this title;
‘‘(iii) whether the debtor will be able to retain
the debtor’s home, car, or other property after com-
mencing a case under this title;
‘‘(iv) concerning—
‘‘(I) the tax consequences of a case
brought under this title; or
‘‘(II) the dischargeability of tax claims;
‘‘(v) whether the debtor may or should promise
to repay debts to a creditor or enter into a reaffir-
mation agreement with a creditor to reaffirm a debt;
‘‘(vi) concerning how to characterize the nature
of the debtor’s interests in property or the debtor’s
debts; or
‘‘(vii) concerning bankruptcy procedures and
rights.’’;
(6) in subsection (f)—
(A) by striking ‘‘(f)(1)’’ and inserting
‘‘(f)’’; and
(B) by striking paragraph (2);
(7) in subsection (g)—
(A) by striking ‘‘(g)(1)’’ and inserting
‘‘(g)’’; and
(B) by striking paragraph (2);
(8) in subsection (h)—
(A) 
by 
redesignating 
paragraphs 
(1)
through (4) as paragraphs (2) through (5), re-
spectively;
(B) by inserting before paragraph (2), as
so 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 so redesignated—
(i) by striking ‘‘Within 10 days after
the date of the filing of a petition, a bank-
ruptcy petition preparer shall file a’’ and
inserting ‘‘A’’;
(ii) by inserting ‘‘by the bankruptcy
petition preparer shall be filed together
with the petition,’’ after ‘‘perjury’’; and
(iii) by adding at the end the fol-
lowing: ‘‘If rules or guidelines setting a
maximum fee for services have been pro-
mulgated or prescribed under paragraph
(1), the declaration under this paragraph
shall include a certification that the bank-
ruptcy petition preparer complied with the
notification requirement under paragraph
(1).’’;
(D) by striking paragraph (3), as so redes-
ignated, and inserting the following:
‘‘(3)(A) The court shall disallow and order the imme-
diate 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 bankruptcy petition pre-
parer during the 12-month period immediately pre-
ceding the date of the 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 pre-
parer 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 recovered
under this paragraph under section 522(b).’’; and
(E) in paragraph (4), as so redesignated,
by striking ‘‘or the United States trustee’’ and
inserting ‘‘the United States trustee (or the
bankruptcy administrator, if any) or the court,
on the initiative of the court,’’;
(9) in subsection (i)(1), by striking the matter
preceding subparagraph (A) and inserting the fol-
lowing:
‘‘(i)(1) If a bankruptcy petition preparer violates this
section or commits any act that the court finds to be
fraudulent, unfair, or deceptive, on the motion of the debt-
or, trustee, United States trustee (or the bankruptcy ad-
ministrator, if any), and after notice and a hearing, the
court shall order the bankruptcy petition preparer to pay
to the debtor—’’;
(10) in subsection (j)—
(A) in paragraph (2)—
(i) in subparagraph (A)(i)(I), by strik-
ing ‘‘a violation of which subjects a person
to criminal penalty’’;
(ii) in subparagraph (B)—
(I) by striking ‘‘or has not paid
a penalty’’ and inserting ‘‘has not
paid a penalty’’; and
(II) by inserting ‘‘or failed to dis-
gorge all fees ordered by the court’’
after ‘‘a penalty imposed under this
section,’’;
(B) by redesignating paragraph (3) as
paragraph (4); and
(C) by inserting after paragraph (2) the
following:
‘‘(3) The court, as part of its contempt power, may
enjoin a bankruptcy petition preparer that has failed to
comply with a previous order issued under this section.
The injunction under this paragraph may be issued on the
motion of the court, the trustee, or the United States
trustee (or the bankruptcy administrator, if any).’’; and
(11) by adding at the end the following:
‘‘(l)(1) A bankruptcy petition preparer who fails to
comply with any provision of subsection (b), (c), (d), (e),
(f), (g), or (h) may be fined not more than $500 for each
such failure.
‘‘(2) The court shall triple the amount of a fine as-
sessed under paragraph (1) in any case in which the court
finds that a bankruptcy petition preparer—
‘‘(A) advised the debtor to exclude assets or in-
come that should have been included on applicable
schedules;
‘‘(B) advised the debtor to use a false Social
Security account number;
‘‘(C) failed to inform the debtor that the debtor
was filing for relief under this title; or
‘‘(D) prepared a document for filing in a man-
ner that failed to disclose the identity of the bank-
ruptcy petition preparer.
‘‘(3) A debtor, trustee, creditor, or United States
trustee (or the bankruptcy administrator, if any) may file
a motion for an order imposing a fine on the bankruptcy
petition preparer for any violation of this section.
‘‘(4)(A) Fines imposed under this subsection in judi-
cial districts served by United States trustees shall be paid
to the United States trustee, who shall deposit an amount
equal to such fines in a special account of the United
States Trustee System Fund referred to in section
586(e)(2) of title 28. Amounts deposited under this sub-
100
paragraph shall be available to fund the enforcement of
this section on a national basis.
‘‘(B) Fines imposed under this subsection in judicial
districts served by bankruptcy administrators shall be de-
posited as offsetting receipts to the fund established under
section 1931 of title 28, and shall remain available until
expended to reimburse any appropriation for the amount
paid out of such appropriation for expenses of the oper-
ation and maintenance of the courts of the United
States.’’.
SEC. 222. SENSE OF CONGRESS.
It is the sense of Congress that States should develop
curricula relating to the subject of personal finance, de-
signed for use in elementary and secondary schools.
SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED
STATES CODE.
Section 507(a) of title 11, United States Code, as
amended by section 212, is amended by inserting after
paragraph (9) the following:
‘‘(10) Tenth, allowed claims for death or per-
sonal injury 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.’’.
101
SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANK-
RUPTCY.
(a) IN GENERAL.—Section 522 of title 11, United
States Code, is amended—
(1) in subsection (b)—
(A) in paragraph (2)—
(i) in subparagraph (A), by striking
‘‘and’’ at the end;
(ii) in subparagraph (B), by striking
the period at the end and inserting ‘‘;
and’’;
(iii) by adding at the end the fol-
lowing:
‘‘(C) retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of
1986.’’; and
(iv) by striking ‘‘(2)(A) any property’’
and inserting:
‘‘(3) Property listed in this paragraph is—
‘‘(A) any property’’;
(B) by striking paragraph (1) and insert-
ing:
‘‘(2) Property listed in this paragraph is property
that is specified under subsection (d), unless the State law
102
that is applicable to the debtor under paragraph (3)(A)
specifically does not so authorize.’’;
(C) by striking ‘‘(b) Notwithstanding’’ and
inserting ‘‘(b)(1) Notwithstanding’’;
(D) by striking ‘‘paragraph (2)’’ each place
it appears and inserting ‘‘paragraph (3)’’;
(E) by striking ‘‘paragraph (1)’’ each place
it appears and inserting ‘‘paragraph (2)’’;
(F) by striking ‘‘Such property is—’’; and
(G) by adding at the end the following:
‘‘(4) For purposes of paragraph (3)(C) and sub-
section (d)(12), the following shall apply:
‘‘(A) If the retirement funds are in a retirement
fund that has received a favorable determination
under section 7805 of the Internal Revenue Code of
1986, and that determination is in effect as of the
date of the filing of the petition in a case under this
title, those funds shall be presumed to be exempt
from the estate.
‘‘(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
under such section 7805, those funds are exempt
from the estate if the debtor demonstrates that—
104
‘‘(ii) A distribution described in this clause is
an amount that—
‘‘(I) has been distributed from a fund or
account that is exempt from taxation under sec-
tion 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 de-
posited in such a fund or account not later than
60 days after the distribution of such 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:
‘‘(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 Internal 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;
105
(2) in paragraph (18), by striking the period
and inserting a semicolon; and
(3) by inserting after paragraph (18) the fol-
lowing:
‘‘(19) under subsection (a), of withholding of
income from a debtor’s wages and collection of
amounts withheld, under the debtor’s agreement au-
thorizing that withholding and collection for the ben-
efit of 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, that is sponsored by the employer of
the debtor, or an affiliate, successor, or predecessor
of such employer—
‘‘(A) to the extent that the amounts with-
held and collected are used solely for payments
relating to a loan from a plan under section
408(b)(1) of the Employee Retirement Income
Security Act of 1974 or is subject to section
72(p) of the Internal Revenue Code of 1986; or
‘‘(B) a loan from a thrift savings plan per-
mitted under subchapter III of chapter 84 of
title 5, that satisfies the requirements of section
8433(g) of such title;
106
but nothing in this paragraph 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 section 215,
is amended by inserting after paragraph (17) the fol-
lowing:
‘‘(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
‘‘(B) a loan from a thrift savings plan per-
mitted under subchapter III of chapter 84 of
title 5, that satisfies the requirements of section
8433(g) of such title;
but nothing in this paragraph may be construed to
provide that any loan made under a governmental
plan under section 414(d), or a contract or account
107
under section 403(b), of the Internal Revenue Code
of 1986 constitutes a claim or a debt under this
title; or’’.
(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.—
(1) 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 such Code or a simple retirement
account under section 408(p) of such Code, the aggregate
value of such assets exempted under this section, without
regard to amounts attributable to rollover contributions
under section 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 in a case
filed by a debtor who is an individual, except that such
108
amount may be increased if the interests of justice so re-
quire.’’.
(2) ADJUSTMENT
OF
DOLLAR
AMOUNTS.—
Paragraphs (1) and (2) of section 104(b) of title 11,
United States Code, are amended by inserting
‘‘522(n),’’ after ‘‘522(d),’’.
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 (9); and
(C) by inserting after paragraph (4) the
following:
‘‘(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 the filing of the petition
in a case under this title, but—
‘‘(A) only if the designated beneficiary of
such account was a child, stepchild, grandchild,
or stepgrandchild of the debtor for the taxable
109
year for which funds were placed in such ac-
count;
‘‘(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 bene-
ficiary 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 accord-
ance with section 529(b)(1)(A) of the Internal Rev-
enue 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 the
filing of the petition in a case under this title, but—
‘‘(A) only if the designated beneficiary of
the amounts paid or contributed to such tuition
program was a child, stepchild, grandchild, or
110
stepgrandchild of the 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 in a case under this title by the an-
nual increase or decrease (rounded to the near-
est tenth of 1 percent) in the education expend-
iture category of the Consumer Price Index pre-
pared by the Department of Labor; and
‘‘(C) in the case of funds paid or contrib-
uted to such program having the same des-
ignated beneficiary not earlier than 720 days
nor later than 365 days before such date, only
so much of such funds as does not exceed
$5,000;’’; and
(2) by adding at the end the following:
‘‘(e) In determining whether any of the relationships
specified in paragraph (5)(A) or (6)(A) of subsection (b)
exists, a legally adopted child of an individual (and a child
who is a member of an individual’s household, if placed
111
with such individual by an authorized placement agency
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 section 106, is amend-
ed 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 the
value of whose nonexempt property is less than
$150,000;’’;
112
(2) by inserting after paragraph (4) the fol-
lowing:
‘‘(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’ meet-
ing or appearing in a proceeding on behalf of an-
other 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 who is an officer, director,
employee, or agent of a person who provides
such assistance or of the bankruptcy petition
preparer;
‘‘(B) a nonprofit organization that is ex-
empt from taxation under section 501(c)(3) of
the Internal Revenue Code of 1986;
113
‘‘(C) a creditor of such assisted person, to
the extent that the creditor is assisting such as-
sisted person to restructure any debt owed by
such assisted person to the creditor;
‘‘(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 depository institu-
tion 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) of
title 11, United States Code, is amended by inserting
‘‘101(3),’’ after ‘‘sections’’ each place it appears.
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 agen-
cy informed an assisted person or prospective as-
114
sisted 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
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, af-
firmatively or by material omission, with respect
to—
‘‘(A) the services that such agency will pro-
vide to such person; or
‘‘(B) 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
assisted 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.
115
‘‘(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.
‘‘(c)(1) Any contract for bankruptcy assistance be-
tween a debt relief agency and an assisted person that
does not comply with the material requirements of this
section, section 527, or section 528 shall be void and may
not be enforced 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 a 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 an-
other chapter of this title because of such agency’s
116
intentional or negligent failure to file any required
document including those specified in section 521; or
‘‘(C) intentionally or negligently disregarded the
material requirements of this title or the Federal
Rules of Bankruptcy Procedure applicable to such
agency.
‘‘(3) In addition to such other remedies as are pro-
vided 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 violating 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 per-
sons arising from such violation, including any liabil-
ity 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 attorneys’ fees as deter-
mined by the court.
‘‘(4) The district courts of the United States for dis-
tricts located in the State shall have concurrent jurisdic-
tion of any action under subparagraph (A) or (B) of para-
graph (3).
117
‘‘(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 the motion of the United States trustee or the debtor,
finds 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 inconsistent with those sections, and then only to
the extent 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
118
‘‘(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 sec-
tions for chapter 5 of title 11, United States Code, is
amended by inserting after the item relating to section
525, the following:
‘‘526. Restrictions on debt relief agencies.’’.
SEC. 228. DISCLOSURES.
(a) DISCLOSURES.—Subchapter II of chapter 5 of
title 11, United States Code, as amended by section 227,
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); 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
relief agency first offers to provide any bankruptcy
assistance 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
119
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 the replacement value of each asset as de-
fined in section 506 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 of this title, disposable income
(determined 
in 
accordance 
with 
section
707(b)(2)), are required to be stated after rea-
sonable 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
case under this title or other sanction, including
a criminal sanction.
‘‘(b) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide each assisted per-
son at the same time as the notices required under sub-
section (a)(1) the following statement, to the extent appli-
120
cable, 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:
‘‘ ‘IMPORTANT INFORMATION ABOUT BANK-
RUPTCY ASSISTANCE SERVICES FROM AN AT-
TORNEY 
OR 
BANKRUPTCY 
PETITION 
PRE-
PARER.
‘‘ ‘If you decide to seek bankruptcy relief, you can
represent yourself, you can hire an attorney to represent
you, or you can get help in some localities from a bank-
ruptcy petition preparer who is not an attorney. THE
LAW REQUIRES AN ATTORNEY OR BANKRUPTCY
PETITION PREPARER TO GIVE YOU A WRITTEN
CONTRACT 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 available under the Bankruptcy Code and
121
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 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 ques-
tioned by a court official called a ‘trustee’ and by credi-
tors.
‘‘ ‘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. 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 chap-
ter 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 should be done from someone famil-
iar with that type of relief.
122
‘‘ ‘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 pro-
vides the required information itself after reasonably dili-
gent inquiry of the assisted person or others so as to ob-
tain such information reasonably accurately for inclusion
on the petition, schedules or statement of financial affairs,
a debt relief agency providing bankruptcy assistance to an
assisted person, to the extent permitted by nonbankruptcy
law, shall provide each assisted person at the time re-
quired for the notice required under subsection (a)(1) rea-
sonably sufficient information (which shall be provided in
a clear and conspicuous writing) to the assisted person
on how to provide all the information the assisted person
is required to provide under this title pursuant to section
521, including—
‘‘(1) how to value assets at replacement value,
determine current monthly income, the amounts
specified in section 707(b)(2) and, in a chapter 13
case, how to determine disposable income in accord-
ance with section 707(b)(2) and related calculations;
123
‘‘(2) how to complete the list of creditors, in-
cluding 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.
‘‘(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.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by section 227, 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 sections 227
and 228, 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 on which such agency provides any bank-
ruptcy assistance services to an assisted person, but
prior to such assisted person’s petition under this
title being filed, execute a written contract with such
124
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
public (whether in general media, seminars or spe-
cific mailings, telephonic or electronic messages, or
otherwise) that the services or benefits are with re-
spect to bankruptcy relief under this title; and
‘‘(4) clearly and conspicuously use the following
statement in such advertisement: ‘We are a debt re-
lief agency. We help people file for bankruptcy relief
under the Bankruptcy Code.’ or a substantially simi-
lar statement.
‘‘(b)(1) An advertisement of bankruptcy assistance
services or of the benefits of bankruptcy directed to the
general public includes—
‘‘(A) descriptions of bankruptcy assistance in
connection with a chapter 13 plan whether or not
125
chapter 13 is specifically mentioned in such adver-
tisement; and
‘‘(B) statements such as ‘federally supervised
repayment plan’ or ‘Federal debt restructuring help’
or other similar statements that could lead a reason-
able consumer to believe that debt counseling was
being offered when in fact the services were directed
to providing 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-
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 bank-
ruptcy relief under the Bankruptcy Code.’ or a sub-
stantially similar statement.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
126
amended by section 227 and 228, is amended by inserting
after the item relating to section 527, the following:
‘‘528. Requirements for debt relief agencies.’’.
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, ef-
fectiveness, 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 debtors who
are individuals under such title, the names and social secu-
rity account numbers of such debtors for the purposes of
allowing such Office to determine whether such debtors
have outstanding obligations for child support (as deter-
mined 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
submit to the President pro tempore of the Senate and
the Speaker of the House of Representatives a report con-
taining the results of the study required by subsection (a).
127
SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE IN-
FORMATION.
(a) LIMITATION.—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 debtor in connection with offering
a product or a service discloses to an individual a policy
prohibiting the transfer of personally identifiable informa-
tion about individuals to persons that are not affiliated
with the debtor and if such policy is in effect on the date
of the commencement of the case, then the trustee may
not sell or lease personally identifiable information to any
person unless—
‘‘(A) such sale or such lease is consistent with
such policy; or
‘‘(B) after appointment of a consumer privacy
ombudsman in accordance with section 332, and
after notice and a hearing, the court approves such
sale or such lease—
‘‘(i) giving due consideration to the facts,
circumstances, and conditions of such sale or
such lease; and
‘‘(ii) finding that no showing was made
that such sale or such lease would violate appli-
cable nonbankruptcy law.’’.
128
(b) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (41)
the following:
‘‘(41A) ‘personally identifiable information’
means—
‘‘(A) if provided by an individual to the
debtor in connection with obtaining a product
or a service from the debtor primarily for per-
sonal, family, or household purposes—
‘‘(i) the first name (or initial) and last
name of such individual, whether given at
birth or time of adoption, or resulting from
a lawful change of name;
‘‘(ii) the geographical address of a
physical place of residence of such indi-
vidual;
‘‘(iii) an electronic address (including
an e-mail address) of such individual;
‘‘(iv) a telephone number dedicated to
contacting such individual at such physical
place of residence;
‘‘(v) a social security account number
issued to such individual; or
‘‘(vi) the account number of a credit
card issued to such individual; or
129
‘‘(B) if identified in connection with 1 or
more of the items of information specified in
subparagraph (A)—
‘‘(i) a birth date, the number of a cer-
tificate of birth or adoption, or a place of
birth; or
‘‘(ii) any other information concerning
an identified individual that, if disclosed,
will result in contacting or identifying such
individual physically or electronically;’’.
SEC. 232. CONSUMER PRIVACY OMBUDSMAN.
(a) CONSUMER PRIVACY OMBUDSMAN.—Title 11 of
the United States Code is amended by inserting after sec-
tion 331 the following:
‘‘§ 332. Consumer privacy ombudsman
‘‘(a) If a hearing is required under section
363(b)(1)(B), the court shall order the United States
trustee to appoint, not later than 5 days before the com-
mencement of the hearing, 1 disinterested person (other
than the United States trustee) to serve as the consumer
privacy ombudsman in the case and shall require that no-
tice of such hearing be timely given to such ombudsman.
‘‘(b) The consumer privacy ombudsman may appear
and be heard at such hearing and shall provide to the
court information to assist the court in its consideration
130
of the facts, circumstances, and conditions of the proposed
sale or lease of personally identifiable information under
section 363(b)(1)(B). Such information may include pres-
entation of—
‘‘(1) the debtor’s privacy policy;
‘‘(2) the potential losses or gains of privacy to
consumers if such sale or such lease is approved by
the court;
‘‘(3) the potential costs or benefits to con-
sumers if such sale or such lease is approved by the
court; and
‘‘(4) the potential alternatives that would miti-
gate potential privacy losses or potential costs to
consumers.
‘‘(c) A consumer privacy ombudsman shall not dis-
close any personally identifiable information obtained by
the ombudsman under this title.’’.
(b) COMPENSATION
OF CONSUMER PRIVACY OM-
BUDSMAN.—Section 330(a)(1) of title 11, United States
Code, is amended in the matter preceding subparagraph
(A), by inserting ‘‘a consumer privacy ombudsman ap-
pointed under section 332,’’ before ‘‘an examiner’’.
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subchapter II of chapter 3 of title 11, United
132
by section 106, is amended by inserting after the item re-
lating to section 111 the following:
‘‘112. Prohibition on disclosure of name of minor children.’’.
(c) CONFORMING AMENDMENT.—Section 107(a) of
title 11, United States Code, is amended by inserting ‘‘and
subject to section 112’’ after ‘‘section’’.
TITLE III —DISCOURAGING
BANKRUPTCY ABUSE
SEC. 301. TECHNICAL AMENDMENTS.
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:
133
‘‘(3) if a single or joint case is filed by or
against debtor who is an individual in a case 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 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) on the motion of a party in interest
for continuation of the automatic stay and upon
notice and a hearing, the court may extend the
stay in particular cases as to any or all credi-
tors (subject to such conditions or limitations
as the court may then impose) after notice and
a hearing completed before the expiration of the
30-day period only if the party in interest dem-
onstrates 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
134
(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 chapters 7, 11, and 13
in which the individual was a debtor
was pending within the preceding 1-
year period;
‘‘(II) a previous case under any
of chapters 7, 11, and 13 in which the
individual 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
135
‘‘(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
dismissal of the next most previous
case under chapter 7, 11, or 13 or
any other reason to conclude that the
later case will be concluded—
‘‘(aa) if a case under chap-
ter 7, with a discharge; or
‘‘(bb) if a case under chap-
ter 11 or 13, with a confirmed
plan that 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 a debtor who is an individual under this
136
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 sec-
tion 707(b), the stay under subsection (a) shall not
go into effect upon the filing of the later case; and
‘‘(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 limita-
tions as the court may impose), after notice and a
hearing, 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;
‘‘(C) a stay imposed under subparagraph (B)
shall be effective on the date of the entry of the
order allowing the stay to go into effect; and
‘‘(D) for purposes of subparagraph (B), a case
is presumptively filed not in good faith (but such
presumption may be rebutted by clear and con-
vincing evidence to the contrary)—
‘‘(i) as to all creditors if—
137
‘‘(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
dismissed within the time period stated in
this paragraph after the debtor failed to
file or amend the petition or other docu-
ments as required by this title or the court
without substantial excuse (but mere inad-
vertence or negligence shall not be sub-
stantial excuse unless the dismissal was
caused by the negligence of the debtor’s at-
torney), failed to provide adequate protec-
tion 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 substan-
tial change in the financial or personal af-
fairs 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 chapter 7, with a discharge,
138
and if a case under chapter 11 or 13, with
a confirmed plan that will be fully per-
formed; 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-
nating, conditioning, or limiting the stay as to
such 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
property, if the court finds that the filing of the pe-
tition was part of a scheme to delay, hinder, and de-
fraud creditors that involved either—
139
‘‘(A) transfer of all or part ownership of,
or other interest in, such real property without
the consent of the secured creditor or court ap-
proval; or
‘‘(B) multiple bankruptcy filings affecting
such real property.
If recorded in compliance with applicable State laws gov-
erning notices of interests or liens in real property, an
order entered under paragraph (4) shall be binding in any
other case under this title purporting to affect such real
property filed not later than 2 years after the date of the
entry of such order by the court, except that a debtor in
a subsequent case under this title 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, as amended by section 224, is amend-
ed by inserting after paragraph (19), the following:
‘‘(20) under subsection (a), of any act to en-
force any lien against or security interest in real
property following entry of the order under sub-
140
section (d)(4) as to such real property in any prior
case under this title, for a period of 2 years after
the date of the entry of such an order, except that
the debtor, in a subsequent case under this title,
may move 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 en-
force any lien against or security interest in real
property—
‘‘(A) if the debtor is ineligible under sec-
tion 109(g) to be a debtor in a case under this
title; or
‘‘(B) if the case under this title was filed
in violation of a bankruptcy court order in a
prior case under this title prohibiting the debtor
from being a debtor in another case under this
title;’’.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY
SECURITY.
Title 11, United States Code, is amended—
(1) in section 521(a), as so designated by sec-
tion 106—
(A) in paragraph (4), by striking ‘‘, and’’
at the end and inserting a semicolon;
141
(B) in paragraph (5), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) in a case under chapter 7 of this title in
which the debtor is an individual, not retain posses-
sion of personal property as to which a creditor has
an allowed claim for the purchase price secured in
whole or in part by an interest in such personal
property unless the debtor, not later than 45 days
after the first meeting of creditors under section
341(a), either—
‘‘(A) enters into an agreement with the
creditor pursuant to section 524(c) with respect
to the claim secured by such property; or
‘‘(B) redeems such property from the secu-
rity interest pursuant to section 722.
If the debtor fails to so act within the 45-day period re-
ferred to in paragraph (6), the stay under section 362(a)
is terminated with respect to the personal property of the
estate or of the debtor which is affected, such property
shall no longer be property of the estate, and the creditor
may take whatever action as to such property as is per-
mitted by applicable nonbankruptcy law, unless the court
determines on the motion of the trustee filed before the
expiration of such 45-day period, and after notice and a
142
hearing, that such property is of consequential value or
benefit to the estate, orders appropriate adequate protec-
tion of the creditor’s interest, and orders the debtor to
deliver any collateral in the debtor’s possession to the
trustee.’’; and
(2) in section 722, by inserting ‘‘in full at the
time of redemption’’ before the period at the end.
SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE
DEBTOR DOES NOT COMPLETE INTENDED
SURRENDER OF CONSUMER DEBT COLLAT-
ERAL.
Title 11, United States Code, is amended—
(1) in section 362, as amended by section
106—
(A) in subsection (c), by striking ‘‘(e), and
(f)’’ and inserting ‘‘(e), (f), and (h)’’;
(B) by redesignating subsection (h) as sub-
section (k) and transferring such subsection so
as to insert it after subjection (j) as added by
section 106; and
(C) by inserting after subsection (g) the
following:
‘‘(h)(1) In a case in which the debtor is an individual,
the stay provided by subsection (a) is terminated with re-
spect to personal property of the estate or of the debtor
143
securing in whole or in part a claim, or subject to an unex-
pired lease, and such personal property shall no longer be
property of the estate if the debtor fails within the applica-
ble time set by section 521(a)(2)—
‘‘(A) to file timely any statement of intention
required under section 521(a)(2) with respect to
such personal property or to indicate in such state-
ment that the debtor will either surrender such per-
sonal property or retain it and, if retaining such per-
sonal property, either redeem such personal property
pursuant to section 722, enter into an agreement of
the kind specified in section 524(c) applicable to the
debt secured by such personal property, or assume
such unexpired lease pursuant to section 365(p) if
the trustee does not do so, as applicable; and
‘‘(B) to take timely the action specified in such
statement, as it may be amended before expiration
of the period for taking action, unless such state-
ment specifies the debtor’s intention to reaffirm such
debt on the original contract terms and the creditor
refuses to agree to the reaffirmation on such terms.
‘‘(2) Paragraph (1) does not apply if the court deter-
mines, on the motion of the trustee filed before the expira-
tion of the applicable time set by section 521(a)(2), after
notice and a hearing, that such personal property is of
144
consequential value or benefit to the estate, and orders
appropriate adequate protection of the creditor’s interest,
and orders the debtor to deliver any collateral in the debt-
or’s possession to the trustee. If the court does not so de-
termine, the stay provided by subsection (a) shall termi-
nate upon the conclusion of the hearing on the motion.’’;
and
(2) in section 521, as amended by sections 106
and 225—
(A) in subsection (a)(2) by striking ‘‘con-
sumer’’;
(B) in subsection (a)(2)(B)—
(i) by striking ‘‘forty-five days after
the filing of a notice of intent under this
section’’ and inserting ‘‘30 days after the
first date set for the meeting of creditors
under section 341(a)’’; and
(ii) by striking ‘‘forty-five day’’ and
inserting ‘‘30-day’’;
(C) in subsection (a)(2)(C) by inserting ‘‘,
except as provided in section 362(h)’’ before the
semicolon; and
(D) by adding at the end the following:
‘‘(d) If the debtor fails timely to take the action speci-
fied in subsection (a)(6) of this section, or in paragraphs
145
(1) and (2) of section 362(h), with respect to property
which a lessor or bailor owns and has leased, rented, or
bailed to the debtor or as to which a creditor holds a secu-
rity interest not otherwise voidable under section 522(f),
544, 545, 547, 548, or 549, nothing in this title shall pre-
vent or limit the operation of a provision in the underlying
lease or agreement that has the effect of placing the debt-
or in default under such lease or agreement by reason of
the occurrence, pendency, or existence of a proceeding
under this title or the insolvency of the debtor. Nothing
in this subsection shall be deemed to justify limiting such
a provision in any other circumstance.’’.
SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT
IN CHAPTER 13.
(a) IN GENERAL.—Section 1325(a)(5)(B)(i) of title
11, United States Code, is amended to read as follows:
‘‘(i) the plan provides that—
‘‘(I) the holder of such claim retain
the lien securing such claim until the ear-
lier of—
‘‘(aa) the payment of the under-
lying debt determined under nonbank-
ruptcy law; or
‘‘(bb) discharge under section
1328; and
146
‘‘(II) if the case under this chapter is
dismissed or converted without completion
of the plan, such lien shall also be retained
by such holder to the extent recognized by
applicable nonbankruptcy law; and’’.
(b) RESTORING
THE FOUNDATION
FOR SECURED
CREDIT.—Section 1325(a) of title 11, United States Code,
is amended by adding at the end the following:
‘‘For purposes of paragraph (5), section 506 shall not
apply to a claim described in that paragraph if the creditor
has a purchase money security interest securing the debt
that is the subject of the claim, the debt was incurred
within the 910-day preceding the date of the filing of the
petition, and the collateral for that debt consists of a
motor vehicle (as defined in section 30102 of title 49) ac-
quired for the personal use of the debtor, or if collateral
for that debt consists of any other thing of value, if the
debt was incurred during the 1-year period preceding that
filing.’’.
(c) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (13) the fol-
lowing:
‘‘(13A) ‘debtor’s principal residence’—
147
‘‘(A) means a residential structure, includ-
ing incidental property, without regard to
whether that structure is attached to real prop-
erty; and
‘‘(B) includes an individual condominium
or cooperative unit, a mobile or manufactured
home, or trailer;’’; and
(2) by inserting after paragraph (27), the fol-
lowing:
‘‘(27A) ‘incidental property’ means, with re-
spect to a debtor’s principal residence—
‘‘(A) property commonly conveyed with a
principal residence in the area where the real
property is located;
‘‘(B) all easements, rights, appurtenances,
fixtures, rents, royalties, mineral rights, oil or
gas rights or profits, water rights, escrow
funds, or insurance proceeds; and
‘‘(C) all replacements or additions;’’.
SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.
Section 522(b)(3) of title 11, United States Code, as
so designated by section 106, is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘180 days’’ and inserting
‘‘730 days’’; and
148
(B) by striking ‘‘, or for a longer portion
of such 180-day period than in any other place’’
and inserting ‘‘or if the debtor’s domicile has
not been located at a single State for such 730-
day period, the place in which the debtor’s
domicile was located for 180 days immediately
preceding the 730-day period or for a longer
portion of such 180-day period than in any
other place’’; and
(2) by adding at the end the following:
‘‘If the effect of the domiciliary requirement under sub-
paragraph (A) is to render the debtor ineligible for any
exemption, the debtor may elect to exempt property that
is specified under subsection (d).’’.
SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR
FRAUD.
Section 522 of title 11, United States Code, as
amended by section 224, is amended—
(1) in subsection (b)(3)(A), as so designated by
this Act, by inserting ‘‘subject to subsections (o) and
(p),’’ before ‘‘any property’’; and
(2) by adding at the end the following:
‘‘(o) For purposes of subsection (b)(3)(A), and not-
withstanding subsection (a), the value of an interest in—
149
‘‘(1) real or personal property that the debtor
or a dependent of the debtor uses as a residence;
‘‘(2) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a resi-
dence;
‘‘(3) a burial plot for the debtor or a dependent
of the debtor; or
‘‘(4) real or personal property that the debtor
or a dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is attrib-
utable to any portion of any property that the debtor dis-
posed of in the 10-year period ending on the date of the
filing of the petition with the intent to hinder, delay, or
defraud a creditor and that the debtor could not exempt,
or that portion that the debtor could not exempt, under
subsection (b), if on such date the debtor had held the
property so disposed of.’’.
SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER
13 CASES.
(a) STOPPING ABUSIVE CONVERSIONS FROM CHAP-
TER 13.—Section 348(f)(1) of title 11, United States
Code, is amended—
(1) in subparagraph (A), by striking ‘‘and’’ at
the end;
(2) in subparagraph (B)—
150
(A) by striking ‘‘in the converted case,
with allowed secured claims’’ and inserting
‘‘only in a case converted to a case under chap-
ter 11 or 12, but not in a case converted to a
case under chapter 7, with allowed secured
claims in cases under chapters 11 and 12’’; and
(B) by striking the period and inserting ‘‘;
and’’; and
(3) by adding at the end the following:
‘‘(C) with respect to cases converted from chap-
ter 13—
‘‘(i) the claim of any creditor holding secu-
rity as of the date of the petition shall continue
to be secured by that security unless the full
amount of such claim determined under appli-
cable nonbankruptcy law has been paid in full
as of the date of conversion, notwithstanding
any valuation or determination of the amount
of an allowed secured claim made for the pur-
poses of the case under chapter 13; and
‘‘(ii) unless a prebankruptcy default has
been fully cured under the plan at the time of
conversion, in any proceeding under this title or
otherwise, the default shall have the effect given
under applicable nonbankruptcy law.’’.
151
(b) GIVING
DEBTORS
THE
ABILITY
TO
KEEP
LEASED PERSONAL PROPERTY BY ASSUMPTION.—Section
365 of title 11, United States Code, is amended by adding
at the end the following:
‘‘(p)(1) If a lease of personal property is rejected or
not timely assumed by the trustee under subsection (d),
the leased property is no longer property of the estate and
the stay under section 362(a) is automatically terminated.
‘‘(2)(A) If the debtor in a case under chapter 7 is
an individual, the debtor may notify the creditor in writing
that the debtor desires to assume the lease. Upon being
so notified, the creditor may, at its option, notify the debt-
or that it is willing to have the lease assumed by the debt-
or and may condition such assumption on cure of any out-
standing default on terms set by the contract.
‘‘(B) If, not later than 30 days after notice is pro-
vided under subparagraph (A), the debtor notifies the les-
sor in writing that the lease is assumed, the liability under
the lease will be assumed by the debtor and not by the
estate.
‘‘(C) The stay under section 362 and the injunction
under section 524(a)(2) shall not be violated by notifica-
tion of the debtor and negotiation of cure under this sub-
section.
152
‘‘(3) In a case under chapter 11 in which the debtor
is an individual and in a case under chapter 13, if the
debtor is the lessee with respect to personal property and
the lease is not assumed in the plan confirmed by the
court, the lease is deemed rejected as of the conclusion
of the hearing on confirmation. If the lease is rejected,
the stay under section 362 and any stay under section
1301 is automatically terminated with respect to the prop-
erty subject to the lease.’’.
(c) ADEQUATE PROTECTION OF LESSORS AND PUR-
CHASE MONEY SECURED CREDITORS.—
(1) 
CONFIRMATION
OF
PLAN.—Section
1325(a)(5)(B) of title 11, United States Code, as
amended by section 306, is amended—
(A) in clause (i), by striking ‘‘and’’ at the
end;
(B) in clause (ii), by striking ‘‘or’’ at the
end and inserting ‘‘and’’; and
(C) by adding at the end the following:
‘‘(iii) if—
‘‘(I) property to be distributed pursu-
ant to this subsection is in the form of
periodic payments, such payments shall be
in equal monthly amounts; and
153
‘‘(II) the holder of the claim is se-
cured by personal property, the amount of
such payments shall not be less than an
amount sufficient to provide to the holder
of such claim adequate protection during
the period of the plan; or’’.
(2) PAYMENTS.—Section 1326(a) of title 11,
United States Code, is amended to read as follows:
‘‘(a)(1) Unless the court orders otherwise, the debtor
shall commence making payments not later than 30 days
after the date of the filing of the plan or the order for
relief, whichever is earlier, in the amount—
‘‘(A) proposed by the plan to the trustee;
‘‘(B) scheduled in a lease of personal property
directly to the lessor for that portion of the obliga-
tion that becomes due after the order for relief, re-
ducing the payments under subparagraph (A) by the
amount so paid and providing the trustee with evi-
dence of such payment, including the amount and
date of payment; and
‘‘(C) that provides adequate protection directly
to a creditor holding an allowed claim secured by
personal property to the extent the claim is attrib-
utable to the purchase of such property by the debt-
or for that portion of the obligation that becomes
154
due after the order for relief, reducing the payments
under subparagraph (A) by the amount so paid and
providing the trustee with evidence of such payment,
including the amount and date of payment.
‘‘(2) A payment made under paragraph (1)(A) shall
be retained by the trustee until confirmation or denial of
confirmation. If a plan is confirmed, the trustee shall dis-
tribute any such payment in accordance with the plan as
soon as is practicable. If a plan is not confirmed, the trust-
ee shall return any such payments not previously paid and
not yet due and owing to creditors pursuant to paragraph
(3) to the debtor, after deducting any unpaid claim al-
lowed under section 503(b).
‘‘(3) Subject to section 363, the court may, upon no-
tice and a hearing, modify, increase, or reduce the pay-
ments required under this subsection pending confirma-
tion of a plan.
‘‘(4) Not later than 60 days after the date of filing
of a case under this chapter, a debtor retaining possession
of personal property subject to a lease or securing a claim
attributable in whole or in part to the purchase price of
such property shall provide the lessor or secured creditor
reasonable evidence of the maintenance of any required
insurance coverage with respect to the use or ownership
155
of such property and continue to do so for so long as the
debtor retains possession of such property.’’.
SEC. 310. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States Code,
is amended to read as follows:
‘‘(C)(i) for purposes of subparagraph
(A)—
‘‘(I) consumer debts owed to a single
creditor and aggregating more than $500
for luxury goods or services incurred by an
individual debtor on or within 90 days be-
fore the order for relief under this title are
presumed to be nondischargeable; and
‘‘(II) cash advances aggregating more
than $750 that are extensions of consumer
credit under an open end credit plan ob-
tained by an individual debtor on or within
70 days before the order for relief under
this title, are presumed to be non-
dischargeable; and
‘‘(ii) for purposes of this subparagraph—
‘‘(I) the terms ‘consumer’, ‘credit’,
and ‘open end credit plan’ have the same
meanings as in section 103 of the Truth in
Lending Act; and
156
‘‘(II) the term ‘luxury goods or serv-
ices’ does not include goods or services rea-
sonably necessary for the support or main-
tenance of the debtor or a dependent of the
debtor.’’.
SEC. 311. AUTOMATIC STAY.
(a) IN GENERAL.—Section 362(b) of title 11, United
States Code, as amended by sections 224 and 303, is
amended by inserting after paragraph (21), the following:
‘‘(22) subject to subsection (n), under sub-
section (a)(3), of the continuation of any eviction,
unlawful detainer action, or similar proceeding by a
lessor against a debtor involving residential property
in which the debtor resides as a tenant under a lease
or rental agreement and with respect to which the
lessor has obtained before the date of the filing of
the bankruptcy petition, a judgment for possession
of such property against the debtor;
‘‘(23) subject to subsection (o), under sub-
section (a)(3), of an eviction action that seeks pos-
session of the residential property in which the debt-
or resides as a tenant under a lease or rental agree-
ment based on endangerment of such property or
the illegal use of controlled substances on such prop-
erty, but only if the lessor files with the court, and
157
serves upon the debtor, a certification under penalty
of perjury that such an eviction action has been
filed, or that the debtor, during the 30-day period
preceding the date of the filing of the certification,
has endangered property or illegally used or allowed
to be used a controlled substance on the property;
‘‘(24) under subsection (a), of any transfer that
is not avoidable under section 544 and that is not
avoidable under section 549;’’.
(b) LIMITATIONS.—Section 362 of title 11, United
States Code, as amended by sections 106 and 305, is
amended by adding at the end the following:
‘‘(l)(1) Except as otherwise provided in this sub-
section, subsection (b)(22) shall apply on the date that
is 30 days after the date on which the bankruptcy petition
is filed, if the debtor files with the petition and serves upon
the lessor a certification under penalty of perjury that—
‘‘(A) under nonbankruptcy law applicable in the
jurisdiction, there are circumstances under which the
debtor would be permitted to cure the entire mone-
tary default that gave rise to the judgment for pos-
session, after that judgment for possession was en-
tered; and
‘‘(B) the debtor (or an adult dependent of the
debtor) has deposited with the clerk of the court,
158
any rent that would become due during the 30-day
period after the filing of the bankruptcy petition.
‘‘(2) If, within the 30-day period after the filing of
the bankruptcy petition, the debtor (or an adult dependent
of the debtor) complies with paragraph (1) and files with
the court and serves upon the lessor a further certification
under penalty of perjury that the debtor (or an adult de-
pendent of the debtor) has cured, under nonbankrupcty
law applicable in the jurisdiction, the entire monetary de-
fault that gave rise to the judgment under which posses-
sion is sought by the lessor, subsection (b)(22) shall not
apply, unless ordered to apply by the court under para-
graph (3).
‘‘(3)(A) If the lessor files an objection to any certifi-
cation filed by the debtor under paragraph (1) or (2), and
serves such objection upon the debtor, the court shall hold
a hearing within 10 days after the filing and service of
such objection to determine if the certification filed by the
debtor under paragraph (1) or (2) is true.
‘‘(B) If the court upholds the objection of the lessor
filed under subparagraph (A)—
‘‘(i) subsection (b)(22) shall apply immediately
and relief from the stay provided under subsection
(a)(3) shall not be required to enable the lessor to
159
complete the process to recover full possession of the
property; and
‘‘(ii) the clerk of the court shall immediately
serve upon the lessor and the debtor a certified copy
of the court’s order upholding the lessor’s objection.
‘‘(4) If a debtor, in accordance with paragraph (5),
indicates on the petition that there was a judgment for
possession of the residential rental property in which the
debtor resides and does not file a certification under para-
graph (1) or (2)—
‘‘(A) subsection (b)(22) shall apply immediately
upon failure to file such certification, and relief from
the stay provided under subsection (a)(3) shall not
be required to enable the lessor to complete the
process to recover full possession of the property;
and
‘‘(B) the clerk of the court shall immediately
serve upon the lessor and the debtor a certified copy
of the docket indicating the absence of a filed certifi-
cation and the applicability of the exception to the
stay under subsection (b)(22).
‘‘(5)(A) Where a judgment for possession of residen-
tial property in which the debtor resides as a tenant under
a lease or rental agreement has been obtained by the les-
sor, the debtor shall so indicate on the bankruptcy petition
160
and shall provide the name and address of the lessor that
obtained that pre-petition judgment on the petition and
on any certification filed under this subsection.
‘‘(B) The form of certification filed with the petition,
as specified in this subsection, shall provide for the debtor
to certify, and the debtor shall certify—
‘‘(i) whether a judgment for possession of resi-
dential rental housing in which the debtor resides
has been obtained against the debtor before the date
of the filing of the petition; and
‘‘(ii) whether the debtor is claiming under para-
graph (1) that under nonbankruptcy law applicable
in the jurisdiction, there are circumstances under
which the debtor would be permitted to cure the en-
tire monetary default that gave rise to the judgment
for possession, after that judgment of possession was
entered, and has made the appropriate deposit with
the court.
‘‘(C) The standard forms (electronic and otherwise)
used in a bankruptcy proceeding shall be amended to re-
flect the requirements of this subsection.
‘‘(D) The clerk of the court shall arrange for the
prompt transmittal of the rent deposited in accordance
with paragraph (1)(B) to the lessor.
161
‘‘(m)(1) Except as otherwise provided in this sub-
section, subsection (b)(23) shall apply on the date that
is 15 days after the date on which the lessor files and
serves a certification described in subsection (b)(23).
‘‘(2)(A) If the debtor files with the court an objection
to the truth or legal sufficiency of the certification de-
scribed in subsection (b)(23) and serves such objection
upon the lessor, subsection (b)(23) shall not apply, unless
ordered to apply by the court under this subsection.
‘‘(B) If the debtor files and serves the objection under
subparagraph (A), the court shall hold a hearing within
10 days after the filing and service of such objection to
determine if the situation giving rise to the lessor’s certifi-
cation under paragraph (1) existed or has been remedied.
‘‘(C) If the debtor can demonstrate to the satisfaction
of the court that the situation giving rise to the lessor’s
certification under paragraph (1) did not exist or has been
remedied, the stay provided under subsection (a)(3) shall
remain in effect until the termination of the stay under
this section.
‘‘(D) If the debtor cannot demonstrate to the satis-
faction of the court that the situation giving rise to the
lessor’s certification under paragraph (1) did not exist or
has been remedied—
162
‘‘(i) relief from the stay provided under sub-
section (a)(3) shall not be required to enable the les-
sor to proceed with the eviction; and
‘‘(ii) the clerk of the court shall immediately
serve upon the lessor and the debtor a certified copy
of the court’s order upholding the lessor’s certifi-
cation.
‘‘(3) If the debtor fails to file, within 15 days, an
objection under paragraph (2)(A)—
‘‘(A) subsection (b)(23) shall apply immediately
upon such failure and relief from the stay provided
under subsection (a)(3) shall not be required to en-
able the lessor to complete the process to recover full
possession of the property; and
‘‘(B) the clerk of the court shall immediately
serve upon the lessor and the debtor a certified copy
of the docket indicating such failure.’’.
SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY
DISCHARGES.
Title 11, United States Code, is amended—
(1) in section 727(a)(8), by striking ‘‘six’’ and
inserting ‘‘8’’; and
(2) in section 1328, by inserting after sub-
section (e) the following:
163
‘‘(f) Notwithstanding subsections (a) and (b), the
court shall not grant a discharge of all debts provided for
in the plan or disallowed under section 502, if the debtor
has received a discharge—
‘‘(1) in a case filed under chapter 7, 11, or 12
of this title during the 4-year period preceding the
date of the order for relief under this chapter, or
‘‘(2) in a case filed under chapter 13 of this
title during the 2-year period preceding the date of
such order.’’.
SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND AN-
TIQUES.
(a) DEFINITION.—Section 522(f) of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘(4)(A) Subject to subparagraph (B), for purposes
of paragraph (1)(B), the term ‘household goods’ means—
‘‘(i) clothing;
‘‘(ii) furniture;
‘‘(iii) appliances;
‘‘(iv) 1 radio;
‘‘(v) 1 television;
‘‘(vi) 1 VCR;
‘‘(vii) linens;
‘‘(viii) china;
164
‘‘(ix) crockery;
‘‘(x) kitchenware;
‘‘(xi) educational materials and educational
equipment primarily for the use of minor dependent
children of the debtor;
(xii) medical equipment and supplies;
‘‘(xiii) furniture exclusively for the use of minor
children, or elderly or disabled dependents of the
debtor;
‘‘(xiv) personal effects (including the toys and
hobby equipment of minor dependent children and
wedding rings) of the debtor and the dependents of
the debtor; and
‘‘(xv) 1 personal computer and related equip-
ment.
‘‘(B) The term ‘household goods’ does not include—
‘‘(i) works of art (unless by or of the debtor, or
any relative of the debtor);
‘‘(ii) electronic entertainment equipment with a
fair market value of more than $500 in the aggre-
gate (except 1 television, 1 radio, and 1 VCR);
‘‘(iii) items acquired as antiques with a fair
market value of more than $500 in the aggregate;
165
‘‘(iv) jewelry with a fair market value of more
than $500 in the aggregate (except wedding rings);
and
‘‘(v) a computer (except as otherwise provided
for in this section), motor vehicle (including a trac-
tor or lawn tractor), boat, or a motorized rec-
reational device, conveyance, vehicle, watercraft, or
aircraft.’’.
(b) STUDY.—Not later than 2 years after the date
of enactment of this Act, the Director of the Executive
Office for United States Trustees shall submit a report
to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of Representa-
tives containing its findings regarding utilization of the
definition of household goods, as defined in section
522(f)(4) of title 11, United States Code, as added by sub-
section (a), with respect to the avoidance of nonpossessory,
nonpurchase money security interests in household goods
under section 522(f)(1)(B) of title 11, United States Code,
and the impact such section 522(f)(4) has had on debtors
and on the bankruptcy courts. Such report may include
recommendations for amendments to such section
522(f)(4) consistent with the Director’s findings.