I
106TH CONGRESS
1ST SESSION
H. R. 833
To amend title 11 of the United States Code, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 24, 1999
Mr. GEKAS (for himself, Mr. BOUCHER, Mr. MCCOLLUM, Mr. MORAN of Vir-
ginia, Mr. ARMEY, Mr. FROST, Mr. MENENDEZ, Ms. PRYCE of Ohio,
Mrs. FOWLER, Mr. KENNEDY of Rhode Island, Mr. DREIER, Mr. CANADY
of Florida, Mr. GOODLATTE, Mr. CHABOT, Mr. BRYANT, Mr. ROTHMAN,
Mrs. BONO, Mr. ANDREWS, Mr. BAKER, Mr. BEREUTER, Mr.
CUNNINGHAM, Mr. DOOLEY of California, Ms. DUNN, Ms. HOOLEY of
Oregon, Mrs. KELLY, Mr. LARGENT, Mr. MALONEY of Connecticut, Mr.
RILEY, Mr. ROEMER, Mr. SESSIONS, Mr. SMITH of Washington, Mrs.
TAUSCHER, Ms. VELA´ZQUEZ, Mr. WYNN, Mr. DAVIS of Virginia, Mr.
DAVIS of Florida, and Mr. HALL of Texas) introduced the following bill;
which was referred to the Committee on the Judiciary, and in addition
to the Committee on Banking and Financial Services, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee con-
cerned
A BILL
To amend title 11 of the United States Code, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Bankruptcy Reform Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—CONSUMER BANKRUPTCY PROVISIONS
Subtitle A—Needs based bankruptcy
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
Sec. 103. Notice of alternatives.
Sec. 104. Debtor financial management training test program.
Subtitle B—Consumer Bankruptcy Protections
Sec. 105. Definitions.
Sec. 106. Disclosures.
Sec. 107. Debtor’s bill of rights.
Sec. 108. Enforcement.
Sec. 109. Sense of the congress.
Sec. 110. Discouraging abuse reaffirmation practices.
Sec. 111. Promotion alternative dispute resolution.
Sec. 112. Enhanced disclosure for credit extensions secured by a dwelling.
Sec. 113. Dual use debit card.
Sec. 114. Enhanced disclosures under an open-end credit plan.
Sec. 115. Protection of savings earmarked for the postsecondary education of
children.
Sec. 116. Effect of discharge.
Sec. 117. Automatic stay.
Sec. 118. Reinforce the fresh start.
Sec. 119. Discouraging bad faith repeat filings.
Sec. 120. Curbing abusive filings.
Sec. 121. Debtor retention of personal property security.
Sec. 122. Relief from the automatic stay when the debtor does not complete in-
tended surrender of consumer debt collateral.
Sec. 123. Giving secured creditors fair treatment in chapter 13.
Sec. 124. Restraining abusive purchases on secured credit.
Sec. 125. Fair valuation of collateral.
Sec. 126. Exemptions.
Sec. 127. Limitation.
Sec. 128. Rolling stock equipment.
Sec. 129. Discharge under chapter 13.
Sec. 130. Bankruptcy judgeships.
Sec. 131. Additional amendments to title 11, United States Code.
Sec. 132. Amendment to section 1325 of title 11, United States Code.
Sec. 133. Application of the codebtor stay only when the stay protects the
debtor.
Sec. 134. Adequate protection for investors.
Sec. 135. Limitation on luxury goods.
Sec. 136. Giving debtors the ability to keep leased personal property by as-
sumption.
Sec. 137. Adequate protection of lessors and purchase money secured creditors.
Sec. 139. Automatic stay.
Sec. 140. Extend period between bankruptcy discharges.
Sec. 141. Definition of domestic support obligation.
Sec. 142. Priorities for claims for domestic support obligations.
Sec. 143. Requirements to obtain confirmation and discharge in cases involving
domestic support obligations.
Sec. 144. Exceptions to automatic stay in domestic support obligation proceed-
ings.
Sec. 145. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 146. Continued liability of property.
Sec. 147. Protection of domestic support claims against preferential transfer
motions.
Sec. 148. Definition of household goods and antiques.
Sec. 149. Nondischargeable debts.
TITLE II—DISCOURAGING BANKRUPTCY ABUSE
Sec. 201. Reenactment of chapter 12.
Sec. 202. Meetings of creditors and equity security holders.
Sec. 203. Protection of retirement savings in bankruptcy.
Sec. 204. Protection of refinance of security interest.
Sec. 205. Executory contracts and unexpired leases.
Sec. 206. Creditors and equity security holders committees.
Sec. 207. Amendment to section 546 of title 11, United States Code.
Sec. 208. Limitation.
Sec. 209. Amendment to section 330(a) of title 11, United States Code.
Sec. 210. Postpetition disclosure and solicitation.
Sec. 211. Preferences.
Sec. 212. Venue of certain proceedings.
Sec. 213. Period for filing plan under chapter 11.
Sec. 214. Fees arising from certain ownership interests.
Sec. 215. Claims relating to insurance deposits in cases ancillary to foreign pro-
ceedings.
Sec. 216. Defaults based on nonmonetary obligations.
TITLE III—GENERAL BUSINESS BANKRUPTCY PROVISIONS
Sec. 301. Definition of disinterested person.
Sec. 302. Miscellaneous improvements.
TITLE IV—SMALL BUSINESS BANKRUPTCY PROVISIONS
Sec. 401. Flexible rules for disclosure Statement and plan.
Sec. 402. Definitions.
Sec. 403. Standard form disclosure Statement and plan.
Sec. 404. Uniform national reporting requirements.
Sec. 405. Uniform reporting rules and forms for small business cases.
Sec. 406. Duties in small business cases.
Sec. 407. Plan filing and confirmation deadlines.
Sec. 408. Plan confirmation deadline.
Sec. 409. Prohibition against extension of time.
Sec. 410. Duties of the United States trustee.
Sec. 411. Scheduling conferences.
Sec. 412. Serial filer provisions.
Sec. 413. Expanded grounds for dismissal or conversion and appointment of
trustee.
Sec. 414. Study of operation of title 11 of the United States Code with respect
to small businesses.
Sec. 415. Payment of interest.
TITLE V—MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI—STREAMLINING THE BANKRUPTCY SYSTEM
Sec. 601. Creditor representation at first meeting of creditors.
Sec. 602. Audit procedures.
Sec. 603. Giving creditors fair notice in chapter 7 and 13 cases.
Sec. 604. Dismissal for failure to timely file schedules or provide required infor-
mation.
Sec. 605. Adequate time to prepare for hearing on confirmation of the plan.
Sec. 606. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 607. Sense of the Congress regarding expansion of rule 9011 of the Fed-
eral rules of bankruptcy procedure.
Sec. 608. Elimination of certain fees payable in chapter 11 bankruptcy cases.
Sec. 609. Study of bankruptcy impact of credit extended to dependent students.
Sec. 610. Prompt relief from stay in individual cases.
Sec. 611. Stopping abusive conversions from chapter 13.
TITLE VII—BANKRUPTCY DATA
Sec. 701. Improved bankruptcy statistics.
Sec. 702. Uniform rules for the collection of bankruptcy data.
Sec. 703. Sense of the Congress regarding availability of bankruptcy data.
TITLE VIII—BANKRUPTCY TAX PROVISIONS
Sec. 801. Treatment of certain liens.
Sec. 802. Effective notice to government.
Sec. 803. Notice of request for a determination of taxes.
Sec. 804. Rate of interest on tax claims.
Sec. 805. Tolling of priority of tax claim time periods.
Sec. 806. Priority property taxes incurred.
Sec. 807. Chapter 13 discharge of fraudulent and other taxes.
Sec. 808. Chapter 11 discharge of fraudulent taxes.
Sec. 809. Stay of tax proceedings.
Sec. 810. Periodic payment of taxes in chapter 11 cases.
Sec. 811. Avoidance of statutory tax liens prohibited.
Sec. 812. Payment of taxes in the conduct of business.
Sec. 813. Tardily filed priority tax claims.
Sec. 814. Income tax returns prepared by tax authorities.
Sec. 815. Discharge of the estate’s liability for unpaid taxes.
Sec. 816. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 817. Standards for tax disclosure.
Sec. 818. Setoff of tax refunds.
TITLE IX—ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 901. Amendment to add chapter 15 to title 11, United States Code.
Sec. 902. Amendments to other chapters in title 11, United States Code.
TITLE X—FINANCIAL CONTRACT PROVISIONS
Sec. 1001. Treatment of certain agreements by conservators or receivers of in-
sured depository institutions.
Sec. 1002. Authority of the corporation with respect to failed and failing insti-
tutions.
Sec. 1003. Amendments relating to transfers of qualified financial contracts.
Sec. 1004. Amendments relating to disaffirmance or repudiation of qualified fi-
nancial contracts.
Sec. 1005. Clarifying amendment relating to master agreements.
Sec. 1006. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 1007. Bankruptcy code amendments.
Sec. 1008. Recordkeeping requirements.
Sec. 1009. Exemptions from contemporaneous execution requirement.
Sec. 1010. Damage measure.
Sec. 1011. SIPC stay.
Sec. 1012. Asset-backed securitizations.
Sec. 1013. Federal reserve collateral requirements.
Sec. 1014. Severability; effective date; application of amendments.
TITLE XI—TECHNICAL CORRECTIONS
Sec. 1101. Definitions.
Sec. 1102. Adjustment of dollar amounts.
Sec. 1103. Extension of time.
Sec. 1104. Technical amendments.
Sec. 1105. Penalty for persons who negligently or fraudulently prepare bank-
ruptcy petitions.
Sec. 1106. Limitation on compensation of professional persons.
Sec. 1107. Special tax provisions.
Sec. 1108. Effect of conversion.
Sec. 1109. Amendment to table of sections.
Sec. 1110. Allowance of administrative expenses.
Sec. 1111. Priorities.
Sec. 1112. Exemptions.
Sec. 1113. Exceptions to discharge.
Sec. 1114. Effect of discharge.
Sec. 1115. Protection against discriminatory treatment.
Sec. 1116. Property of the estate.
Sec. 1117. Preferences.
Sec. 1118. Postpetition transactions.
Sec. 1119. Disposition of property of the estate.
Sec. 1120. General provisions.
Sec. 1121. Appointment of elected trustee.
Sec. 1122. Abandonment of railroad line.
Sec. 1123. Contents of plan.
Sec. 1124. Discharge under chapter 12.
Sec. 1125. Bankruptcy cases and proceedings.
Sec. 1126. Knowing disregard of bankruptcy law or rule.
Sec. 1127. Transfers made by nonprofit charitable corporations.
Sec. 1128. Prohibition on certain actions for failure to incur finance charges.
Sec. 1129. Protection of valid purchase money security interests.
Sec. 1130. Trustees.
TITLE XII—GENERAL EFFECTIVE DATE; APPLICATION OF
AMENDMENTS
Sec. 1201. Effective date; application of amendments.
TITLE I—CONSUMER
BANKRUPTCY PROVISIONS
Subtitle A—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 13’’;
and
(2) in subsection (b)—
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(B) in paragraph (1), as redesignated by
subparagraph (A) of this paragraph—
(i) in the first sentence—
(I) by striking ‘‘but not at the re-
quest or suggestion’’ and inserting ‘‘,
panel trustee or’’;
(II) by inserting ‘‘, or, with the
debtor’s consent, convert such a case
to a case under chapter 13 of this
title,’’ after ‘‘consumer debts’’; and
(III) by striking ‘‘substantial
abuse’’ and inserting ‘‘abuse’’; and
(ii) by striking the last sentence and
inserting the following:
‘‘(2)(A)(i) In considering under paragraph (1) wheth-
er the granting of relief would be an abuse of the provi-
sions of this chapter, the court shall presume abuse exists
if the debtor’s current monthly income less amounts set
forth in clauses (ii), (iii), and (iv), and multiplied by 60
months is not less than 25 percent of the debtor’s non-
priority unsecured claims in the case or $5,000, whichever
is less.
‘‘(ii) The debtor’s monthly expenses shall be the ap-
plicable monthly expenses under National Standards,
Local Standards, and Other Necessary Expenses allow-
ance (excluding payments for debts) issued by the Internal
Revenue Service for the area in which the debtor resides,
as in effect on the date of the entry of the order for relief,
for the debtor, the dependents of the debtor, and the
spouse of the debtor in a joint case, if the spouse is not
otherwise a dependent.
‘‘(iii) The debtor’s average monthly payments on ac-
count of secured debts shall be calculated as the total of
all amounts scheduled as contractually due to secured
creditors in each month of the 60 months following the
date of the petition, and dividing that total by 60 months.
‘‘(iv) The debtor’s expenses for payment of all prior-
ity claims (including priority child support and alimony
claims), which shall be calculated as the total amount of
debts entitled to priority, and dividing the total by 60
months.
‘‘(B) In any proceeding brought under this sub-
section, the presumption of abuse may be rebutted only
by demonstrating extraordinary circumstances that re-
quire additional expenses or adjustment of current month-
ly total income. In order to establish extraordinary cir-
cumstances, the debtor must itemize each additional ex-
pense or adjustment of income and provide documentation
for such expenses and a detailed explanation of the ex-
traordinary circumstances which make such expenses nec-
essary and reasonable. The debtor, and the attorney for
the debtor if the debtor has an attorney, shall attest under
oath to the accuracy of any information provided to dem-
onstrate that additional expenses or adjustment to income
are required. The presumption of abuse may be rebutted
only if such additional expenses or adjustments to income
cause the debtor’s current monthly income less the
amounts set forth in clauses (ii), (iii), and (iv) of subpara-
graph (A) when multiplied by 60 to be less than 25 per-
cent of the debtor’s nonpriority unsecured claims $5,000,
whichever is less.
‘‘(C) As part of the schedule of current income and
expenditures required under section 521 of this title, the
debtor shall include a statement of the debtor’s current
monthly income, and the calculations which determine
whether a presumption arises under subparagraph (A)(i),
showing how each amount is calculated. The bankruptcy
rules promulgated under section 2075 of title 28, United
States Code, shall prescribe a form for such statement and
may provide general rules on its content.
‘‘(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) does not apply or has been rebutted, the
court shall consider—
‘‘(A) whether the debtor filed the petition in
bad faith; or
‘‘(B) the totality of the circumstances (includ-
ing whether the debtor seeks to reject a personal
services contract and the financial need for such re-
jection as sought by the debtor) of the debtor’s fi-
nancial situation demonstrates abuse.’’.
(b) DEFINITION.—Title 11, United States Code, is
amended—
(1) in section 101 by inserting after paragraph
(10) the following:
‘‘(10A) ‘currently monthly income’ means the
average monthly income from all sources derived
which the debtor, or in a joint case, the debtor and
the debtor’s spouse, receive without regard to wheth-
er it is taxable income, in the 180 days preceding
the date of determination, and includes any amount
paid by anyone other than the debtor or, in a joint
case, the debtor and the debtor’s spouse, on a regu-
lar basis to the household expenses of the debtor or
the debtor’s dependents and, in a joint case, the
debtor’s spouse if not otherwise a dependent;’’; and
(2) in section 704—
(i) in paragraph (8) by striking ‘‘and’’ at
the end;
(ii) in paragraph (9) by striking the period
at the end and inserting ‘‘; and’’; and
(iii) by adding at the end the following:
‘‘(10) With respect to an individual debtor under this
chapter, the panel trustee or bankruptcy administrator
shall review all materials filed by the debtor and, 10 days
prior to the first meeting of creditors, file with the court
a statement as to whether the debtor’s case would be pre-
sumed to be an abuse under section 707(b) of this title,
and the court shall provide a copy of such statement to
all creditors within 5 days. If, based on the filing of such
statement with the court, the panel trustee or bankruptcy
administrator determines that the debtor’s case should be
presumed to be an abuse under section 707(b) of this title
and the debtor’s current monthly income, when multiplied
by 12, is not less than the highest national median family
income reported for a family of equal or lesser size, or
in the case of a household of 1 person, the national median
household income for 1 earner, the panel trustee or bank-
ruptcy administrator shall within 30 days file a motion
to dismiss or convert under section 707(b) of this title,
or file a statement setting forth the reasons the trustee
does not believe that such a motion would be appropriate.
‘‘(3)(A) If a panel trustee appointed under section
586(a)(1) of title 28 brings a motion for dismissal or con-
version under this subsection and the court grants that
motion and finds that the action of the counsel for the
debtor in filing under this chapter was not substantially
justified, the court shall order the counsel for the debtor
to reimburse the trustee for all reasonable costs in pros-
ecuting the motion, including reasonable attorneys’ fees.
‘‘(B) If the court finds that the attorney for the debt-
or violated Rule 9011, at a minimum, the court shall
order—
‘‘(i) the assessment of an appropriate civil pen-
alty against the counsel for the debtor; and
‘‘(ii) the payment of the civil penalty to the
panel trustee or the United States trustee.
‘‘(C) In the case of a petition referred to in subpara-
graph (B), the signature of an attorney shall constitute
a certificate that the attorney has—
‘‘(i) performed a reasonable investigation into
the circumstances that gave rise to the petition; and
‘‘(ii) determined that the petition—
‘‘(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) of this
subsection.
‘‘(4)(A) Except as provided in subparagraph (B), the
court may award a debtor all reasonable costs in contest-
ing a motion brought by a party in interest (other than
a panel trustee or United States trustee) under this sub-
section (including reasonable attorneys’ fees) if—
‘‘(i) the court does not grant the motion; and
‘‘(ii) the court finds that—
‘‘(I) the position of the party that brought
the motion was not substantially justified; or
‘‘(II) the party brought the motion solely
for the purpose of coercing a debtor into
waiving a right guaranteed to the debtor under
this title.
‘‘(B) A party in interest that has a claim of an aggre-
gate amount less than $1,000 shall not be subject to sub-
paragraph (A).
‘‘(5) However, only the judge, United States trustee,
bankruptcy administrator or panel trustee may bring a
motion under this section if the debtor and the debtor’s
spouse combined, as of the date of the order for relief,
have current monthly total income equal to or less than
the national median household monthly income calculated
on a monthly basis for a household of equal size. However,
for a household of more than 4 individuals, the median
income shall be that of a household of 4 individuals plus
$583 for each additional member of that household.’’.
(c) CLERICAL AMENDMENT.—The table of sections
at the beginning of 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 13.’’.
SEC. 103. 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, that individual shall be given or obtain (as required
in section 521(a)(1), as part of the certification process
under subchapter 1 of chapter 5) a written notice pre-
scribed by the United States trustee for the district in
which the petition is filed pursuant to section 586 of title
28. The notice shall contain the following:
‘‘(1) A brief description of chapters 7, 11, 12,
and 13 and the general purpose, benefits, and costs
of proceeding under each of those chapters.
‘‘(2) A brief description of services that may be
available to that individual from a credit counseling
service that is approved by the United States trustee
for that district.’’.
SEC. 104. DEBTOR FINANCIAL MANAGEMENT TRAINING
TEST PROGRAM.
(a) DEVELOPMENT
OF FINANCIAL MANAGEMENT
AND TRAINING CURRICULUM AND MATERIALS.—The Di-
rector of the Executive Office for United States Trustees
(in this section referred to as the ‘‘Director’’) shall consult
with a wide range of individuals who are experts in the
field of debtor education, including trustees who are ap-
pointed under chapter 13 of title 11 of the United States
Code and who operate financial management education
programs for debtors, and shall develop a financial man-
agement training curriculum and materials that can be
used to educate individual debtors on how to better man-
age their finances.
(b) TEST—(1) The Director shall select 3 judicial dis-
tricts of the United States in which to test the effective-
ness of the financial management training curriculum and
materials developed under subsection (a).
(2) For a 1-year period beginning not later than 270
days after the date of the enactment of this Act, such cur-
riculum and materials shall be made available by the Di-
rector, directly or indirectly, on request to individual debt-
ors in cases filed in such 1-year period under chapter 7
or 13 of title 11 of the United States Code.
(c) EVALUATION.—(1) During the 1-year period re-
ferred to in subsection (b), the Director shall evaluate the
effectiveness of—
(A) the financial management training curricu-
lum and materials developed under subsection (a);
and
(B) a sample of existing consumer education
programs such as those described in the Report of
the National Bankruptcy Review Commission (Octo-
ber 20, 1997) that are representative of consumer
education programs carried out by the credit indus-
try, by trustees serving under chapter 13 of title 11
of the United States Code, and by consumer coun-
selling groups.
(2) Not later than 3 months after concluding such
evaluation, the Director shall submit a report to the
Speaker of the House of Representatives and the Presi-
dent pro tempore of the Senate, for referral to the appro-
priate committees of the Congress, containing the findings
of the Director regarding the effectiveness of such curricu-
lum, such materials, and such programs.
Subtitle B—Consumer Bankruptcy
Protections
SEC. 105. DEFINITIONS.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (3) the follow-
ing:
‘‘(3A) ‘assisted person’ means any person whose
debts consist primarily of consumer debts and whose
non-exempt assets are less than $150,000;’’;
(2) by inserting after paragraph (4) the follow-
ing:
‘‘(4A) ‘bankruptcy assistance’ means any goods
or services sold or otherwise provided to an assisted
person with the express or implied purpose of pro-
viding information, advice, counsel, document prepa-
ration or filing, or attendance at a creditors’ meeting
or appearing in a proceeding on behalf of another or
providing legal representation with respect to a pro-
ceeding under this title;’’; and
(3) by inserting after paragraph (12A) the fol-
lowing:
‘‘(12B) ‘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 pursuant to section 110 of this
title, but does not include any person that is any of
the following or an officer, director, employee or
agent thereof—
‘‘(A) any nonprofit organization which is
exempt from taxation under section 501(c)(3)
of the Internal Revenue Code of 1986;
‘‘(B) any creditor of the person to the ex-
tent the creditor is assisting the person to re-
structure any debt owed by the person to the
creditor; or
‘‘(C) any depository institution (as defined
in section 3 of the Federal Deposit Insurance
Act) or any Federal credit union or State credit
union (as those terms are defined in section
101 of the Federal Credit Union Act), or any
affiliate or subsidiary of such a depository insti-
tution or credit union;’’.
(b) 
CONFORMING
AMENDMENT.—In 
section
104(b)(1) by inserting ‘‘101(3),’’ after ‘‘sections’’.
SEC. 106. DISCLOSURES.
(a) DISCLOSURES.—Subchapter II of chapter 5 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘§ 526. Disclosures
‘‘(a) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide the following no-
tices to the assisted person:
‘‘(1) the written notice required under section
342(b)(1) of this title; and
‘‘(2) to the extent not covered in the written no-
tice described in paragraph (1) of this section and
no later than three 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 advis-
ing assisted persons of the following—
‘‘(A) all information the assisted person is
required to provide with a petition and there-
after during a case under this title must be
complete, accurate and truthful;
‘‘(B) all assets and all liabilities must be
completely and accurately disclosed in the docu-
ments filed to commence the case, and the re-
placement value of each asset as defined in sec-
tion 506 of this title must be stated in those
documents where requested after reasonable in-
quiry to establish such value;
‘‘(C) current monthly total income, pro-
jected monthly net income and, in a chapter 13
case, monthly net income must be stated after
reasonable inquiry; and
‘‘(D) that information an assisted person
provides during their case may be audited pur-
suant to this title and that failure to provide
such information may result in dismissal of the
proceeding under this title or other sanction in-
cluding, in some instances, criminal sanctions.
‘‘(b) A debt relief agency providing bankruptcy assist-
ance to an assisted person shall provide each assisted per-
son at the same time as the notices required under sub-
section (a)(1) with the following statement, to the extent
applicable, or one substantially similar. The statement
shall be clear and conspicuous and shall be in a single
document separate from other documents or notices pro-
vided to the assisted person:
‘‘ ‘IMPORTANT INFORMATION ABOUT BANK-
RUPTCY ASSISTANCE SERVICES FROM AN AT-
TORNEY OR BANKRUPTCY PETITION PREPARER
‘‘ ‘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 made available by the Bankruptcy Code and
which form of relief is most likely to be beneficial for you.
Be sure you understand the relief you can obtain and its
limitations. To file a bankruptcy case, documents called
a Petition, Schedules and Statement of Financial Affairs,
as well as in some cases a Statement of Intention need
to be 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 and a creditor is not permitted
to coerce you into reaffirming your debts.
‘‘ ‘If you choose to file a chapter 13 case in which
you repay your creditors what you can afford over three
to five years, you may also want help with preparing your
chapter 13 plan and with the confirmation hearing on your
plan which will be before a bankruptcy judge.
‘‘ ‘If you select another type of relief under the Bank-
ruptcy Code other than chapter 7 or chapter 13, you will
want to find out what needs to be done from someone fa-
miliar with that type of relief.
‘‘ ‘Your bankruptcy case may also involve litigation.
You are generally permitted to represent yourself in litiga-
tion in bankruptcy court, but only attorneys, not bank-
ruptcy petition preparers, can give you legal advice.’.
‘‘(c) Except to the extent the debt relief agency 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 may be provided
orally or in a clear and conspicuous writing) to the as-
sisted person on how to provide all the information the
assisted person is required to provide under this title pur-
suant to section 521, including—
‘‘(1) how to value assets at replacement value,
determine current monthly total income, projected
monthly income and, in a chapter 13 case, net
monthly income, and related calculations;
‘‘(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 of this title.
‘‘(d) A debt relief agency shall maintain a copy of
the notices required under subsection (a) of this section
for two years after the later of the date on which the no-
tice is given the assisted person.’’.
(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. Disclosures.’’.
SEC. 107. DEBTOR’S BILL OF RIGHTS.
(a) DEBTOR’S BILL OF RIGHTS.—Subchapter II of
chapter 5 of title 11, United States Code, as amended by
section 106, is amended by adding at the end the follow-
ing:
‘‘§ 527. Debtor’s bill of rights
‘‘(a) A debt relief agency shall—
‘‘(1) no later than five business days after the
first date on which a debt relief agency provides any
bankruptcy assistance services to an assisted person,
but prior to such assisted person’s petition under
this title being filed, execute a written contract with
the assisted person specifying clearly and conspicu-
ously the services the agency will provide the as-
sisted person and the basis on which fees or charges
will be made for such services and the terms of pay-
ment, and give the assisted person a copy of the
fully executed and completed contract in a form the
person can keep;
‘‘(2) disclose in any advertisement of bank-
ruptcy assistance services or of the benefits of bank-
ruptcy directed to the general public (whether in
general media, seminars or specific mailings, tele-
phonic or electronic messages or otherwise) that the
services or benefits are with respect to proceedings
under this title, clearly and conspicuously using the
following statement: ‘We are a debt relief agency.
We help people file Bankruptcy petitions to obtain
relief under the Bankruptcy Code.’ or a substantially
similar statement. An advertisement shall be of
bankruptcy assistance services if it describes or of-
fers bankruptcy assistance with a chapter 13 plan,
regardless of whether chapter 13 is specifically men-
tioned, including such statements as ‘federally super-
vised repayment plan’ or ‘Federal debt restructuring
help’ or other similar statements which would lead
a reasonable consumer to believe that help with
debts was being offered when in fact in most cases
the help available is bankruptcy assistance with a
chapter 13 plan; and
‘‘(3) if an advertisement directed to the general
public indicates that the debt relief agency provides
assistance with respect to credit defaults, mortgage
foreclosures, lease eviction proceedings, excessive
debt, debt collection pressure, or inability to pay any
consumer debt, disclose conspicuously in that adver-
tisement that the assistance is with respect to or
may involve proceedings under this title, using the
following statement: ‘We are a debt relief agency.
We help people file Bankruptcy petitions to obtain
relief under the Bankruptcy Code.’ or a substantially
similar statement.
‘‘(b) A debt relief agency shall not—
‘‘(1) fail to perform any service which the debt
relief agency has told the assisted person or prospec-
tive assisted person the agency would provide that
person in connection with the preparation for or ac-
tivities during a proceeding under this title;
‘‘(2) make any statement, or counsel or advise
any assisted person to make any statement in any
document filed in a proceeding under this title,
which is untrue and misleading or which upon the
exercise of reasonable care, should be known by the
debt relief 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, what services
the debt relief agency can reasonably expect to pro-
vide that person, or the benefits an assisted person
may obtain or the difficulties the person may experi-
ence if the person seeks relief in a proceeding pursu-
ant to this title; or
‘‘(4) advise an assisted person or prospective
assisted person to incur more debt in contemplation
of that person filing a proceeding under this title or
in order 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 pro-
ceeding under this title.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by section 106, is amended by inserting after the
item relating to section 526, the following:
‘‘527. Debtor’s bill of rights.’’.
SEC. 108. ENFORCEMENT.
(a) ENFORCEMENT.—Subchapter II of chapter 5 of
title 11, United States Code, as amended by sections 106
and 107, is amended by adding at the end the following:
‘‘§ 528. Debt relief agency enforcement
‘‘(a) ASSISTED PERSON WAIVERS INVALID.—Any
waiver by any assisted person of any protection or right
provided by or under section 526 or 527 of this title shall
be void and may not be enforced by any Federal or State
court or any other person.
‘‘(b) NONCOMPLIANCE.—
‘‘(1) Any contract between a debt relief agency
and an assisted person for bankruptcy assistance
which does not comply with the material require-
ments of section 526 or 527 of this title shall be
treated as void and may not be enforced by any Fed-
eral or State court or by any other person.
‘‘(2) Any debt relief agency which has been
found, after notice and hearing, to have—
‘‘(A) negligently failed to comply with any
provision of section 526 or 527 with respect to
a bankruptcy case or related proceeding of an
assisted person;
‘‘(B) provided bankruptcy assistance to an
assisted person in a case or related proceeding
which is dismissed or converted because the
debt relief agency’s negligent failure to file
bankruptcy papers, including papers specified in
section 521 of this title; or
‘‘(C) 
negligently 
or 
intentionally 
dis-
regarded the material requirements of this title
or the Federal Rules of Bankruptcy Procedure
applicable to such debt relief agency shall be
liable to the assisted person in the amount of
any fees and charges in connection with provid-
ing bankruptcy assistance to such person which
the debt relief agency has already been paid on
account of that proceeding.
‘‘(3) In addition to such other remedies as are
provided under State law, whenever the chief law en-
forcement 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 section 526 or 527
of this title, the State—
‘‘(A) may bring an action to enjoin such
violation;
‘‘(B) may bring an action on behalf of its
residents to recover the actual damages of as-
sisted persons arising from such violation, in-
cluding any liability under paragraph (2); and
‘‘(C) in the case of any successful action
under subparagraph (A) or (B), shall be award-
ed the costs of the action and reasonable attor-
ney fees as determined by the court.
‘‘(4) The United States District Court for any
district located in the State shall have concurrent ju-
risdiction of any action under subparagraph (A) or
(B) of paragraph (3).
‘‘(5) Notwithstanding any other provision of
Federal law, if the court, on its own motion or on
the motion of the United States trustee, finds that
a person intentionally violated section 526 or 527 of
this title, or engaged in a clear and consistent pat-
tern or practice of violating section 526 or 527 of
this title, the court may—
‘‘(A) enjoin the violation of such section; or
‘‘(B) impose an appropriate civil penalty
against such person.
‘‘(c) RELATION TO STATE LAW.—This section and
sections 526 and 527 shall not annul, alter, affect or ex-
empt any person subject to those 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.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 5 of title 11, United States Code, as
amended by sections 106 and 107, is amended by inserting
after the item relating to section 527, the following:
‘‘528. Debt relief agency enforcement.’’.
SEC. 109. SENSE OF THE CONGRESS.
It is the sense of the Congress that States should de-
velop curricula relating to the subject of personal finance,
designed for use in elementary and secondary schools.
SEC. 110. DISCOURAGING ABUSE REAFFIRMATION PRAC-
TICES.
Section 524(c)(2) of title 11, United States Code, is
amended—
(1) in subparagraph (A) by striking ‘‘and’’ at
the end;
(2) in subparagraph (B) by adding ‘‘and’’ at
the end; and
(3) by adding at the end the following:
‘‘(C) if the consideration for such agreement is
based on a wholly unsecured consumer debt, such
agreement contains a clear and conspicuous state-
ment which advises the debtor—
‘‘(i) that the debtor is entitled to a hearing
before the court at which the debtor shall ap-
pear in person and at which the court will de-
cide whether the agreement is an undue hard-
ship, not in the debtor’s best interest, and not
the result of a threat by the creditor to take
any action that cannot be legally taken or that
is not intended to be taken; and
‘‘(ii) that if the debtor is represented by
counsel, the debtor may waive the debtor’s right
to such a hearing by signing a statement
waiving the hearing, stating that the debtor is
represented by counsel, and identifying such
counsel;’’;
(3) in subsection (6)(A)—
(A) by striking ‘‘and’’ at the end of clause
(i);
(B) by striking the period at the end of
clause (ii) and inserting ‘‘; and’’;
(C) by adding at the end thereof the fol-
lowing:
‘‘(iii) not entered into by the debtor as the
result of a threat by the creditor to take any
action that cannot be legally taken or that is
not intended to be taken.’’; and
(4) in the 3d sentence of subsection (d)—
(A) by striking ‘‘of this section’’ and in-
serting a comma; and
(B) by inserting after ‘‘such agreement’’
the following:
‘‘or if the consideration for such agreement is based on
a wholly unsecured consumer debt (except for debts owed
to creditors defined in section 461(b)(10(A)(iv) of title 12,
United States Code) and the debtor has not waived the
debtor’s right to a hearing on the agreement in accordance
with subsection (c)(2)(C) of this section’’.
SEC. 111. PROMOTION ALTERNATIVE DISPUTE RESOLU-
TION.
(a) REDUCTION OF CLAIM.—Section 502 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(k)(1) The court, on the motion of the debtor and
after a hearing, may reduce a claim filed under this sec-
tion based in whole on unsecured consumer debts by not
more than 20 percent, if the debtor can prove by clear
and convincing evidence that the claim was filed by a cred-
itor who unreasonably refused to negotiate a reasonable
alternative repayment schedule proposed by an approved
credit counseling agency acting on behalf of the debtor,
if—
‘‘(A) such offer was made at least 60 days be-
fore the filing of the petition;
‘‘(B) such offer provided for payment of at least
60 percent of the amount of the debtor 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 that
the proposed alternative repayment schedule was made in
the 60-day period specified in subparagraph (A) and that
the creditor unreasonably refused to consider the debtor’s
proposal.’’.
(b) LIMITATION ON AVOIDABILITY.—Section 547 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(h) The trustee may not avoid a transfer if such
transfer was made as a part of an alternative repayment
plan between the debtor and any creditor of the debtor
created by an approved credit counseling agency.’’.
SEC. 112. ENHANCED DISCLOSURE FOR CREDIT EXTEN-
SIONS SECURED BY A DWELLING.
(a) STUDY REQUIRED.—During the period beginning
180 days after the date of enactment of this Act and end-
ing 18 months after the date of the enactment, the Board
of Governors of the Federal Reserve System (in this sec-
tion referred to as the ‘‘Board’’) shall conduct a study and
submit to Congress a report (including recommendations
for any appropriate legislation) regarding—
(1) whether a consumer engaging in an open-
end credit transaction (as defined pursuant to sec-
tion 103 of the Truth in lending Act) secured by the
consumer’s principal dwelling is provided adequate
information under Federal law, including under sec-
tion 127A of the Truth in Lending Act, regarding
the tax deductibility of interest paid on such trans-
action; and
(2) whether a consumer engaging in a closed-
end credit transaction (as defined pursuant to sec-
tion 103 of the Truth in Lending Act) secured by
the consumer’s principal dwelling is provided ade-
quate information regarding the tax deductibility of
interest paid on such transaction.
In conducting such study, the Board shall specifically con-
sider whether additional disclosures are necessary with re-
spect to such open-end or closed-end credit transactions
in which the amount of the credit extended exceeds the
fair market value of the dwelling.
(b) REGULATIONS.—If the Board determines that ad-
ditional disclosures are necessary in connection with trans-
actions described in subsection (a), the Board, pursuant
to its authority under the Truth in Lending Act, may pro-
mulgate regulations that would require such additional
disclosures. Any such regulations promulgated by the
Board under this section shall not take effect before the
end of the 36-month period after the date of the enact-
ment of this Act.
SEC. 113. DUAL USE DEBIT CARD.
(a) STUDY REQUIRED.—The Board of Governors of
the Federal Reserve System (in this section referred to
as the ‘‘Board’’) shall conduct a study of existing protec-
tions provided to consumers to limit their liability for un-
authorized use or a debit card or similar access device.
(b) SPECIFIC CONSIDERATIONS.—In conducting the
study required by subsection (a), the Board shall specifi-
cally consider the following—
(1) the extent to which existing provisions of
section 909 of the Electronic Fund Transfer Act and
the Board’s implementing regulations provide ade-
quate unauthorized use liability protection for con-
sumers;
(2) the extent to which any voluntary industry
rules have enhanced the level of protection afforded
consumers in connection with such unauthorized use
liability; and
(3) whether amendments to the Electronic
Funds Transfer Act or the Board’s implementing
regulations thereto are necessary to provide ade-
quate protection for consumers in this area.
(c) REPORT AND REGULATIONS.—Not later than 2
years after the date of the enactment of this Act, the
Board shall make public a report on its findings with re-
spect to the adequacy of existing protections afforded con-
sumers with respect to unauthorized-use liability for debit
cards and similar access devices. If the Board determines
that such protections are inadequate, the Board, pursuant
to its authority under the Electronic Funds Transfer Act,
may issue regulations to address such inadequacy. Any
regulations issued by the Board shall not be effective be-
fore 36 months after the date of the enactment of this
Act.
SEC. 114. ENHANCED DISCLOSURES UNDER AN OPEN-END
CREDIT PLAN.
(a) INITIAL AND ANNUAL MINIMUM PAYMENT DIS-
CLOSURE.—Section 127(a) of the Truth in Lending Act
(15 U.S.C. 1637(a)) is amended by adding at the end the
following:
‘‘(9) In the case of any credit or charge card
account under an open-end consumer credit plan on
which a minimum monthly or periodic payment will
be required, other than an account described in
paragraph (8)—
‘‘(A) the following statement: ‘The mini-
mum payment amount shown on your billing
statement is the smallest payment which you
can make in order to keep the account in good
standing. This payment option is offered as a
convenience and you may make larger payments
at any time. Making only the minimum pay-
ment each month will increase the amount of
interest you pay and the length of time it takes
to repay your outstanding balance.’;
‘‘(B) if the plan provides that the con-
sumer will be permitted to forgo making a mini-
mum payment during a specified billing cycle, a
statement, if applicable, that if the consumer
chooses to forgo making the minimum payment,
finance charges will continue to accrue; and
‘‘(C) an example, based on an annual per-
centage rate and method for determining mini-
mum periodic payments recently in effect for
that creditor, and a $500 outstanding balance,
showing the estimated minimum periodic pay-
ment, and the estimated period of time it would
take to repay the $500 outstanding balance if
the consumer paid only the minimum periodic
payment on each monthly or periodic statement
and obtained no additional extensions of credit.
‘‘(10) With respect to one billing cycle per cal-
endar year, the creditor shall transmit the informa-
tion required under paragraph (9) to each consumer
to whom the creditor is required to transit a state-
ment pursuant to subsection (b) for such billing
cycle. The creditor shall also transmit to such con-
sumer for such cycle a worksheet prescribed by the
Board to assist the consumer in determining the
consumer’s household income and debt obligations.’’.
(b) PERIOD MINIMUM PAYMENT DISCLOSURES.—
Section 127(b) of the Truth in Lending Act (15 U.S.C.
1637(b)) is amended by adding at the end the following:
‘‘(11) The following statement: ‘The minimum
payment amount shown on your billing statement is
the smallest payment which you can make in order
to keep the account in good standing. This payment
option is offered as a convenience and you may
make larger payments at any time. Making only the
minimum payment each month will increase the
amount of interest you pay and the length of time
it takes to repay your outstanding balance.’ ’’.
(c) ENFORCEMENT.—Section 127 of the Truth in
Lending Act (15 U.S.C. 1637) is amended by adding at
the end the following:
‘‘(h) In promulgating regulations to implement the
disclosure of an example required under subsection
(a)(9)(C) and (a)(10), the Board shall set forth a model
disclosure to accompany the example stating that the cred-
it features shown are only an example which does not obli-
gate the creditor, but is intended to illustrate the approxi-
mate length of time it could take to repay using the as-
sumptions set forth in subsection (a)(9)(C) without regard
to any other factors that could impact an approximate re-
payment period, including other credit features or the con-
sumer’s payment or other behavior with respect to the ac-
count. Compliance with the disclosures required under
subsection (a)(9)(C) and (a)(10) shall be enforced exclu-
sively by the Federal agencies set forth in section 108.’’.
(d) REGULATORY IMPLEMENTATION.—The Board of
Governors of the Federal Reserve System (in this section
referred to as the ‘‘Board’’) shall promulgate regulations
implementing the amendments made by subsections (a)
and (b). Such regulations shall take effect no earlier than
the end of the 36-month period beginning on the date of
the enactment of this Act.
(e) STUDY REQUIRED.—The Board shall conduct a
study to determine whether consumers have adequate in-
formation about borrowing activities which may result in
financial problems. In studying this issue, the Board shall
consider the extent to which—
(1) consumers, in establishing new credit ar-
rangements, are aware of their existing payment ob-
ligations, the need to consider those obligations in
deciding to take on new credit, and how taking on
excessive credit can result in financial difficulty;
(2) minimum periodic payment features offered
in connection with open-end credit plans impact con-
sumer default rates;
(3) consumers always make only the minimum
payment throughout the life of the plan;
(4) consumers are aware that making only min-
imum payments will increase the cost and repayment
period of an open-end loan; and
(5) the availability of low minimum payment
options is a cause of consumers experiencing finan-
cial difficulty.
(f) REPORT TO CONGRESS.—Before the end of the
2-year period beginning on the date of the enactment of
this Act, the Board shall submit to Congress a report con-
taining the findings of the Board in connection with the
study required under subsection (b).
(g) REGULATIONS.—The Board shall, by regulation
promulgated pursuant to its authority under the Truth in
Lending Act, require additional disclosures to consumers
regarding minimum payment features, including periodic
statement disclosures, if the Board determines that such
disclosures are necessary based on its findings. Any such
regulations promulgated by the Board shall not take effect
earlier than January 1, 2001.
SEC. 115. PROTECTION OF SAVINGS EARMARKED FOR THE
POSTSECONDARY EDUCATION OF CHILDREN.
(a) IN GENERAL.—Section 522(b) of title 11, United
States Code, as amended by section 330, is amended—
(1) in paragraph (2)—
(A) in subparagraph (B), by striking
‘‘and’’ at the end;
(B) in subparagraph (C), by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(D) postsecondary education accounts as de-
scribed as follows:
‘‘(i) except as provided under applicable
State law or except as provided in paragraph
(5), any funds placed in a qualified tuition pro-
gram (as described in section 529(b) of the In-
ternal Revenue Code of 1986) at least 365 days
before the date of entry of the order for relief
and which has not been pledged or promised to
any person in connection with any extension of
credit; or
‘‘(ii) except as provided in paragraph (5),
any funds placed in an education individual re-
tirement 
account 
(as 
defined 
in 
section
530(b)(1) of the Internal Revenue Code of
1986) at least 365 days before the date of entry
of the order for relief and which has not been
pledged or promised to any person in connec-
tion with any extension of credit;’’; and
(4) by adding at the end the following:
‘‘(5) For purposes of paragraph (3)(D), funds placed
in a qualified tuition program or in an education individ-
ual retirement account shall not be exempt under this
subsection—
‘‘(A) unless the debtor has one or more depend-
ent children less than 22 years of age;
‘‘(B) if the amounts in such postsecondary ac-
counts do not exceed the lesser of $50,000 (in the
aggregate) in accounts attributable to each such de-
pendent child or $100,000 (in the aggregate) attrib-
utable to all such dependent children;
‘‘(C) to the extent such funds contributed to
such account exceed $500 per year per child; and
‘‘(D) any individual (other than the dependent
child of the debtor to whom such account is attrib-
utable) has any ownership right to such funds, or
the right to obtain ownership in the future of any
amount of such funds (other than upon the death or
serious mental impairment of such child), or direct
the application of such funds for any purpose other
than the postsecondary education of such child.’’.
SEC. 116. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(i) The willful failure of a creditor to credit pay-
ments received under a plan confirmed under this title (in-
cluding a plan of reorganization confirmed under chapter
11 of this title) in the manner required by the plan (in-
cluding crediting the amounts required under the plan)
shall constitute a violation of an injunction under sub-
section (a)(2).
‘‘(j)(1) An individual who is injured by the failure of
a creditor to comply with the requirements for a reaffirma-
tion agreement under subsections (c) and (d), or by any
willful violation of the injunction under subsection (a)(2),
shall be entitled to recover—
‘‘(A) the greater of—
‘‘(i) the amount of actual damages; or
‘‘(ii) $1,000; and
‘‘(B) costs and attorneys’ fees.
‘‘(2) An action to recover for a violation specified in
paragraph (1) may not be brought as a class action.’’.
SEC. 117. AUTOMATIC STAY.
Section 362(h) of title 11, United States Code, is
amended to read as follows:
‘‘(h)(1) An individual who is injured by any willful
violation of a stay provided in this section shall be entitled
to recover—
‘‘(A) actual damages; and
‘‘(B) reasonable costs, including attorneys’ fees.
‘‘(2) An action to recover for a violation specified in
paragraph (1) may not be brought as a class action.’’.
SEC. 118. REINFORCE THE FRESH START.
(a) RESTORATION OF AN EFFECTIVE DISCHARGE.—
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. 119. 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 new
paragraphs:
‘‘(3) If a single or joint case is filed by or
against an individual debtor under chapter 7, 11, or
13, and if a single or joint case of the debtor was
pending within the previous 1-year period but was
dismissed, other than a case refiled under a chapter
other than chapter 7 after dismissal under section
707(b) of this title, the stay under subsection (a)
with respect to any action taken with respect to a
debt or property securing such debt or with respect
to any lease will terminate with respect to the debtor
on the 30th day after the filing of the later case.
Upon motion by a party in interest for continuation
of the automatic stay and upon notice and a hear-
ing, the court may extend the stay in particular
cases as to any or all creditors (subject to such con-
ditions or limitations as the court may then impose)
after notice and a hearing completed before the expi-
ration of the 30-day period only if the party in inter-
est demonstrates that the filing of the later case is
in good faith as to the creditors to be stayed. A case
is presumptively filed not in good faith (but such
presumption may be rebutted by clear and convinc-
ing evidence to the contrary)—
‘‘(A) as to all creditors if—
‘‘(i) more than 1 previous case under
any of chapters 7, 11, or 13 in which the
individual was a debtor was pending within
such 1-year period;
‘‘(ii) a previous case under any of
chapters 7, 11, or 13 in which the individ-
ual was a debtor was dismissed within
such 1-year period, after the debtor failed
to file or amend the petition or other docu-
ments as required by this title or the court
‘‘(4) If a single or joint case is filed by or
against an individual debtor under this title, and if
2 or more single or joint cases of the debtor were
pending within the previous year but were dismissed,
other than a case refiled under section 707(b) of this
title, the stay under subsection (a) will not go into
effect upon the filing of the later case. On request
of a party in interest, the court shall promptly enter
an order confirming that no stay is in effect. If a
party in interest requests within 30 days of the fil-
ing of the later case, the court may order the stay
to take effect in the case as to any or all creditors
(subject to such conditions or limitations as the
court may impose), after notice and hearing, only if
the party in interest demonstrates that the filing of
the later case is in good faith as to the creditors
to be stayed. A stay imposed pursuant to the preced-
ing sentence will be effective on the date of entry
of the order allowing the stay to go into effect. A
case is presumptively not filed in good faith (but
such presumption may be rebutted by clear and con-
vincing evidence to the contrary)—
‘‘(A) as to all creditors if—
‘‘(i) 2 or more previous cases under
this title in which the individual was a
debtor were pending within the 1-year pe-
riod;
‘‘(ii) a previous case under this title in
which the individual was a debtor was dis-
missed 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 pay adequate protection
as ordered by the court, or failed to per-
form the terms of a plan confirmed by the
court; or
‘‘(iii) there has not been a substantial
change in the financial or personal affairs
of the debtor since the dismissal of the
next most previous case under this title, or
any other reason to conclude that the later
case will not be concluded, if a case under
chapter 7, with a discharge, and if a case
under chapter 11 or 13, with a confirmed
plan that will be fully performed; or
‘‘(B) 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
action of such creditor.’’.
SEC. 120. CURBING ABUSIVE FILINGS.
(a) IN GENERAL.—Section 362(d) of title 11, United
States Code, is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the
end;
(2) in paragraph (3), by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(4) with respect to a stay of an act against
real property under subsection (a), by a creditor
whose claim is secured by an interest in such real
estate, if the court finds that the filing of the bank-
ruptcy petition was part of a scheme to delay,
hinder, and defraud creditors that involved either—
‘‘(A) transfer of all or part ownership of,
or other interest in, the real property without
the consent of the secured creditor or court ap-
proval; or
‘‘(B) multiple bankruptcy filings affecting
the real property.
If recorded in compliance with applicable State laws gov-
erning notices of interests or liens in real property, an
order entered pursuant to this subsection shall be binding
in any other case under this title purporting to affect the
real property filed not later than 2 years after that record-
ing, except that a debtor in a subsequent case may move
for relief from such order based upon changed cir-
cumstances or for good cause shown, after notice and a
hearing.’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, is amended—
(1) in paragraph (17), by striking ‘‘or’’ at the
end;
(2) in paragraph (18) by striking the period at
the end; and
(3) by inserting after paragraph (18) the fol-
lowing:
‘‘(19) under subsection (a), of any act to en-
force any lien against or security interest in real
property following the entry of an order under sec-
tion 362(d)(4) of this title as to that property in any
prior bankruptcy case for a period of 2 years after
entry of such an order. The debtor in a subsequent
case, however, may move the court for relief from
such order based upon changed circumstances or for
other good cause shown, after notice and a hearing;
or
‘‘(20) 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) of this title to be a debtor in a
bankruptcy case; or
‘‘(B) if the bankruptcy case was filed in
violation of a bankruptcy court order in a prior
bankruptcy case prohibiting the debtor from
being a debtor in another bankruptcy case.’’.
SEC. 121. DEBTOR RETENTION OF PERSONAL PROPERTY
SECURITY.
Title 11, United States Code, is amended—
(1) in section 521—
(A) in paragraph (4) by striking ‘‘and’’ at
the end;
(B) in paragraph (5) by striking the period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(6) in an individual case under chapter 7 of
this title, not retain possession of personal property
as to which a creditor has an allowed claim for the
purchase price secured in whole or in part by an in-
terest in that personal property unless, in the case
of an individual debtor, the debtor takes 1 of the fol-
lowing actions within 45 days after the first meeting
of creditors under section 341(a)—
‘‘(A) enters into an agreement with the
creditor pursuant to section 524(c) of this title
with respect to the claim secured by such prop-
erty; or
‘‘(B) redeems such property from the secu-
rity interest pursuant to section 722 of this
title.
‘‘If the debtor fails to so act within the 45-day pe-
riod, the personal property affected shall no longer
be property of the estate, and the creditor may take
whatever action as to such property as is permitted
by applicable nonbankruptcy law, unless the court
determines on the motion of the trustee, and after
notice and a hearing, that such property is of con-
sequential value or benefit to the estate.’’; and
(2) in section 722 by inserting ‘‘in full at the
time of redemption’’ before the period at the end.
SEC. 122. 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 as
follows—
(1) in section 362—
(A) by striking ‘‘(e), and (f)’’ in subsection
(c) and inserting in lieu thereof ‘‘(e), (f), and
(h)’’; and
(B) by redesignating subsection (h), as
amended by section 117, as subsection (i) and
by inserting after subsection (g) the following:
‘‘(h) In an individual case pursuant to chapter 7, 11,
or 13 the stay provided by subsection (a) is terminated
with respect to property of the estate securing in whole
or in part a claim, or subject to an unexpired lease, if
the debtor fails within the applicable time set by section
521(a)(2) of this title—
‘‘(1) to file timely any statement of intention
required under section 521(a)(2) of this title with
respect to that property or to indicate therein that
the debtor will either surrender the property or re-
tain it and, if retaining it, either redeem the prop-
erty pursuant to section 722 of this title, reaffirm
the debt it secures pursuant to section 524(c) of this
title, or assume the unexpired lease pursuant to sec-
tion 365(p) of this title if the trustee does not do
so, as applicable; or
‘‘(2) to take timely the action specified in that
statement of intention, as it may be amended before
expiration of the period for taking action, unless the
statement of intention specifies reaffirmation and
the creditor refuses to reaffirm on the original con-
tract terms;
unless the court determines on the motion of the trustee,
and after notice and a hearing, that such property is of
consequential value or benefit to the estate.’’; and
(2) in section 521, as amended by sections 121
and 604—
(A) in paragraph (2) by striking ‘‘con-
sumer’’;
(B) in paragraph (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) of this title’’; and
(ii) by striking ‘‘forty-five day’’ the
second place it appears and inserting ‘‘30-
day’’;
(C) in paragraph (2)(C) by inserting ‘‘ex-
cept as provided in section 362(h) of this title’’
before the semicolon; and
(D) by adding at the end the following:
‘‘(c) If the debtor fails timely to take the action speci-
fied in subsection (a)(6) of this section, or in paragraphs
(1) and (2) of section 362(h) of this title, 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 security interest not otherwise voidable under sec-
tion 522(f), 544, 545, 547, 548, or 549 of this title, noth-
ing in this title shall prevent or limit the operation of a
provision in the underlying lease or agreement which has
the effect of placing the debtor 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 cir-
cumstance.’’.
SEC. 123. GIVING SECURED CREDITORS FAIR TREATMENT
IN CHAPTER 13.
Section 1325(a)(5)(B)(i) of title 11, United States
Code, is amended to read as follows:
‘‘(i) the plan provides that the holder of
such claim retain the lien securing such claim
until the earlier of payment of the underlying
debt determined under nonbankruptcy law or
discharge under section 1328 of this title, and
that 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 nonbank-
ruptcy law; and’’.
SEC. 124. RESTRAINING ABUSIVE PURCHASES ON SECURED
CREDIT.
Section 506 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) In an individual case under chapter 7, 11, 12,
or 13—
‘‘(1) subsection (a) shall not apply to an al-
lowed claim to the extent attributable in whole or in
part to the purchase price of personal property ac-
quired by the debtor within 5 years of the filing of
the petition, except for the purpose of applying para-
graph (3) of this subsection;
‘‘(2) if such allowed claim attributable to the
purchase price is secured only by the personal prop-
erty so acquired, the value of the personal property
and the amount of the allowed secured claim shall
be the sum of the unpaid principal balance of the
purchase price and accrued and unpaid interest and
charges at the contract rate;
‘‘(3) if such allowed claim attributable to the
purchase price is secured by the personal property so
acquired and other property, the value of the secu-
rity may be determined under subsection (a), but the
value of the security and the amount of the allowed
secured claim shall be not less than the unpaid prin-
cipal balance of the purchase price of the personal
property acquired and unpaid interest and charges
at the contract rate; and
‘‘(4) in any subsequent case under this title
that is filed by or against the debtor in the 2-year
period beginning on the date the petition is filed in
the original case, the value of the personal property
and the amount of the allowed secured claim shall
be deemed to be not less than the amount provided
under paragraphs (2) and (3).’’.
SEC. 125. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code, is
amended by adding at the end the following:
‘‘In the case of an individual debtor under chapters 7 and
13, such value with respect to personal property securing
an allowed claim shall be determined based on the replace-
ment value of such property as of the date of filing the
petition without deduction for costs of sale or marketing.
With respect to property acquired for personal, family, or
household purpose, replacement value shall mean the price
a retail merchant would charge for property of that kind
considering the age and condition of the property at the
time value is determined.’’.
SEC. 126. EXEMPTIONS.
Section 522(b)(2)(A) of title 11, United States Code,
is amended—
(1) by striking ‘‘180’’ and inserting ‘‘730’’; and
(2) by striking ‘‘, or for a longer portion of
such 180-day period than in any other place’’.
SEC. 127. LIMITATION.
Section 522 of title 11, United States Code, is
amended—
(1) in subsection (b)(2)(A) by inserting ‘‘sub-
ject to subsection (n),’’ before ‘‘any property’’; and
(2) by adding at the end the following:
‘‘(n) For purposes of subsection (b)(2)(A) and not-
withstanding subsection (a), the value of an interest in—
‘‘(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; or
‘‘(3) a burial plot for the debtor or a dependent
of the debtor;
shall be reduced to the extent such value is attributable
to any portion of any property that the debtor disposed
of in the 730-day period ending of 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. 128. ROLLING STOCK EQUIPMENT.
(a) IN GENERAL.—Section 1168 of title 11, United
States Code, is amended to read as follows:
‘‘§ 1168. Rolling stock equipment
‘‘(a)(1) The right of a secured party with a security
interest in or of a lessor or conditional vendor of equip-
ment described in paragraph (2) to take possession of such
equipment in compliance with an equipment security
agreement, lease, or conditional sale contract, and to en-
force any of its other rights or remedies under such secu-
rity agreement, lease, or conditional sale contract, to sell,
lease, or otherwise retain or dispose of such equipment,
is not limited or otherwise affected by any other provision
of this title or by any power of the court, except that the
right to take possession and enforce those other rights and
remedies shall be subject to section 362 of this title, if—
‘‘(A) before the date that is 60 days after the
date of commencement of a case under this chapter,
the trustee, subject to the court’s approval, agrees to
perform all obligations of the debtor under such se-
curity agreement, lease, or conditional sale contract;
and
‘‘(B) any default, other than a default of a kind
described in section 365(b)(2) of this title, under
such security agreement, lease, or conditional sale
contract—
‘‘(i) that occurs before the date of com-
mencement of the case and is an event of de-
fault therewith is cured before the expiration of
such 60-day period;
‘‘(ii) that occurs or becomes an event of
default after the date of commencement of the
case and before the expiration of such 60-day
period is cured before the later of—
‘‘(I) the date that is 30 days after the
date of the default or event of the default;
or
‘‘(II) the expiration of such 60-day
period; and
‘‘(iii) that occurs on or after the expiration
of such 60-day period is cured in accordance
with the terms of such security agreement,
lease, or conditional sale contract, if cure is per-
mitted under that agreement, lease, or condi-
tional sale contract.
‘‘(2) The equipment described in this paragraph—
‘‘(A) is rolling stock equipment or accessories
used on rolling stock equipment, including super-
structures or racks, that is subject to a security in-
terest granted by, leased to, or conditionally sold to
a debtor; and
‘‘(B) includes all records and documents relat-
ing to such equipment that are required, under the
terms of the security agreement, lease, or conditional
sale contract, that is to be surrendered or returned
by the debtor in connection with the surrender or re-
turn of such equipment.
‘‘(3) Paragraph (1) applies to a secured party, lessor,
or conditional vendor acting in its own behalf or acting
as trustee or otherwise in behalf of another party.
‘‘(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is pro-
tected under subsection (a) may agree, subject to the
court’s approval, to extend the 60-day period specified in
subsection (a)(1).
‘‘(c)(1) In any case under this chapter, the trustee
shall immediately surrender and return to a secured party,
lessor, or conditional vendor, described in subsection
(a)(1), equipment described in subsection (a)(2), if at any
time after the date of commencement of the case under
this chapter such secured party, lessor, or conditional ven-
dor is entitled pursuant to subsection (a)(1) to take pos-
session of such equipment and makes a written demand
for such possession of the trustee.
‘‘(2) At such time as the trustee is required under
paragraph (1) to surrender and return equipment de-
scribed in subsection (a)(2), any lease of such equipment,
and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or
conditional sale contract is an executory contract, shall be
deemed rejected.
‘‘(d) With respect to equipment first placed in service
on or prior to October 22, 1994, for purposes of this
section—
‘‘(1) the term ‘lease’ includes any written agree-
ment with respect to which the lessor and the debt-
or, as lessee, have expressed in the agreement or in
a substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal in-
come tax purposes; and
‘‘(2) the term ‘security interest’ means a pur-
chase-money equipment security interest.
‘‘(e) With respect to equipment first placed in service
after October 22, 1994, for purposes of this section, the
term ‘rolling stock equipment’ includes rolling stock equip-
ment that is substantially rebuilt and accessories used on
such equipment.’’.
(b) AIRCRAFT EQUIPMENT AND VESSELS.—Section
1110 of title 11, United States Code, is amended to read
as follows:
‘‘§ 1110. Aircraft equipment and vessels
‘‘(a)(1) Except as provided in paragraph (2) and sub-
ject to subsection (b), the right of a secured party with
a security interest in equipment described in paragraph
(3), or of a lessor or conditional vendor of such equipment,
to take possession of such equipment in compliance with
a security agreement, lease, or conditional sale contract,
and to enforce any of its other rights or remedies, under
such security agreement, lease, or conditional sale con-
tract, to sell, lease, or otherwise retain or dispose of such
equipment, is not limited or otherwise affected by any
other provision of this title or by any power of the court.
‘‘(2) The right to take possession and to enforce the
other rights and remedies described in paragraph (1) shall
be subject to section 362 of this title if—
‘‘(A) before the date that is 60 days after the
date of the order for relief under this chapter, the
trustee, subject to the approval of the court, agrees
to perform all obligations of the debtor under such
security agreement, lease, or conditional sale con-
tract; and
‘‘(B) any default, other than a default of a kind
specified in section 365(b)(2) of this title, under
such security agreement, lease, or conditional sale
contract—
‘‘(i) that occurs before the date of the
order is cured before the expiration of such 60-
day period;
‘‘(ii) that occurs after the date of the order
and before the expiration of such 60-day period
is cured before the later of—
‘‘(I) the date that is 30 days after the
date of the default; or
‘‘(II) the expiration of such 60-day
period; and
‘‘(iii) that occurs on or after the expiration
of such 60-day period is cured in compliance
with the terms of such security agreement,
lease, or conditional sale contract, if a cure is
permitted under that agreement, lease, or con-
tract.
‘‘(3) The equipment described in this paragraph—
‘‘(A) is—
‘‘(i) an aircraft, aircraft engine, propeller,
appliance, or spare part (as defined in section
40102 of title 49) that is subject to a security
interest granted by, leased to, or conditionally
sold to a debtor that, at the time such trans-
action is entered into, holds an air carrier oper-
ating certificate issued pursuant to chapter 447
of title 49 for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of
cargo; or
‘‘(ii) a documented vessel (as defined in
section 30101(1) of title 46) that is subject to
a security interest granted by, leased to, or con-
ditionally sold to a debtor that is a water car-
rier that, at the time such transaction is en-
tered into, holds a certificate of public conven-
ience and necessity or permit issued by the De-
partment of Transportation; and
‘‘(B) includes all records and documents relat-
ing to such equipment that are required, under the
terms of the security agreement, lease, or conditional
sale contract, to be surrendered or returned by the
debtor in connection with the surrender or return of
such equipment.
‘‘(4) Paragraph (1) applies to a secured party, lessor,
or conditional vendor acting in its own behalf or acting
as trustee or otherwise in behalf of another party.
‘‘(b) The trustee and the secured party, lessor, or
conditional vendor whose right to take possession is pro-
tected under subsection (a) may agree, subject to the ap-
proval of the court, to extend the 60-day period specified
in subsection (a)(1).
‘‘(c)(1) In any case under this chapter, the trustee
shall immediately surrender and return to a secured party,
lessor, or conditional vendor, described in subsection
(a)(1), equipment described in subsection (a)(3), if at any
time after the date of the order for relief under this chap-
ter such secured party, lessor, or conditional vendor is en-
titled pursuant to subsection (a)(1) to take possession of
such equipment and makes a written demand for such pos-
session to the trustee.
‘‘(2) At such time as the trustee is required under
paragraph (1) to surrender and return equipment de-
scribed in subsection (a)(3), any lease of such equipment,
and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or
conditional sale contract is an executory contract, shall be
deemed rejected.
‘‘(d) With respect to equipment first placed in service
on or before October 22, 1994, for purposes of this
section—
‘‘(1) the term ‘lease’ includes any written agree-
ment with respect to which the lessor and the debt-
or, as lessee, have expressed in the agreement or in
a substantially contemporaneous writing that the
agreement is to be treated as a lease for Federal in-
come tax purposes; and
‘‘(2) the term ‘security interest’ means a pur-
chase-money equipment security interest.’’.
SEC. 129. DISCHARGE UNDER CHAPTER 13.
Section 1328(a) of title 11, United States Code, is
amended by striking paragraphs (1) through (3) and in-
serting the following:
‘‘(1) provided for under section 1322(b)(5) of
this title;
‘‘(2) of the kind specified in paragraph (2), (4),
(3)(B), (5), (8), or (9) of section 523(a) of this title;
‘‘(3) for restitution, or a criminal fine, included
in a sentence on the debtor’s conviction of a crime;
or
‘‘(4) for restitution, or damages, awarded in a
civil action against the debtor as a result of willful
or malicious injury by the debtor that caused per-
sonal injury to an individual or the death of an indi-
vidual.’’.
SEC. 130. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE.—This section may be cited as the
‘‘Bankruptcy Judgeship Act of 1999’’.
(b) TEMPORARY JUDGESHIPS.—
(1) APPOINTMENTS.—The following judgeship
positions shall be filled in the manner prescribed in
section 152(a)(1) of title 28, United States Code, for
the appointment of bankruptcy judges provided for
in section 152(a)(2) of such title:
(A) One additional bankruptcy judgeship
for the eastern district of California.
(B) Four additional bankruptcy judgeships
for the central district of California.
(C) One additional bankruptcy judgeship
for the southern district of Florida.
(D) Two additional bankruptcy judgeships
for the district of Maryland.
(E) One additional bankruptcy judgeship
for the eastern district of Michigan.
(F) One additional bankruptcy judgeship
for the southern district of Mississippi.
(G) One additional bankruptcy judgeship
for the district of New Jersey.
(H) One additional bankruptcy judgeship
for the eastern district of New York.
(I) One additional bankruptcy judgeship
for the northern district of New York.
(J) One additional bankruptcy judgeship
for the southern district of New York.
(K) One additional bankruptcy judgeship
for the eastern district of Pennsylvania.
(L) One additional bankruptcy judgeship
for the middle district of Pennsylvania.
(M) One additional bankruptcy judgeship
for the western district of Tennessee.
(N) One additional bankruptcy judgeship
for the eastern district of Virginia.
(2) VACANCIES.—The first vacancy occurring in
the office of a bankruptcy judge in each of the judi-
cial districts set forth in paragraph (1) that—
(A) results from the death, retirement, res-
ignation, or removal of a bankruptcy judge; and
(B) occurs 5 years or more after the ap-
pointment date of a bankruptcy judge ap-
pointed under paragraph (1);
shall not be filled.
(c) EXTENSIONS.—
(1) IN GENERAL.—The temporary bankruptcy
judgeship positions authorized for the northern dis-
trict of Alabama, the district of Delaware, the dis-
trict of Puerto Rico, the district of South Carolina,
and the eastern district of Tennessee under section
3(a) (1), (3), (7), (8), and (9) of the Bankruptcy
Judgeship Act of 1992 (28 U.S.C. 152 note) are ex-
tended until the first vacancy occurring in the office
of a bankruptcy judge in the applicable district re-
sulting from the death, retirement, resignation, or
removal of a bankruptcy judge and occurring—
(A) 8 years or more after November 8,
1993, with respect to the northern district of
Alabama;
(B) 10 years or more after October 28,
1993, with respect to the district of Delaware;
(C) 8 years or more after August 29,
1994, with respect to the district of Puerto
Rico;
(D) 8 years or more after June 27, 1994,
with respect to the district of South Carolina;
and
(E) 8 years or more after November 23,
1993, with respect to the eastern district of
Tennessee.
(2) APPLICABILITY OF OTHER PROVISIONS.—
All other provisions of section 3 of the Bankruptcy
Judgeship Act of 1992 remain applicable to such
temporary judgeship position.
(d) TECHNICAL AMENDMENT.—The first sentence of
section 152(a)(1) of title 28, United States Code, is
amended to read as follows: ‘‘Each bankruptcy judge to
be appointed for a judicial district as provided in para-
graph (2) shall be appointed by the United States court
of appeals for the circuit in which such district is lo-
cated.’’.
(e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES.—
Section 156 of title 28, United States Code, is amended
by adding at the end the following new subsection:
‘‘(g)(1) In this subsection, the term ‘travel
expenses’—
‘‘(A) means the expenses incurred by a bank-
ruptcy judge for travel that is not directly related to
any case assigned to such bankruptcy judge; and
‘‘(B) shall not include the travel expenses of a
bankruptcy judge if—
‘‘(i) the payment for the travel expenses is
paid by such bankruptcy judge from the per-
sonal funds of such bankruptcy judge; and
‘‘(ii) such bankruptcy judge does not re-
ceive funds (including reimbursement) from the
United States or any other person or entity for
the payment of such travel expenses.
‘‘(2) Each bankruptcy judge shall annually submit
the information required under paragraph (3) to the chief
bankruptcy judge for the district in which the bankruptcy
judge is assigned.
‘‘(3)(A) Each chief bankruptcy judge shall submit an
annual report to the Director of the Administrative Office
of the United States Courts on the travel expenses of each
bankruptcy judge assigned to the applicable district (in-
cluding the travel expenses of the chief bankruptcy judge
of such district).
‘‘(B) The annual report under this paragraph shall
include—
‘‘(i) the travel expenses of each bankruptcy
judge, with the name of the bankruptcy judge to
whom the travel expenses apply;
‘‘(ii) a description of the subject matter and
purpose of the travel relating to each travel expense
identified under clause (i), with the name of the
bankruptcy judge to whom the travel applies; and
‘‘(iii) the number of days of each travel de-
scribed under clause (ii), with the name of the bank-
ruptcy judge to whom the travel applies.
‘‘(4)(A) The Director of the Administrative Office of
the United States Courts shall—
‘‘(i) consolidate the reports submitted under
paragraph (3) into a single report; and
‘‘(ii) annually submit such consolidated report
to Congress.
‘‘(B) The consolidated report submitted under this
paragraph shall include the specific information required
under paragraph (3)(B), including the name of each bank-
ruptcy judge with respect to clauses (i), (ii), and (iii) of
paragraph (3)(B).’’.
SEC. 131. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED
STATES CODE.
(a) Section 507(a) of title 11, United States Code,
is amended by inserting after paragraph (9) the following:
‘‘(10) Tenth, allowed claims for death or per-
sonal injuries resulting from the operation of a
motor vehicle or vessel if such operation was unlaw-
ful because the debtor was intoxicated from using al-
cohol, a drug or another substance.’’.
(b) Section 523(a)(9) of title 11, United States Code,
is amended by inserting ‘‘or vessel’’ after ‘‘vehicle’’.
SEC. 132. AMENDMENT TO SECTION 1325 OF TITLE 11,
UNITED STATES CODE.
Section 1325(b)(2) of title 11, United States Code,
is amended by inserting after ‘‘received by the debtor’’,
‘‘(other than child support payments, foster care pay-
ments, or disability payments for a dependent child made
in accordance with applicable nonbankruptcy law and
which is reasonably necessary to be expended)’’.
SEC. 133. APPLICATION OF THE CODEBTOR STAY ONLY
WHEN THE STAY PROTECTS THE DEBTOR.
Section 1301(b) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(2) by adding at the end the following:
‘‘(2)(A) Notwithstanding subsection (c) and except as
provided in subparagraph (B), in any case in which the
debtor did not receive the consideration for the claim held
by a creditor, the stay provided by subsection (a) shall
apply to that creditor for a period not to exceed 30 days
beginning on the date of the order for relief, to the extent
the creditor proceeds against—
‘‘(i) the individual that received that consider-
ation; or
‘‘(ii) property not in the possession of the debt-
or that secures that claim.
‘‘(B) Notwithstanding subparagraph (A), the stay
provided by subsection (a) shall apply in any case in which
the debtor is primarily obligated to pay the creditor in
whole or in part with respect to a claim described in sub-
paragraph (A) under a legally binding separation or prop-
erty settlement agreement or divorce or dissolution decree
with respect to—
‘‘(i) an individual described in subparagraph
(A)(i); or
‘‘(ii) property described in subparagraph (A)(ii).
‘‘(3) Notwithstanding subsection (c), the stay pro-
vided by subsection (a) shall terminate as of the date of
confirmation of the plan, in any case in which the plan
of the debtor provides that the debtor’s interest in per-
sonal property subject to a lease with respect to which the
debtor is the lessee will be surrendered or abandoned or
no payments will be made under the plan on account of
the debtor’s obligations under the lease.’’.
SEC. 134. ADEQUATE PROTECTION FOR INVESTORS.
(a) DEFINITION.—Section 101 of title 11, United
States Code, is amended by inserting after paragraph (48)
the following:
‘‘(48A) ‘securities self regulatory organization’
means either a securities association registered with
the Securities and Exchange Commission pursuant
to section 15A of the Securities Exchange Act of
1934 or a national securities exchange registered
with the Securities and Exchange Commission pur-
suant to section 6 of the Securities Exchange Act of
1934;’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, as amended by section 120, is
amended—
(1) in paragraph (19) by striking ‘‘or’’ at the
end;
(2) in paragraph (20) by striking the period at
the end and a inserting ‘‘; or’’; and
(3) by inserting after paragraph (20) the fol-
lowing:
‘‘(21) under subsection (a), of the commence-
ment or continuation of an investigation or action by
a securities self regulatory organization to enforce
such organization’s regulatory power; of the enforce-
ment of an order or decision, other than for mone-
tary sanctions, obtained in an action by the securi-
ties self regulatory organization to enforce such or-
ganization’s regulatory power; or of any act taken by
the securities self regulatory organization to delist,
delete, or refuse to permit quotation of any stock
that does not meet applicable regulatory require-
ments.’’.
SEC. 135. 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), con-
sumer debts owed to a single creditor and aggregat-
ing more than $250 for ‘luxury goods or services’ in-
curred by an individual debtor on or within 90 days
before the order for relief under this title, or cash
advances aggregating more than $250 that are ex-
tensions of consumer credit under an open end cred-
it plan obtained by an individual debtor on or within
90 days before the order for relief under this title,
are presumed to be nondischargeable; and
‘‘(ii) for purposes of this subparagraph—
‘‘(I) the term ‘luxury goods or services’
does not include goods or services reasonably
necessary for the support or maintenance of the
debtor or a dependent of the debtor; and
‘‘(II) the term ‘an extension of consumer
credit under an open end credit plan’ has the
same meaning such term has for purposes of
the Consumer Credit Protection Act;’’.
SEC. 136. 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) of this title is automatically
terminated.
‘‘(2) In the case of an individual under chapter 7,
the debtor may notify the creditor in writing that the debt-
or desires to assume the lease. Upon being so notified,
the creditor may, at its option, notify the debtor that it
is willing to have the lease assumed by the debtor and
may condition such assumption on cure of any outstanding
default on terms set by the contract. If within 30 days
of such notice the debtor notifies the lessor in writing that
the lease is assumed, the liability under the lease will be
assumed by the debtor and not by the estate. The stay
under section 362 of this title and the injunction under
section 524(a)(2) of this title shall not be violated by noti-
fication of the debtor and negotiation of cure under this
subsection.
‘‘(3) In a case under chapter 11 of this title in which
the debtor is an individual and in a case under chapter
13 of this title, 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 of this title
and any stay under section 1301 is automatically termi-
nated with respect to the property subject to the lease.’’.
SEC. 137. ADEQUATE PROTECTION OF LESSORS AND PUR-
CHASE MONEY SECURED CREDITORS.
(a) IN GENERAL.—Chapter 13 of title 11, United
States Code, is amended by adding after section 1307 the
following:
‘‘§ 1307A. Adequate protection in chapter 13 cases
‘‘(a)(1)(A) On or before the date that is 30 days after
the filing of a case under this chapter, the debtor shall
make cash payments in an amount determined under
paragraph (2)(A), to—
‘‘(i) any lessor of personal property; and
‘‘(ii) any creditor holding a claim secured by
personal property to the extent that the claim is at-
tributable to the purchase of that property by the
debtor.
‘‘(B) The debtor or the plan shall continue making
the adequate protection payments until the earlier of the
date on which—
‘‘(i) the creditor begins to receive actual pay-
ments under the plan; or
‘‘(ii) the debtor relinquishes possession of the
property referred to in subparagraph (A) to—
‘‘(I) the lessor or creditor; or
‘‘(II) any third party acting under claim of
right, as applicable.
‘‘(2) The payments referred to in paragraph (1)(A)
shall be the contract amount.
‘‘(b)(1) Subject to the limitations under paragraph
(2), the court may, after notice and hearing, change the
amount and timing of the dates of payment of payments
made under subsection (a).
‘‘(2)(A) The payments referred to in paragraph (1)
shall be payable not less frequently than monthly.
‘‘(B) The amount of payments referred to in para-
graph (1) shall not be less than the amount of any weekly,
biweekly, monthly, or other periodic payment schedules as
payable under the contract between the debtor and credi-
tor.
‘‘(c) Notwithstanding section 1326(b), the payments
referred to in subsection (a)(1)(A) shall be continued in
addition to plan payments under a confirmed plan until
actual payments to the creditor begin under that plan, if
the confirmed plan provides—
‘‘(1) for payments to a creditor or lessor de-
scribed in subsection (a)(1); and
‘‘(2) for the deferral of payments to such credi-
tor or lessor under the plan until the payment of
amounts described in section 1326(b).
‘‘(d) Notwithstanding sections 362, 542, and 543, a
lessor or creditor described in subsection (a) may retain
possession of property described in that subsection that
was obtained in accordance with applicable law before the
date of filing of the petition until the first payment under
subsection (a)(1)(A) is received by the lessor or creditor.
‘‘(e) On or before 60 days after the filling of a case
under this chapter, a debtor retaining possession of per-
sonal property subject to a lease or securing a claim attrib-
utable in whole or in part to the purchase price of such
property shall provide each creditor or lessor reasonable
evidence of the maintenance of any required insurance
coverage with respect to the use or ownership of such
property and continue to do so for so long as the debtor
retains possession of such property.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 13 of title 11, United States
Code, is amended by inserting after the item relating to
section 1307 the following:
‘‘1307A. Adequate protection in chapter 13 cases.’’.
SEC. 139. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as
amended by sections 120 and 134, is amended—
(1) in paragraph (20), by striking ‘‘or’’ at the
end;
(2) in paragraph (21), by striking the period at
the end and inserting a semicolon; and
(3) by inserting after paragraph (21) the fol-
lowing:
‘‘(22) under subsection (a) of any transfer that
is not avoidable under section 544 of this title and
that is not avoidable under section 549 of this title;
‘‘(23) under subsection (a)(3), of the continu-
ation of any eviction, unlawful detainer action, or
similar proceeding by a lessor against a debtor in-
volving residential real property in which the debtor
resides as a tenant under a rental agreement and
the debtor has not paid rent to the lessor pursuant
to the terms of the lease agreement or applicable
State law after the commencement and during the
course of the case;
‘‘(24) under subsection (a)(3), of the com-
mencement or continuation of any eviction, unlawful
detainer action, or similar proceeding by a lessor
against a debtor involving residential real property
in which the debtor resides as a tenant under a rent-
al agreement that has terminated pursuant to the
lease agreement or applicable State law;
‘‘(25) under subsection (a)(3), of any eviction,
unlawful detainer action, or similar proceeding, if
the debtor has previously filed within the last year
and failed to pay post-petition rent during the
course of that case; or
‘‘(26) under subsection (a)(3), of eviction ac-
tions based on endangerment to property or person
or the use of illegal drugs.’’.
SEC. 140. EXTEND PERIOD BETWEEN BANKRUPTCY DIS-
CHARGES.
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 adding at the end the
following:
‘‘(f) Notwithstanding subsections (a) and (b), the
court shall not grant a discharge of all debts provided for
by the plan or disallowed under section 502 of this title
if the debtor has received a discharge in any case filed
under this title within 5 years of the order for relief under
this chapter.’’.
SEC. 141. DEFINITION OF DOMESTIC SUPPORT OBLIGA-
TION.
Section 101 of title 11, United States Code, is
amended—
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the fol-
lowing:
(14A) ‘domestic support obligation’ means a debt
that accrues before or after the entry of an order for
relief under this title that is—
‘‘(A) owed to or recoverable by—
‘‘(i) a spouse, former spouse, or child
of the debtor or that child’s legal guardian;
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, without regard to whether such
debt is expressly so designated;
‘‘(C) established or subject to establish-
ment before or after entry of an order for relief
under this title, by reason of applicable provi-
sions of—
‘‘(i) a separation agreement, divorce
decree, or property settlement agreement;
‘‘(ii) an order of a court of record; or
‘‘(iii) a determination made in accord-
ance with applicable nonbankruptcy law by
a governmental unit; and
‘‘(D) not assigned to a nongovernmental
entity, unless that obligation is assigned volun-
tarily by the spouse, former spouse, child, or
parent solely for the purpose of collecting the
debt.’’.
SEC. 142. PRIORITIES FOR CLAIMS FOR DOMESTIC SUP-
PORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is
amended—
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through
(6) as paragraphs (2) through (7), respectively;
(3) in paragraph (2), as redesignated, by strik-
ing ‘‘First’’ and inserting ‘‘Second’’;
(4) in paragraph (3), as redesignated, by strik-
ing ‘‘Second’’ and inserting ‘‘Third’’;
(5) in paragraph (4), as redesignated, by strik-
ing ‘‘Third’’ and inserting ‘‘Fourth’’;
(6) in paragraph (5), as redesignated, by strik-
ing ‘‘Fourth’’ and inserting ‘‘Fifth’’;
(7) in paragraph (6), as redesignated, by strik-
ing ‘‘Fifth’’ and inserting ‘‘Sixth’’;
(8) in paragraph (7), as redesignated, by strik-
ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; and
(9) by inserting before paragraph (2), as redes-
ignated, the following:
‘‘(1) First, allowed claims for domestic support obli-
gations to be paid in the following order on the condition
that funds received under this paragraph by a govern-
mental unit in a case under this title be applied:
‘‘(A) Claims that, as of the date of entry of the
order for relief, are owed directly to a spouse, former
spouse, or child of the debtor, or the parent of such
child, without regard to whether the claim is filed by
the spouse, former spouse, child, or parent, or is
filed by a governmental unit on behalf of that per-
son.
‘‘(B) Claims that, as of the date of entry of the
order for relief, are assigned by a spouse, former
spouse, child of the debtor, or the parent of that
child to a governmental unit or are owed directly to
a governmental unit under applicable nonbankruptcy
law.’’.
SEC. 143. REQUIREMENTS TO OBTAIN CONFIRMATION AND
DISCHARGE IN CASES INVOLVING DOMESTIC
SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended—
(1) in section 1129(a), by adding at the end the
following:
‘‘(14) If the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or statute for such obliga-
tion that become payable after the date on which the
petition is filed.’’;
(2) in section 1325(a)—
(A) in paragraph (5), by striking ‘‘and’’ at
the end;
(B) in paragraph (6), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(7) if the debtor is required by a judicial or
administrative order or statute to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order for such obligation that
become payable after the date on which the petition
is filed.’’; and
(3) in section 1328(a), as amended by section
129, in the matter preceding paragraph (1), by in-
serting ‘‘, and with respect to a debtor who is re-
quired by a judicial or administrative order to pay
a domestic support obligation, certifies that all
amounts payable under such order or statute that
are due on or before the date of the certification (in-
cluding amounts due before or after the petition was
filed) have been paid’’ after ‘‘completion by the debt-
or of all payments under the plan’’.
SEC. 144. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, as
amended by sections 120, 134, and 139, is amended—
(1) by striking paragraph (2) and inserting the
following:
‘‘(2) under subsection (a)—
‘‘(A) of the commencement or continuation
of an action or proceeding for—
‘‘(i) the establishment of paternity as
a part of an effort to collect domestic sup-
port obligations; or
‘‘(ii) the establishment or modification
of an order for domestic support obliga-
tions; or
‘‘(B) the collection of a domestic support
obligation from property that is not property of
the estate;’’;
(2) in paragraph (25), by striking ‘‘or’’ at the
end;
(3) in paragraph (26), by striking the period at
the end and inserting a semicolon; and
(4) by inserting after paragraph (26) the fol-
lowing:
‘‘(27) under subsection (a) with respect to the
withholding of income pursuant to an order as speci-
fied in section 466(b) of the Social Security Act (42
U.S.C. 666(b)); or
‘‘(28) under subsection (a) with respect to—
‘‘(A) the withholding, suspension, or re-
striction of drivers’ licenses, professional and
occupational licenses, and recreational licenses
pursuant to State law, as specified in section
466(a)(16) of the Social Security Act (42
U.S.C. 666(a)(16)) or with respect to the re-
porting of overdue support owed by an absent
parent to any consumer reporting agency as
specified in section 466(a)(7) of the Social Se-
curity Act (42 U.S.C. 666(a)(7));
‘‘(B) the interception of tax refunds, as
specified in sections 464 and 466(a)(3) of the
Social Security Act (42 U.S.C. 664 and
666(a)(3)); or
‘‘(C) the enforcement of medical obliga-
tions as specified under title IV of the Social
Security Act (42 U.S.C. 601 et seq.).’’.
SEC. 145. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR
ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is
amended—
(1) in subsection (a), by striking paragraph (5)
and inserting the following:
‘‘(5) for a domestic support obligation;’’;
(2) in subsection (c), by striking ‘‘(6), or (15)’’
and inserting ‘‘or (6)’’; and
(3) in paragraph (15), by striking ‘‘govern-
mental unit’’ and all through the end of the para-
graph and inserting a semicolon.
SEC. 146. 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);’’; and
(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’’.
SEC. 147. 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 obligation;
or’’.
SEC. 148. DEFINITION OF HOUSEHOLD GOODS AND AN-
TIQUES.
Section 522(f)(1)(B) of title 11, United States Code,
is amended as follows:
(1) by inserting ‘‘(i)’’ after ‘‘(B)’’; and
(2) by striking ‘‘(i)’’ and inserting ‘‘(aa)’’; and
‘‘(bb) electronic entertainment equip-
ment (except one television, one radio, and
one VCR);
‘‘(cc) items acquired as antiques;
‘‘(dd) jewelry (except wedding rings);
‘‘(ee) a computer (except as otherwise
provided for in this section), motor vehicle
(including a tractor or lawn tractor), boat,
or a motorized recreational device, convey-
ance, vehicle, watercraft, or aircraft.’’.
SEC. 149. NONDISCHARGEABLE DEBTS.
Section 523(a) of title 11, United States Code, is
amended by inserting after paragraph (14) the following:
‘‘(14A) incurred to pay a debt that is non-
dischargeable by reason of section 727, 1141,
1228(a), 1228(b), or 1328(b), or any other provision
of this subsection, if the debtor incurred the debt to
pay such a nondischargeable debt with the intent to
discharge in bankruptcy the newly-created debt, ex-
cept that all debts incurred to pay nondischargeable
debts, without regard to intent, are nondischargeable
if incurred within 90 days of the filing of the peti-
tion;’’.
TITLE II—DISCOURAGING
BANKRUPTCY ABUSE
SEC. 201. REENACTMENT OF CHAPTER 12.
(a) REENACTMENT.—Chapter 12 of title 11 of the
United States Code, as in effect on March 31, 1999, is
hereby reenacted.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on March 31, 1999.
SEC. 202. MEETINGS OF CREDITORS AND EQUITY SECURITY
HOLDERS.
Section 341 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(e) Notwithstanding subsections (a) and (b), the
court, on the request of a party in interest and after notice
and a hearing, for cause may order that the United States
trustee not convene a meeting of creditors or equity secu-
rity holders if the debtor has filed a plan as to which the
debtor solicited acceptances prior to the commencement
of the case.’’.
SEC. 203. 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) by striking ‘‘(2)(A) any property’’
and inserting:
‘‘(3) Property listed in this paragraph is—
‘‘(A) any property’’;
(ii) in subparagraph (A), by striking
‘‘and’’ at the end;
(iii) in subparagraph (B), by striking
the period at the end and inserting ‘‘;
and’’; and
(iv) by adding at the end the follow-
ing:
‘‘(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.’’;
(B) by striking paragraph (1) and insert-
ing:
‘‘(2) Property listed in this paragraph is property
that is specified under subsection (d), unless the State law
that is applicable to the debtor under paragraph (3)(A)
specifically does not so authorize.’’;
(C) in the matter preceding paragraph
(2)—
(i) by striking ‘‘(b)’’ and inserting
‘‘(b)(1)’’;
(ii) by striking ‘‘paragraph (2)’’ both
places it appears and inserting ‘‘paragraph
(3)’’;
(iii) by striking ‘‘paragraph (1)’’ each
place it appears and inserting ‘‘paragraph
(2)’’; and
(iv) by striking ‘‘Such property is—’’;
and
(D) by adding at the end of the subsection
the following:
‘‘(4) For purposes of paragraph (3)(C), the following
shall apply:
‘‘(A) If the retirement funds are in a retirement
fund that has received a favorable determination
pursuant to section 7805 of the Internal Revenue
Code of 1986, and that determination is in effect as
of the date of the commencement of the case under
section 301, 302, or 303 of this title, those funds
shall be presumed to be exempt from the estate.
‘‘(B) If the retirement funds are in a retirement
fund that has not received a favorable determination
pursuant to such section 7805, those funds are ex-
empt from the estate if the debtor demonstrates
that—
‘‘(i) no prior determination to the contrary
has been made by a court or the Internal Reve-
nue Service; and
‘‘(ii) the retirement fund is in substantial
compliance with the applicable requirements of
the Internal Revenue Code of 1986.
‘‘(C) A direct transfer of retirement funds from
1 fund or account that is exempt from taxation
under section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986, pur-
suant to section 401(a)(31) of the Internal Revenue
Code of 1986, or otherwise, shall not cease to qualify
for exemption under paragraph (3)(C) by reason of
that direct transfer.
‘‘(D)(i) Any distribution that qualifies as an eli-
gible rollover distribution within the meaning of sec-
tion 402(c) of the Internal Revenue Code of 1986 or
that is described in clause (ii) shall not cease to
qualify for exemption under paragraph (3)(C) by
reason of that distribution.
‘‘(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 that amount.’’;
and
(2) in subsection (d)—
(A) in the matter preceding paragraph (1),
by striking ‘‘subsection (b)(1)’’ and inserting
‘‘subsection (b)(2)’’; and
(B) by adding at the end the following:
‘‘(12) Retirement funds to the extent that those
funds are in a fund or account that is exempt from tax-
ation 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, as amended by sections 120, 134,
139, and 144 is amended—
(1) in paragraph (27), by striking ‘‘or’’ at the
end;
(2) in paragraph (28), by striking the period
and inserting ‘‘; or’’;
100
(3) by inserting after paragraph (28) the fol-
lowing:
‘‘(29) under subsection (a), of withholding of
income from a debtor’s wages and collection of
amounts withheld, pursuant to the debtor’s agree-
ment authorizing that withholding and collection for
the benefit of a pension, profit-sharing, stock bonus,
or other plan established under section 401, 403,
408, 408A, 414, 457, or 501(a) of the Internal Rev-
enue Code of 1986 that is sponsored by the em-
ployer 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 that satisfies the
requirements of section 408(b)(1) of the Em-
ployee Retirement Income Security Act of 1974
or is subject to section 72(p) of the Internal
Revenue Code of 1986; or
‘‘(B) in the case of a loan from a thrift
savings plan described in subchapter III of title
5, that satisfies the requirements of section
8433(g) of such title.’’; and
(4) by adding at the end of the flush material
following paragraph (19) the following: ‘‘Paragraph
101
(19) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under
a loan made during the 1-year period preceding the
filing of a petition. Nothing in paragraph (19) may
be construed to provide that any loan made under
a governmental plan under section 414(d), or a con-
tract or account under section 403(b), of the Inter-
nal 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, is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(17);
(2) by striking the period at the end of para-
graph (18) and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(19) 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, pursuant to—
‘‘(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
102
‘‘(B) a loan from the thrift savings plan
described in subchapter III of title 5, that satis-
fies the requirements of section 8433(g) of such
title.
Paragraph (19) does not apply to any amount owed to
a plan referred to in that paragraph that is incurred under
a loan made during the 1-year period preceding the filing
of a petition. Nothing in paragraph (19) may be construed
to provide that any loan made under a governmental plan
under section 414(d), or a contract or account under sec-
tion 403(b), of the Internal Revenue Code of 1986 con-
stitutes a claim or a debt under this title.’’.
(d) PLAN CONTENTS.—Section 1322 of title 11,
United States Code, is amended by adding at the end the
following:
‘‘(f) A plan may not materially alter the terms of a
loan described in section 362(b)(19) of this title.’’.
SEC. 204. PROTECTION OF REFINANCE OF SECURITY IN-
TEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2)
of title 11, United States Code, are amended by striking
‘‘10’’ each place it appears and inserting ‘‘30’’.
103
SEC. 
205. 
EXECUTORY 
CONTRACTS 
AND 
UNEXPIRED
LEASES.
Section 365(d)(4) of title 11, United States Code, is
amended to read as follows:
‘‘(4)(A) Subject to subparagraph (B), in any case
under any chapter of this title, an unexpired lease of non-
residential real property under which the debtor is the les-
see shall be deemed rejected and the trustee shall imme-
diately surrender that nonresidential real property to the
lessor if the trustee does not assume or reject the unex-
pired lease by the earlier of—
‘‘(i) the date that is 180 days after the date of
the order for relief; or
‘‘(ii) the date of the entry of an order confirm-
ing a plan.
‘‘(B) The court may extend the period determined
under subparagraph (A) only upon a motion of the les-
sor.’’.
SEC. 206. CREDITORS AND EQUITY SECURITY HOLDERS
COMMITTEES.
Section 1102(a)(2) of title 11, United States Code,
is amended by inserting before the first sentence the fol-
lowing: ‘‘On its own motion or on request of a party in
interest, and after notice and hearing, the court may order
a change in the membership of a committee appointed
under this subsection, if the court determines that the
104
change is necessary to ensure adequate representation of
creditors or equity security holders.’’.
SEC. 207. AMENDMENT TO SECTION 546 OF TITLE 11,
UNITED STATES CODE.
Section 546 of title 11, United States Code, is
amended by inserting at the end thereof:
‘‘(I) Notwithstanding section 545 (2) and (3) of
this 
title, 
the 
trustee 
may 
not 
avoid 
a
warehouseman’s lien for storage, transportation or
other costs incidental to the storage and handling of
goods, as provided by section 7–209 of the Uniform
Commercial Code.’’.
SEC. 208. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code,
is amended by striking ‘‘20’’ and inserting ‘‘45’’.
SEC. 209. AMENDMENT TO SECTION 330(a) OF TITLE 11,
UNITED STATES CODE.
Section 330(a) of title 11, United States Code, is
amended—
(1) in subsection (3)(A) after the word ‘‘award-
ed’’, by inserting ‘‘to an examiner, chapter 11 trust-
ee, or professional person’’; and
(2) by adding at the end of subsection (3)(A)
the following:
105
‘‘(3)(B) In determining the amount of reason-
able compensation to be awarded a trustee, the court
shall treat such compensation as a commission based
on the results achieved.’’.
SEC. 210. POSTPETITION DISCLOSURE AND SOLICITATION.
Section 1125 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(g) Notwithstanding subsection (b), an acceptance
or rejection of the plan may be solicited from a holder
of a claim or interest if such solicitation complies with ap-
plicable nonbankruptcy law and if such holder was solic-
ited before the commencement of the case in a manner
complying with applicable nonbankruptcy law.’’.
SEC. 211. PREFERENCES.
Section 547(c) of title 11, United States Code, is
amended—
(1) by amending paragraph (2) to read as fol-
lows:
‘‘(2) to the extent that such transfer was in
payment of a debt incurred by the debtor in the or-
dinary course of business or financial affairs of the
debtor and the transferee, and such transfer was—
‘‘(A) made in the ordinary course of busi-
ness or financial affairs of the debtor and the
transferee; or
106
‘‘(B) made according to ordinary business
terms;’’;
(2) in paragraph (7) by striking ‘‘or’’ at the
end;
(3) in paragraph (8) by striking the period at
the end and inserting ‘‘; or’’; and
(4) by adding at the end the following:
‘‘(9) if, in a case filed by a debtor whose debts
are not primarily consumer debts, the aggregate
value of all property that constitutes or is affected
by such transfer is less than $5000.’’.
SEC. 212. VENUE OF CERTAIN PROCEEDINGS.
Section 1409(b) of title 28, United States Code, is
amended by inserting ‘‘, or a nonconsumer debt against
a noninsider of less than $10,000,’’ after ‘‘$5,000’’.
SEC. 213. PERIOD FOR FILING PLAN UNDER CHAPTER 11.
Section 1121(d) of title 11, United States Code, is
amended—
(1) by striking ‘‘On’’ and inserting ‘‘(1) Subject
to paragraph (1), on’’; and
(2) by adding at the end the following:
‘‘(2)(A) Such 120-day period may not be extended
beyond a date that is 18 months after the date of the order
for relief under this chapter.
107
‘‘(B) Such 180-day period may not be extended be-
yond a date that is 20 months after the date of the order
for relief under this chapter.’’.
SEC. 214. FEES ARISING FROM CERTAIN OWNERSHIP IN-
TERESTS.
Section 523(a)(16) of title 11, United States Code,
is amended—
(1) by striking ‘‘dwelling’’ the first place it ap-
pears;
(2) by striking ‘‘ownership or’’ and inserting
‘‘ownership,’’;
(3) by striking ‘‘housing’’ the first place it ap-
pears; and
(4) by striking ‘‘but only’’ and all that follows
through ‘‘such period,’’, and inserting ‘‘or a lot in a
homeowners association, for as long as the debtor or
the trustee has a legal, equitable, or possessory own-
ership interest in such unit, such corporation, or
such lot, and until such time as the debtor or trustee
has surrendered any legal, equitable or possessory
interest in such unit, such corporation, or such lot,’’.
108
SEC. 215. CLAIMS RELATING TO INSURANCE DEPOSITS IN
CASES ANCILLARY TO FOREIGN PROCEED-
INGS.
Section 304 of title 11, United States Code, is
amended to read as follows:
‘‘§ 304. Cases ancillary to foreign proceedings
‘‘(a) For purposes of this section—
‘‘(1) the term ‘domestic insurance company’
means a domestic insurance company, as such term
is used in section 109(b)(2);
‘‘(2) the term ‘foreign insurance company’
means a foreign insurance company, as such term is
used in section 109(b)(3);
‘‘(3) the term ‘United States claimant’ means a
beneficiary of any deposit referred to in subsection
(b) or any multibeneficiary trust referred to in sub-
section (b);
‘‘(4) the term ‘United States creditor’ means,
with respect to a foreign insurance company—
‘‘(i) a United States claimant; or
‘‘(ii) any business entity that operates in
the United States and that is a creditor; and
‘‘(5) the term ‘United States policyholder’
means a holder of an insurance policy issued in the
United States.
109
‘‘(b) The court may not grant relief under chapter
15 of this title with respect to any deposit, escrow, trust
fund, or other security required or permitted under any
applicable State insurance law or regulation for the benefit
of claim holders in the United States.’’.
SEC. 215. DEFAULTS BASED ON NONMONETARY OBLIGA-
TIONS.
(a) EXECUTORY
CONTRACTS
AND
UNEXPIRED
LEASES.—Section 365 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (1)(A) by striking the
semicolon at the end and inserting the follow-
ing:
‘‘other than a default that is a breach of a provision
relating to—
‘‘(i) the satisfaction of any provision (other
than a penalty rate or penalty provision) relat-
ing to a default arising from any failure to per-
form nonmonetary obligations under an unex-
pired lease of real property (excluding executory
contracts that transfer a right or interest under
a filed or issued patent, copyright, trademark,
trade dress, or trade secret), if it is impossible
for the trustee to cure such default by perform-
110
ing nonmonetary acts at and after the time of
assumption; or
‘‘(ii) the satisfaction of any provision
(other than a penalty rate or penalty provision)
relating to a default arising from any failure to
perform nonmonetary obligations under an ex-
ecutory contract, if it is impossible for the
trustee to cure such default by performing non-
monetary acts at and after the time of assump-
tion and if the court determines, based on the
equities of the case, that this subparagraph
should not apply with respect to such default;’’;
and
(B) by amending paragraph (2)(D) to read
as follows:
‘‘(D) the satisfaction of any penalty rate or
penalty provision relating to a default arising from
a failure to perform nonmonetary obligations under
an executory contract (excluding executory contracts
that transfer a right or interest under a filed or
issued patent, copyright, trademark, trade dress, or
trade secret) or under an unexpired lease of real or
personal property.’’;
(2) in subsection (c)—
111
(A) in paragraph (2) by adding ‘‘or’’ at the
end;
(B) in paragraph (3) by striking ‘‘; or’’ at
the end and inserting a period; and
(C) by striking paragraph (4);
(3) in subsection (d)—
(A) by striking paragraphs (5) through
(9); and
(B) by redesignating paragraph (10) as
paragraph (5); and
(4) in subsection (f)(1) by striking ‘‘; except
that’’ and all that follows through the end of the
paragraph and inserting a period.
(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Sec-
tion 1124(2) of title 11, United States Code, is
amended—
(1) in subparagraph (A) by inserting ‘‘or of a
kind that section 365(b)(1)(A) of this title expressly
does not require to be cured’’ before the semicolon
at the end;
(2) in subparagraph (C) by striking ‘‘and’’ at
the end;
(3) by redesignating subparagraph (D) as sub-
paragraph (E); and
112
(4) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) if such claim or such interest arises
from any failure to perform a nonmonetary ob-
ligation, compensates the holder of such claim
or such interest (other than the debtor or an in-
sider) for any actual pecuniary loss incurred by
such holder as a result of such failure; and’’.
TITLE III—GENERAL BUSINESS
BANKRUPTCY PROVISIONS
SEC. 301. DEFINITION OF DISINTERESTED PERSON.
Section 101(14) of title 11, United States Code, is
amended to read as follows:
‘‘(14) ‘disinterested person’ means a person
that—
‘‘(A) is not a creditor, an equity security
holder, or an insider;
‘‘(B) is not and was not, within 2 years be-
fore the date of the filing of the petition, a di-
rector, officer, or employee of the debtor; and
‘‘(C) does not have an interest materially
adverse to the interest of the estate or of any
class of creditors or equity security holders, by
reason of any direct or indirect relationship to,
113
connection with, or interest in, the debtor, or
for any other reason;’’.
SEC. 302. MISCELLANEOUS IMPROVEMENTS.
(a) WHO MAY BE A DEBTOR.—Section 109 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(h)(1) Subject to paragraphs (2) and (3) and not-
withstanding any other provision of this section, an indi-
vidual may not be a debtor under this title unless that
individual has, during the 90-day period preceding the
date of filing of the petition of that individual, received
credit counseling, including, at a minimum, participation
in an individual or group briefing that outlined the oppor-
tunities for available credit counseling and assisted that
individual in performing an initial budget analysis,
through a credit counseling program (offered through an
approved credit counseling service described in section
111(a)).
‘‘(2)(A) Paragraph (1) shall not apply with respect
to a debtor who resides in a district for which the United
States trustee or bankruptcy administrator of the bank-
ruptcy court of that district determines that the approved
credit counseling services for that district are not reason-
ably able to provide adequate services to the additional
individuals who would otherwise seek credit counseling
114
from those programs by reason of the requirements of
paragraph (1).
‘‘(B) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
paragraph (A) shall review that determination not later
than one year after the date of that determination, and
not less frequently than every year thereafter.
‘‘(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 credit counsel-
ing service, but was unable to obtain the services re-
ferred 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.’’.
116
instructional course by reason of the requirements of this
section.
‘‘(h) Each United States trustee or bankruptcy ad-
ministrator that makes a determination described in sub-
section (g) shall review that determination not later than
1 year after the date of that determination, and not less
frequently than every year thereafter.
(d) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 121, 604, and
122, is amended by adding at the end the following:
‘‘(d) In addition to the requirements under subsection
(a), an individual debtor shall file with the court—
‘‘(1) a certificate from the credit counseling
service that provided the debtor services under sec-
tion 109(h); and
‘‘(2) a copy of the debt repayment plan, if any,
developed under section 109(h) through the credit
counseling service referred to in paragraph (1).’’.
(e) EXCEPTIONS TO DISCHARGE.—Section 523(d) of
title 11, United States Code, as amended by section 202
of this Act, is amended by striking paragraph (3)(A)(i)
and inserting the following:
‘‘(i) within the applicable period of time pre-
scribed under section 109(h), the debtor received
118
‘‘(13A) ‘debtor’s principal residence’—
‘‘(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;’’; and
(2) by inserting after paragraph (27A), as
added by section 318 of this Act, the following:
‘‘(27B) ‘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
estate 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;’’.
(h) LIMITATION.—Section 362 of title 11, United
States Code, is amended by adding at the end the follow-
ing:
‘‘(j) If 1 case commenced under chapter 7, 11, or 13
of this title is dismissed due to the creation of a debt re-
payment plan, then for purposes of section 362(c)(3) of
119
this title the subsequent case commenced under any such
chapter shall not be presumed to be filed not in good
faith.’’.
SEC. 303. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United
States Trustees, and Family Farmer Bankruptcy Act of
1986 (28 U.S.C. 581 note) is amended—
(1) in subparagraph (A), in the matter follow-
ing clause (ii), by striking ‘‘or October 1, 2002,
whichever occurs first’’; and
(2) in subparagraph (F)—
(A) in clause (i)—
(i) in subclause (II), by striking ‘‘or
October 1, 2002, whichever occurs first’’;
and
(ii) in the matter following subclause
(II), by striking ‘‘October 1, 2003, or’’;
and
(B) in clause (ii), in the matter following
subclause (II)—
(i) by striking ‘‘before October 1,
2003, or’’; and
(ii) by striking ‘‘, whichever occurs
first’’.
120
TITLE IV—SMALL BUSINESS
BANKRUPTCY PROVISIONS
SEC. 401. FLEXIBLE RULES FOR DISCLOSURE STATEMENT
AND PLAN.
Section 1125(f) of title 11, United States Code, is
amended to read as follows:
‘‘(f) Notwithstanding subsection (b), in a small busi-
ness case—
‘‘(1) in determining whether a disclosure state-
ment provides adequate information, the court shall
consider the complexity of the case, the benefit of
additional information to creditors and other parties
in interest, and the cost of providing additional in-
formation;
‘‘(2) the court may determine that the plan
itself provides adequate information and that a sepa-
rate disclosure statement is not necessary;
‘‘(3) the court may approve a disclosure state-
ment submitted on standard forms approved by the
court or adopted pursuant to section 2075 of title
28; and
‘‘(4)(A) the court may conditionally approve a
disclosure statement subject to final approval after
notice and a hearing;
121
‘‘(B) acceptances and rejections of a plan may
be solicited based on a conditionally approved disclo-
sure statement if the debtor provides adequate infor-
mation to each holder of a claim or interest that is
solicited, but a conditionally approved disclosure
statement shall be mailed not less than 20 days be-
fore the date of the hearing on confirmation of the
plan; and
‘‘(C) the hearing on the disclosure statement
may be combined with the hearing on confirmation
of a plan.’’.
SEC. 402. DEFINITIONS.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended by striking paragraph (51C) and
inserting the following:
‘‘(51C) ‘small business case’ means a case filed
under chapter 11 of this title in which the debtor is
a small business debtor;
‘‘(51D) ‘small business debtor’ means—
‘‘(A) a person (including affiliates of such
person that are also debtors under this title)
that has aggregate noncontingent, liquidated se-
cured and unsecured debts as of the date of the
petition or the order for relief in an amount not
more than $4,000,000 (excluding debts owed to
122
1 or more affiliates or insiders) a case in which
the United States trustee has appointed under
section 1102(a)(1) of this title a committee of
unsecured creditors that ‘the court has deter-
mined’ is sufficiently active and representative
to provide effective oversight of the debtor, ex-
cept that if a group of affiliated debtors has ag-
gregate noncontingent liquidated secured and
unsecured debts greater than $4,000,000 (ex-
cluding debt owed to 1 or more affiliates or in-
siders), then no member of such group is a
small business debtor;’’.
(b) EFFECT OF DISCHARGE.—Section 524 of title 11,
United States Code, as amended by section 402, is amend-
ed by adding at the end the following:
‘‘(k)(1) An individual who is injured by the willful
failure of a creditor to substantially comply with the re-
quirements specified in subsections (c) and (d), or by any
willful violation of the injunction operating under sub-
section (a)(2), shall be entitled to recover—
‘‘(A) the greater of—
‘‘(i) the amount of actual damages; or
‘‘(ii) $1,000; and
‘‘(B) costs and attorneys’ fees.
123
‘‘(2) An action to recover for a violation specified in
paragraph (1) may not be brought as a class action.’’.
(c) CONFORMING AMENDMENT.—Section 1102(a)(3)
of title 11, United States Code, is amended by inserting
‘‘debtor’’ after ‘‘small business’’.
SEC. 403. STANDARD FORM DISCLOSURE STATEMENT AND
PLAN.
The Advisory Committee on Bankruptcy Rules of the
Judicial Conference of the United States shall, within a
reasonable period of time after the date of the enactment
of this Act, propose for adoption standard form disclosure
statements and plans of reorganization for small business
debtors (as defined in section 101 of title 11, United
States Code, as amended by this Act), designed to achieve
a practical balance between—
(1) the reasonable needs of the courts, the
United States trustee, creditors, and other parties in
interest for reasonably complete information; and
(2) economy and simplicity for debtors.
SEC. 404. UNIFORM NATIONAL REPORTING REQUIRE-
MENTS.
(a) REPORTING REQUIRED.—(1) Title 11 of the
United States Code is amended by inserting after section
307 the following:
124
‘‘§ 308. Debtor reporting requirements
‘‘A small business debtor shall file periodic financial
and other reports containing information including—
‘‘(1) the debtor’s profitability, that is, approxi-
mately how much money the debtor has been earn-
ing or losing during current and recent fiscal peri-
ods;
‘‘(2) reasonable approximations of the debtor’s
projected cash receipts and cash disbursements over
a reasonable period;
‘‘(3) comparisons of actual cash receipts and
disbursements with projections in prior reports;
‘‘(4) whether the debtor is—
‘‘(A) in compliance in all material respects
with postpetition requirements imposed by this
title and the Federal Rules of Bankruptcy Pro-
cedure; and
‘‘(B) timely filing tax returns and paying
taxes and other administrative claims when due,
and, if not, what the failures are and how, at
what cost, and when the debtor intends to rem-
edy such failures; and
‘‘(5) such other matters as are in the best inter-
ests of the debtor and creditors, and in the public
interest in fair and efficient procedures under chap-
ter 11 of this title.’’.
125
(2) The table of sections of chapter 3 of title 11,
United States Code, is amended by inserting after the
item relating to section 307 the following:
‘‘308. Debtor reporting requirements.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect 60 days after the date on
which rules are prescribed pursuant to section 2075, title
28, United States Code to establish forms to be used to
comply with section 308 of title 11, United States Code,
as added by subsection (a).
SEC. 405. UNIFORM REPORTING RULES AND FORMS FOR
SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS.—The Advi-
sory Committee on Bankruptcy Rules of the Judicial Con-
ference of the United States shall propose for adoption
amended Federal Rules of Bankruptcy Procedure and Of-
ficial Bankruptcy Forms to be used by small business
debtors to file periodic financial and other reports contain-
ing information, including information relating to—
(1) the debtor’s profitability;
(2) the debtor’s cash receipts and disburse-
ments; and
(3) whether the debtor is timely filing tax re-
turns and paying taxes and other administrative
claims when due.
126
(b) PURPOSE.—The rules and forms proposed under
subsection (a) shall be designed to achieve a practical bal-
ance between—
(1) the reasonable needs of the bankruptcy
court, the United States trustee, creditors, and other
parties in interest for reasonably complete informa-
tion;
(2) the small business debtor’s interest that re-
quired reports be easy and inexpensive to complete;
and
(3) the interest of all parties that the required
reports help the small business debtor to understand
its financial condition and plan its future.
SEC. 406. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES IN CHAPTER 11 CASES.—Title 11 of the
United States Code is amended by inserting after section
1114 the following:
‘‘§ 1115. Duties of trustee or debtor in possession in
small business cases
‘‘In a small business case, a trustee or the debtor in
possession, in addition to the duties provided in this title
and as otherwise required by law, shall—
‘‘(1) append to the voluntary petition or, in an
involuntary case, file within 3 days after the date of
the order for relief—
127
‘‘(A) its most recent balance sheet, state-
ment of operations, cash-flow statement, Fed-
eral income tax return; or
‘‘(B) a statement made under penalty of
perjury that no balance sheet, statement of op-
erations, or cash-flow statement has been pre-
pared and no Federal tax return has been filed;
‘‘(2) attend, through its senior management
personnel and counsel, meetings scheduled by the
court or the United States trustee, including initial
debtor interviews, scheduling conferences, and meet-
ings of creditors convened under section 341 of this
title unless the court waives this requirement after
notice and hearing, upon a finding of extraordinary
and compelling circumstances;
‘‘(3) timely file all schedules and statements of
financial affairs, unless the court, after notice and a
hearing, grants an extension, which shall not extend
such time period to a date later than 30 days after
the date of the order for relief, absent extraordinary
and compelling circumstances;
‘‘(4) file all postpetition financial and other re-
ports required by the Federal Rules of Bankruptcy
Procedure or by local rule of the district court;
128
‘‘(5) subject to section 363(c)(2) of this title,
maintain insurance customary and appropriate to
the industry;
‘‘(6)(A) timely file tax returns;
‘‘(B) subject to section 363(c)(2) of this title,
timely pay all administrative expense tax claims, ex-
cept those being contested by appropriate proceed-
ings being diligently prosecuted; and
‘‘(C) subject to section 363(c)(2) of this title,
establish 1 or more separate deposit accounts not
later than 10 business days after the date of order
for relief (or as soon thereafter as possible if all
banks contacted decline the business) and deposit
therein, not later than 1 business day after receipt
thereof, all taxes payable for periods beginning after
the date the case is commenced that are collected or
withheld by the debtor for governmental units unless
the court waives this requirement after notice and
hearing, upon a finding of extraordinary and com-
pelling circumstances; and
‘‘(7) allow the United States trustee, or its des-
ignated representative, to inspect the debtor’s busi-
ness premises, books, and records at reasonable
times, after reasonable prior written notice, unless
notice is waived by the debtor.’’.
129
(b) TECHNICAL AMENDMENT.—The table of sections
of chapter 11, United States Code, is amended by insert-
ing after the item relating to section 1114 the following:
‘‘1115. Duties of trustee or debtor in possession in small business cases.’’.
SEC. 407. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121(e) of title 11, United States Code, is
amended to read as follows:
‘‘(e) In a small business case—
‘‘(1) only the debtor may file a plan until after
90 days after the date of the order for relief, unless
shortened on request of a party in interest made
during the 90-day period, or unless extended as pro-
vided by this subsection, after notice and hearing the
court, for cause, orders otherwise;
‘‘(2) the plan, and any necessary disclosure
statement, shall be filed not later than 90 days after
the date of the order for relief; and
‘‘(3) the time periods specified in paragraphs
(1) and (2), and the time fixed in section 1129(e)
of this title, within which the plan shall be confirmed
may be extended only if—
‘‘(A) the debtor, after providing notice to
parties in interest (including the United States
trustee), demonstrates by a preponderance of
the evidence that it is more likely than not that
131
SEC. 410. DUTIES OF THE UNITED STATES TRUSTEE.
(a) DUTIES OF THE UNITED STATES TRUSTEE.—
Section 586(a) of title 28, United States Code, is
amended—
(1) in paragraph (3)—
(A) in subparagraph (G) by striking ‘‘and’’
at the end;
(B) by redesignating subparagraph (H) as
subparagraph (I); and
(C) by inserting after subparagraph (G)
the following:
‘‘(H) in small business cases (as defined in
section 101 of title 11), performing the addi-
tional duties specified in title 11 pertaining to
such cases;’’;
(2) in paragraph (6) by striking ‘‘and’’ at the
end;
(3) in paragraph (7) by striking the period at
the end and inserting ‘‘; and’’; and
(4) by inserting after paragraph (7) the follow-
ing:
‘‘(8) in each of such small business cases—
‘‘(A) conduct an initial debtor interview as
soon as practicable after the entry of order for
relief but before the first meeting scheduled
under section 341(a) of title 11 at which time
132
the United States trustee shall begin to inves-
tigate the debtor’s viability, inquire about the
debtor’s business plan, explain the debtor’s obli-
gations to file monthly operating reports and
other required reports, attempt to develop an
agreed scheduling order, and inform the debtor
of other obligations;
‘‘(B) when determined to be appropriate
and advisable, visit the appropriate business
premises of the debtor and ascertain the state
of the debtor’s books and records and verify
that the debtor has filed its tax returns; and
‘‘(C) review and monitor diligently the
debtor’s activities, to identify as promptly as
possible whether the debtor will be unable to
confirm a plan; and
‘‘(9) in cases in which the United States trustee
finds material grounds for any relief under section
1112 of title 11, the United States trustee shall
apply promptly to the court for relief.’’.
SEC. 411. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is
amended—
(1) in the matter preceding paragraph (1) by
striking ‘‘, may’’;
133
(2) by amending paragraph (1) to read as fol-
lows:
‘‘(1) shall hold such status conferences as are
necessary to further the expeditious and economical
resolution of the case; and’’; and
(3) in paragraph (2) by striking ‘‘unless incon-
sistent with another provision of this title or with
applicable Federal Rules of Bankruptcy Procedure,’’
and inserting ‘‘may’’.
SEC. 412. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is
amended—
(1) in subsection (i) as so redesignated by sec-
tion 124—
(A) by striking ‘‘An’’ and inserting ‘‘(1)
Except as provided in paragraph (2), an’’; and
(B) by adding at the end the following:
‘‘(2) If such violation is based on an action taken by
an entity in the good-faith belief that subsection (h) ap-
plies to the debtor, then recovery under paragraph (1)
against such entity shall be limited to actual damages.’’;
and
(2) by inserting after subsection (i), as redesig-
nated by section 124, the following:
134
‘‘(j) The filing of a petition under chapter 11 of this
title operates as a stay of the acts described in subsection
(a) only in an involuntary case involving no collusion by
the debtor with creditors and in which the debtor—
‘‘(1) is a debtor in a small business case pend-
ing at the time the petition is filed;
‘‘(2) was a debtor in a small business case
which was dismissed for any reason by an order that
became final in the 2-year period ending on the date
of the order for relief entered with respect to the pe-
tition;
‘‘(3) was a debtor in a small business case in
which a plan was confirmed in the 2-year period
ending on the date of the order for relief entered
with respect to the petition; or
‘‘(4) is an entity that has succeeded to substan-
tially all of the assets or business of a small business
debtor described in subparagraph (A), (B), or (C);
unless the debtor proves, by a preponderance of the
evidence, that the filing of such petition resulted
from circumstances beyond the control of the debtor
not foreseeable at the time the case then pending
was filed; and that it is more likely than not that
the court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable time.’’.
135
SEC. 413. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION.—Section 1112(b) of title 11, United States
Code, is amended to read as follows:
‘‘(b)(1) Except as provided in paragraph (2), in sub-
section (c), and in section 1104(a)(3) of this title, on re-
quest of a party in interest, and after notice and a hear-
ing, the court shall convert a case under this chapter to
a case under chapter 7 of this title or dismiss a case under
this chapter, whichever is in the best interest of creditors
and the estate, if the movant establishes cause.
‘‘(2) The relief provided in paragraph (1) shall not
be granted if the debtor or another party in interest ob-
jects and establishes, by a preponderance of the evidence
that—
‘‘(A) it is more likely than not that a plan will
be confirmed within a time as fixed by this title or
by order of the court entered pursuant to section
1121(e)(3), or within a reasonable time if no time
has been fixed; and
‘‘(B) if the reason is an act or omission of the
debtor that—
‘‘(i) there exists a reasonable justification
for the act or omission; and
136
‘‘(ii) the act or omission will be cured with-
in a reasonable time fixed by the court not to
exceed 30 days after the court decides the mo-
tion, unless the movant expressly consents to a
continuance for a specific period of time, or
compelling circumstances beyond the control of
the debtor justify an extension.
‘‘(3) For purposes of this subsection, cause
includes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate;
‘‘(B) gross mismanagement of the estate;
‘‘(C) failure to maintain appropriate insurance;
‘‘(D) unauthorized use of cash collateral harm-
ful to 1 or more creditors;
‘‘(E) failure to comply with an order of the
court;
‘‘(F) failure timely to satisfy any filing or re-
porting requirement established by this title or by
any rule applicable to a case under this chapter;
‘‘(G) failure to attend the meeting of creditors
convened under section 341(a) of this title or an ex-
amination ordered under rule 2004 of the Federal
Rules of Bankruptcy Procedure;
137
‘‘(H) failure timely to provide information or
attend meetings reasonably requested by the United
States trustee;
‘‘(I) failure timely to pay taxes due after the
date of the order for relief or to file tax returns due
after the order for relief;
‘‘(J) failure to file a disclosure statement, or to
file or confirm a plan, within the time fixed by this
title or by order of the court;
‘‘(K) failure to pay any fees or charges required
under chapter 123 of title 28;
‘‘(L) revocation of an order of confirmation
under section 1144 of this title;
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan;
‘‘(N) material default by the debtor with re-
spect to a confirmed plan; and
‘‘(O) termination of a plan by reason of the oc-
currence of a condition specified in the plan.
‘‘(4) The court shall commence the hearing on any
motion under this subsection not later than 30 days after
filing of the motion, and shall decide the motion within
15 days after commencement of the hearing, unless the
movant expressly consents to a continuance for a specific
period of time or compelling circumstances prevent the
138
court from meeting the time limits established by this
paragraph.’’.
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF
TRUSTEE.—Section 1104(a) of title 11, United States
Code, is amended—
(1) in paragraph (1) by striking ‘‘or’’ at the
end;
(2) in paragraph (2) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(3) if grounds exist to convert or dismiss the
case under section 1112 of this title, but the court
determines that the appointment of a trustee is in
the best interests of creditors and the estate.’’.
SEC. 414. STUDY OF OPERATION OF TITLE 11 OF THE
UNITED STATES CODE WITH RESPECT TO
SMALL BUSINESSES.
Not later than 2 years after the date of the enact-
ment of this Act, the Administrator of the Small Business
Administration, in consultation with the Attorney General,
the Director of the Administrative Office of United States
Trustees, and the Director of the Administrative Office
of the United States Courts, shall—
(1) conduct a study to determine—
139
(A) the internal and external factors that
cause small businesses, especially sole propri-
etorships, to become debtors in cases under title
11 of the United States Code and that cause
certain small businesses to successfully com-
plete cases under chapter 11 of such title; and
(B) how Federal laws relating to bank-
ruptcy may be made more effective and efficient
in assisting small businesses to remain viable;
and
(2) submit to the President pro tempore of the
Senate and the Speaker of the House of Representa-
tives a report summarizing that study.
SEC. 415. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is
amended—
(1) by inserting ‘‘or 30 days after the court de-
termines that the debtor is subject to this para-
graph, whichever is later’’ after ‘‘90-day period)’’;
and
(2) by amending subparagraph (B) to read as
follows:
‘‘(B) the debtor has commenced monthly
payments (which payments may, in the debtor’s
sole 
discretion, 
notwithstanding 
section
140
363(c)(2) of this title, be made from rents or
other income generated before or after the com-
mencement of the case by or from the property)
to each creditor whose claim is secured by such
real estate (other than a claim secured by a
judgment lien or by an unmatured statutory
lien), which payments are in an amount equal
to interest at the then-applicable nondefault
contract rate of interest on the value of the
creditor’s interest in the real estate; or’’.
TITLE V—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI-
TION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States
Code, is amended by inserting ‘‘notwithstanding section
301(b)’’ before the period at the end.
(b) CONFORMING AMENDMENT.—Section 301 of title
11, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’;
and
(2) by amending the last sentence to read as
follows:
141
‘‘(b) The commencement of a voluntary case under
a chapter of this title constitutes an order for relief under
such chapter.’’.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP-
TER 9.
Section 901 of title 11, United States Code, is
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and
(2) by inserting ‘‘559, 560,’’ after ‘‘557,’’.
TITLE VI—STREAMLINING THE
BANKRUPTCY SYSTEM
SEC. 601. CREDITOR REPRESENTATION AT FIRST MEETING
OF CREDITORS.
Section 341(c) of title 11, United States Code, is
amended by inserting after the first sentence the follow-
ing: ‘‘Notwithstanding any local court rule, provision of
a State constitution, any other Federal or State law that
is not a bankruptcy law, or other requirement that rep-
resentation at the meeting of creditors under subsection
(a) be by an attorney, a creditor holding a consumer debt
or any representative of the creditor (which may include
an entity or an employee of an entity and may be a rep-
resentative for more than one creditor) shall be permitted
to appear at and participate in the meeting of creditors
in a case under chapter 7 or 13, either alone or in conjunc-
142
tion with an attorney for the creditor. Nothing in this sub-
section shall be construed to require any creditor to be
represented by an attorney at any meeting of creditors.’’.
SEC. 602. AUDIT PROCEDURES.
(a) AMENDMENTS.—Section 586 of title 28, United
States Code, is amended—
(1) in subsection (a) by amending striking
paragraph (6) to read as follows:
‘‘(6) make such reports as the Attorney General
directs, including the results of audits performed
under subsection (f); and’’; and
(2) by adding at the end the following:
‘‘(f)(1)(A) The Attorney General shall establish pro-
cedures to determine the accuracy, veracity, and complete-
ness of petitions, schedules, and other information which
the debtor is required to provide under sections 521 and
1322 of title 11, and, if applicable, section 111 of title
11, in individual cases filed under chapter 7 or 13 of such
title. Such audits shall be in accordance with generally ac-
cepted auditing standards and performed by independent
certified public accountants or independent licensed public
accountants.
‘‘(B) Those procedures shall—
143
‘‘(i) establish a method of selecting appropriate
qualified persons to contract to perform those au-
dits;
‘‘(ii) establish a method of randomly selecting
cases to be audited, except that not less than 1 out
of every 250 cases in each Federal judicial district
shall be selected for audit;
‘‘(iii) require audits for schedules of income and
expenses 
which 
reflect 
greater 
than 
average
variances from the statistical norm of the district in
which the schedules were filed; and
‘‘(iv) establish procedures for providing, not less
frequently than annually, public information con-
cerning the aggregate results of such audits includ-
ing the percentage of cases, by district, in which a
material misstatement of income or expenditures is
reported.
‘‘(2) The United States trustee for each district is
authorized to contract with auditors to perform audits in
cases designated by the United States trustee according
to the procedures established under paragraph (1).
‘‘(3)(A) The report of each audit conducted under
this subsection shall be filed with the court and transmit-
ted to the United States trustee. Each report shall clearly
and conspicuously specify any material misstatement of
144
income or expenditures or of assets identified by the per-
son performing the audit. In any case where a material
misstatement of income or expenditures or of assets has
been reported, the clerk of the bankruptcy court shall give
notice of the misstatement to the creditors in the case.
‘‘(B) If a material misstatement of income or expend-
itures or of assets is reported, the United States trustee
shall—
‘‘(i) report the material misstatement, if appro-
priate, to the United States Attorney pursuant to
section 3057 of title 18, United States Code; and
‘‘(ii) if advisable, take appropriate action, in-
cluding but not limited to commencing an adversary
proceeding to revoke the debtor’s discharge pursuant
to section 727(d) of title 11, United States Code.’’.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11,
U.S.C.—Section 521(a) of title 11, United States Code,
as amended by section 604, is amended in paragraphs (3)
and (4) by adding ‘‘or an auditor appointed pursuant to
section 586 of title 28, United States Code’’ after ‘‘serving
in the case’’.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11,
U.S.C.—Section 727(d) of title 11, United States Code,
is amended—
145
(1) by deleting ‘‘or’’ at the end of paragraph
(2);
(2) by substituting ‘‘; or’’ for the period at the
end of paragraph (3); and
(3) by adding the following at the end the fol-
lowing:
‘‘(4) 
the 
debtor 
has 
failed 
to 
explain
satisfactorily—
‘‘(A) a material misstatement in an audit
performed pursuant to section 586(f) of title
28, United States Code; or
‘‘(B) a failure to make available for inspec-
tion all necessary accounts, papers, documents,
financial records, files, and all other papers,
things, or property belonging to the debtor that
are requested for an audit conducted pursuant
to section 586(f) of title 28, United States
Code.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
enactment of this Act.
SEC. 603. GIVING CREDITORS FAIR NOTICE IN CHAPTER 7
AND 13 CASES.
(a) NOTICE.—Section 342 of title 11, United States
Code, is amended—
146
(1) in subsection (c)—
(A) by striking ‘‘, but the failure of such
notice to contain such information shall not in-
validate the legal effect of such notice’’; and
(B) by adding the following at the end:
‘‘If the credit agreement between the debtor and the credi-
tor or the last communication before the filing of the peti-
tion in a voluntary case from the creditor to a debtor who
is an individual states an account number of the debtor
which is the current account number of the debtor with
respect to any debt held by the creditor against the debtor,
the debtor shall include such account number in any notice
to the creditor required to be given under this title. If the
creditor has specified to the debtor an address at which
the creditor wishes to receive correspondence regarding
the debtor’s account, any notice to the creditor required
to be given by the debtor under this title shall be given
at such address. For the purposes of this section, ‘notice’
shall include, but shall not be limited to, any correspond-
ence from the debtor to the creditor after the commence-
ment of the case, any statement of the debtor’s intention
under section 521(a)(2) of this title, notice of the com-
mencement of any proceeding in the case to which the
creditor is a party, and any notice of the hearing under
section 1324 of this title.’’;
147
(2) by adding at the end the following:
‘‘(d) At any time, a creditor in a case of an individual
debtor under chapter 7 or 13 may file with the court and
serve on the debtor a notice of the address to be used to
notify the creditor in that case. Five days after receipt
of such notice, if the court or the debtor is required to
give the creditor notice, such notice shall be given at that
address.
‘‘(e) An entity may file with the court a notice stating
its address for notice in cases under chapters 7 and 13.
After 30 days following the filing of such notice, any notice
in any case filed under chapter 7 or 13 given by the court
shall be to that address unless specific notice is given
under subsection (d) with respect to a particular case.
‘‘(f) Notice given to a creditor other than as provided
in this section shall not be effective notice until it has been
brought to the attention of the creditor. If the creditor
has designated a person or department to be responsible
for receiving notices concerning bankruptcy cases and has
established reasonable procedures so that bankruptcy no-
tices received by the creditor will be delivered to such de-
partment or person, notice will not be brought to the at-
tention of the creditor until received by such person or
department. No sanction under section 362(h) of this title
or any other sanction which a court may impose on ac-
148
count of violations of the stay under section 362(a) of this
title or failure to comply with section 542 or 543 of this
title may be imposed on any action of the creditor unless
the action takes place after the creditor has received notice
of the commencement of the case effective under this sec-
tion.’’.
(b) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 121, 604,
122, 301, and 302, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘The debtor
shall—’’;
(2) by striking paragraph (1) and inserting the
following:
‘‘(1) file—
‘‘(A) a list of creditors; and
‘‘(B) unless the court orders otherwise—
‘‘(i) a schedule of assets and liabil-
ities;
‘‘(ii) a schedule of current income and
current expenditures;
‘‘(iii) a statement of the debtor’s fi-
nancial affairs and, if applicable, a
certificate—
‘‘(I) of an attorney whose name
is on the petition as the attorney for
149
the debtor or any bankruptcy petition
preparer signing the petition pursuant
to section 110(b)(1) of this title indi-
cating that such attorney or bank-
ruptcy petition preparer delivered to
the debtor any notice required by sec-
tion 342(b) of this title; or
‘‘(II) if no attorney for the debt-
or is indicated and no bankruptcy pe-
tition preparer signed the petition, of
the debtor that such notice was ob-
tained and read by the debtor;
‘‘(iv) copies of any Federal tax re-
turns, including any schedules or attach-
ments, filed by the debtor for the 3-year
period preceding the order for relief;
‘‘(v) copies of all payment advices or
other evidence of payment, if any, received
by the debtor from any employer of the
debtor in the period 60 days prior to the
filing of the petition;
‘‘(vi) a statement of the amount of
projected monthly net income, itemized to
show how calculated; and
150
‘‘(vii) a statement disclosing any rea-
sonably anticipated increase in income or
expenditures over the 12-month period fol-
lowing the date of filing;’’; and
(3) by adding at the end the following:
‘‘(e)(1) At any time, a creditor, in the case of an indi-
vidual under chapter 7 or 13, may file with the court no-
tice that the creditor requests the petition, schedules, and
a statement of affairs filed by the debtor in the case and
the court shall make those documents available to the
creditor who requests those documents.
‘‘(2) At any time, a creditor in a case under chapter
13 may file with the court notice that the creditor requests
the plan filed by the debtor in the case, and the court
shall make such plan available to the creditor who requests
such plan at a reasonable cost and not later than 5 days
after such request.
‘‘(f) An individual debtor in a case under chapter 7
or 13 shall file with the court—
‘‘(1) at the time filed with the taxing authority,
all tax returns, including any schedules or attach-
ments, with respect to the period from the com-
mencement of the case until such time as the case
is closed;
151
‘‘(2) at the time filed with the taxing authority,
all tax returns, including any schedules or attach-
ments, that were not filed with the taxing authority
when the schedules under subsection (a)(1) were
filed with respect to the period that is 3 years before
the order for relief;
‘‘(3) any amendments to any of the tax returns,
including schedules or attachments, described in
paragraph (1) or (2); and
‘‘(4) in a case under chapter 13, a statement
subject to the penalties of perjury by the debtor of
the debtor’s income and expenditures in the preced-
ing tax year and monthly income, that shows how
the amounts are calculated—
‘‘(A) beginning on the date that is the
later of 90 days after the close of the debtor’s
tax year or 1 year after the order for relief, un-
less a plan has been confirmed; and
‘‘(B) thereafter, on or before the date that
is 45 days before each anniversary of the con-
firmation of the plan until the case is closed.
‘‘(d)(1) A statement referred to in subsection (c)(4)
shall disclose—
‘‘(A) the amount and sources of income of the
debtor;
152
‘‘(B) the identity of any persons responsible
with the debtor for the support of any dependents of
the debtor; and
‘‘(C) the identity of any persons who contrib-
uted, and the amount contributed, to the household
in which the debtor resides.
‘‘(2) The tax returns, amendments, and statement of
income and expenditures described in paragraph (1) shall
be available to the United States trustee, any bankruptcy
administrator, any trustee, and any party in interest for
inspection and copying, subject to the requirements of
subsection (e).
‘‘(g)(1) Not later than 30 days after the date of en-
actment of the Consumer Bankruptcy Reform Act of
1999, the Director of the Administrative Office of the
United States Courts shall establish procedures for safe-
guarding the confidentiality of any tax information re-
quired to be provided under this section.
‘‘(2) The procedures under paragraph (1) shall in-
clude restrictions on creditor access to tax information
that is required to be provided under this section.
‘‘(3) Not later than 1 year after the date of enact-
ment of the Consumer Bankruptcy Reform Act of 1999,
the Director of the Administrative Office of the United
153
States Courts shall prepare, and submit to Congress a re-
port that—
‘‘(A) assesses the effectiveness of the proce-
dures under paragraph (1); and
‘‘(B) 
if 
appropriate, 
includes 
proposed
legislation—
‘‘(i) to further protect the confidentiality of
tax information; and
‘‘(ii) to provide penalties for the improper
use by any person of the tax information re-
quired to be provided under this section.
‘‘(h) If requested by the United States trustee or a
trustee serving in the case, the debtor provide a document
that establishes the identity of the debtor, including a
driver’s license, passport, or other document that contains
a photograph of the debtor and such other personal identi-
fying information relating to the debtor that establishes
the identity of the debtor.’’.
SEC. 604. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED-
ULES OR PROVIDE REQUIRED INFORMATION.
Section 521 of title 11, United States Code, is
amended—
(1) by inserting ‘‘(a)’’ before ‘‘The debtor’’; and
(2) by adding at the end the following:
154
‘‘(b)(1) Notwithstanding section 707(a) of this title,
and subject to paragraph (2), if an individual debtor in
a voluntary case under chapter 7 or 13 fails to file all
of the information required under subsection (a)(1) within
45 days after the filing of the petition commencing the
case, the case shall be automatically dismissed effective
on the 46th day after the filing of the petition.
‘‘(2) With respect to a case described in paragraph
(1), any party in interest may request the court to enter
an order dismissing the case. The court shall, if so re-
quested, enter an order of dismissal not later than 5 days
after such request.
‘‘(3) Upon request of the debtor made within 45 days
after the filing of the petition commencing a case de-
scribed in paragraph (1), the court may allow the debtor
an additional period of not to exceed 45 days to file the
information required under subsection (a)(1) if the court
finds justification for extending the period for the filing.’’.
SEC. 605. ADEQUATE TIME TO PREPARE FOR HEARING ON
CONFIRMATION OF THE PLAN.
(a) HEARING.—Section 1324 of title 11, United
States Code, is amended—
(1) by striking ‘‘After’’ and inserting the follow-
ing:
155
‘‘(a) Except as provided in subsection (b) and after’’;
and
(2) by adding at the end the following:
‘‘(b) The hearing on confirmation of the plan may
be held not earlier than 20 days, and not later than 45
days, after the meeting of creditors under section 341(a)
of this title.’’.
(b) FILING
OF PLAN.—Section 1321 of title 11,
United States Code, is amended to read as follows:
‘‘§ 1321. Filing of plan
‘‘The debtor shall file a plan not later than 90 days
after the order for relief under this chapter, except that
the court may extend such period if the need for an exten-
sion is attributable to circumstances for which the debtor
should not justly be held accountable.’’.
SEC. 606. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION
IN CERTAIN CASES.
Title 11, United States Code, is amended—
(1) by amending section 1322(d) to read as fol-
lows:
‘‘(d) If the current monthly total income of the debtor
and in a joint case, the debtor and the debtor’s spouse
combined, is not less than the highest national median
family income reported for a family of equal or lesser size
or, in the case of a household of 1 person, not less than
156
the national median household income for 1 earner, the
plan may not provide for payments over a period that is
longer than 5 years. If the current monthly total income
of the debtor or in a joint case, the debtor and the debtor’s
spouse combined, is less than the highest national median
family income reported for a family of equal or lesser size,
or in the case of a household of 1 person less than the
national median household income for 1 earner, the plan
may not provide for payments over a period that is longer
than 3 years, unless the court, for cause, approves a longer
period, but the court may not approve a period that is
longer than 5 years.’’; and
(2) in section 1329—
(A) by striking in subsection (c) ‘‘three
years’’ and inserting ‘‘the applicable commit-
ment period under section 1325(b)(1)(B)(ii)’’;
and
(B) by inserting at the end of subsection
(c) the following:
‘‘The duration period shall be 5 years if the current
monthly total income of the debtor, and in a joint case,
the debtor and the debtor’s spouse combined, is not less
than the highest national median family income reported
for a family of equal or lesser size or, in the case of a
household of 1 person, not less than the national median
157
household income for 1 earner, as of the date of the modi-
fication and shall be 3 years if the current monthly total
income is less than the highest national median family in-
come reported for a family of equal or lesser size or, in
the case of a household of 1 person, less than the national
median household income for 1 earner as of the date of
the modification.’’.
SEC. 607. SENSE OF THE CONGRESS REGARDING EXPAN-
SION OF RULE 9011 OF THE FEDERAL RULES
OF BANKRUPTCY PROCEDURE.
It is the sense of the Congress that rule 9011 of the
Federal Rules of Bankruptcy Procedure (11 U.S.C. App)
should be modified to include a requirement that all docu-
ments (including schedules), signed and unsigned, submit-
ted to the court or to a trustee by debtors who represent
themselves and debtors who are represented by an attor-
ney be submitted only after the debtor or the debtor’s at-
torney has made reasonable inquiry to verify that the in-
formation contained in such documents is well grounded
in fact, and is warranted by existing law or a good-faith
argument for the extension, modification, or reversal of
existing law.
158
SEC. 608. ELIMINATION OF CERTAIN FEES PAYABLE IN
CHAPTER 11 BANKRUPTCY CASES.
(a) AMENDMENTS.—Section 1930(a)(6) of title 28,
United States Code, is amended—
(1) in the 1st sentence by striking ‘‘until the
case is converted or dismissed, whichever occurs
first’’; and
(2) in the 2d sentence—
(A) by striking ‘‘The’’ and inserting ‘‘Until
the plan is confirmed or the case is converted
(whichever occurs first) the’’; and
(B) by striking ‘‘less than $300,000;’’ and
inserting ‘‘less than $300,000. Until the case is
converted, dismissed, or closed (whichever oc-
curs first and without regard to confirmation of
the plan) the fee shall be’’.
(b) DELAYED EFFECTIVE DATE.—The amendments
made by subsection (a) shall take effect on October 1,
1999.
SEC. 609. STUDY OF BANKRUPTCY IMPACT OF CREDIT EX-
TENDED TO DEPENDENT STUDENTS.
Not later than 1 year after the date of the enactment
of this Act, the Comptroller General of the United States
shall—
(1) conduct a study regarding the impact that
the extension of credit to individuals who are—
159
(A) claimed as dependents for purposes of
the Internal Revenue Code of 1986; and
(B) enrolled in post-secondary educational
institutions,
has on the rate of cases filed under title 11 of the
United States Code; and
(2) submit to the Speaker of the House of Rep-
resentatives and the President pro tempore of the
Senate a report summarizing such study.
SEC. 610. PROMPT RELIEF FROM STAY IN INDIVIDUAL
CASES.
Section 362(e) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(e)’’; and
(2) by adding at the end the following:
‘‘(2) Notwithstanding paragraph (1), in the case of
an individual filing under chapter 7, 11, or 13, the stay
under subsection (a) shall terminate on the date that is
60 days after a request is made by a party in interest
under subsection (d), unless—
‘‘(A) a final decision is rendered by the court
during the 60-day period beginning on the date of
the request; or
‘‘(B) that 60-day period is extended—
160
‘‘(i) by agreement of all parties in interest;
or
‘‘(ii) by the court for such specific period
of time as the court finds is required by for
good cause as described in findings made by the
court.’’.
SEC. 611. 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)—
(A) by striking ‘‘in the converted case,
with allowed secured claims’’ and inserting
‘‘only in a case converted to chapter 11 or 12
but not in a case converted to 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—
161
‘‘(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 chapter 13 proceeding; and
‘‘(ii) unless a prebankruptcy default has
been fully cured pursuant to the plan at the
time of conversion, in any proceeding under this
title or otherwise, the default shall have the ef-
fect given under applicable nonbankruptcy
law.’’.
TITLE VII—BANKRUPTCY DATA
SEC. 701. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT.—Chapter 6 of part I of title 28,
United States Code, is amended by adding at the end the
following:
‘‘§ 159. Bankruptcy statistics
‘‘(a) The clerk of each district shall compile statistics
regarding individual debtors with primarily consumer
debts seeking relief under chapters 7, 11, and 13 of title
11. Those statistics shall be in a form prescribed by the
162
Director of the Administrative Office of the United States
Courts (referred to in this section as the ‘Office’).
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a);
‘‘(2) make the statistics available to the public;
and
‘‘(3) not later than October 31, 1999, and an-
nually thereafter, prepare, and submit to Congress a
report concerning the information collected under
subsection (a) that contains an analysis of the infor-
mation.
‘‘(c) The compilation required under subsection (b)
shall—
‘‘(1) be itemized, by chapter, with respect to
title 11;
‘‘(2) be presented in the aggregate and for each
district; and
‘‘(3) include information concerning—
‘‘(A) the total assets and total liabilities of
the debtors described in subsection (a), and in
each category of assets and liabilities, as re-
ported in the schedules prescribed pursuant to
section 2075 of this title and filed by those
debtors;
163
‘‘(B) the current total monthly income,
projected monthly net income, and average in-
come and average expenses of those debtors as
reported on the schedules and statements that
each such debtor files under sections 111, 521,
and 1322 of title 11;
‘‘(C) the aggregate amount of debt dis-
charged in the reporting period, determined as
the difference between the total amount of debt
and obligations of a debtor reported on the
schedules and the amount of such debt reported
in categories which are predominantly non-
dischargeable;
‘‘(D) the average period of time between
the filing of the petition and the closing of the
case;
‘‘(E) for the reporting period—
‘‘(i) the number of cases in which a
reaffirmation was filed; and
‘‘(ii)(I) the total number of reaffirma-
tions filed;
‘‘(II) of those cases in which a reaffir-
mation was filed, the number in which the
debtor was not represented by an attorney;
and
164
‘‘(III) of those cases, the number of
cases in which the reaffirmation was ap-
proved by the court;
‘‘(F) with respect to cases filed under
chapter 13 of title 11, for the reporting
period—
‘‘(i)(I) the number of cases in which a
final order was entered determining the
value of property securing a claim in an
amount less than the amount of the claim;
and
‘‘(II) the number of final orders deter-
mining the value of property securing a
claim issued;
‘‘(ii) the number of cases dismissed
for failure to make payments under the
plan; and
‘‘(iii) the number of cases in which
the debtor filed another case within the 6
years previous to the filing;
‘‘(G) the number of cases in which credi-
tors were fined for misconduct and any amount
of punitive damages awarded by the court for
creditor misconduct; and
165
‘‘(H) the number of cases in which sanc-
tions under rule 9011 of the Federal Rules of
Bankruptcy Procedure were imposed against
debtor’s counsel and damages awarded under
such Rule.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 6 of title 28, United States
Code, is amended by adding at the end the following:
‘‘159. Bankruptcy statistics.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect 18 months after the date of
enactment of this Act.
SEC. 702. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA.
(a) AMENDMENT.—Title 28 of the United States
Code is amended by inserting after section 589a the fol-
lowing:
‘‘§ 589b. Bankruptcy data
‘‘(a) RULES.—The Attorney General shall, within a
reasonable time after the effective date of this section,
issue rules requiring uniform forms for (and from time
to time thereafter to appropriately modify and approve)—
‘‘(1) final reports by trustees in cases under
chapters 7, 12, and 13 of title 11; and
166
‘‘(2) periodic reports by debtors in possession or
trustees, as the case may be, in cases under chapter
11 of title 11.
‘‘(b) REPORTS.—All reports referred to in subsection
(a) shall be designed (and the requirements as to place
and manner of filing shall be established) so as to facili-
tate compilation of data and maximum possible access of
the public, both by physical inspection at 1 or more central
filing locations, and by electronic access through the Inter-
net or other appropriate media.
‘‘(c) REQUIRED INFORMATION.—The information re-
quired to be filed in the reports referred to in subsection
(b) shall be that which is in the best interests of debtors
and creditors, and in the public interest in reasonable and
adequate information to evaluate the efficiency and practi-
cality of the Federal bankruptcy system. In issuing rules
proposing the forms referred to in subsection (a), the At-
torney General shall strike the best achievable practical
balance between—
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; and
‘‘(2) economy, simplicity, and lack of undue
burden on persons with a duty to file reports.
167
‘‘(d) FINAL REPORTS.—Final reports proposed for
adoption by trustees under chapters 7, 12, and 13 of title
11 shall, in addition to such other matters as are required
by law or as the Attorney General in the discretion of the
Attorney General, shall propose, include with respect to
a case under such title—
‘‘(1) information about the length of time the
case was pending;
‘‘(2) assets abandoned;
‘‘(3) assets exempted;
‘‘(4) receipts and disbursements of the estate;
‘‘(5) expenses of administration;
‘‘(6) claims asserted;
‘‘(7) claims allowed; and
‘‘(8) distributions to claimants and claims dis-
charged without payment,
in each case by appropriate category and, in cases under
chapters 12 and 13 of title 11, date of confirmation of
the plan, each modification thereto, and defaults by the
debtor in performance under the plan.
‘‘(e) PERIODIC REPORTS.—Periodic reports proposed
for adoption by trustees or debtors in possession under
chapter 11 of title 11 shall, in addition to such other mat-
ters as are required by law or as the Attorney General,
168
in the discretion of the Attorney General, shall propose,
include—
‘‘(1) information about the standard industry
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor;
‘‘(2) length of time the case has been pending;
‘‘(3) number of full-time employees as at the
date of the order for relief and at end of each re-
porting period since the case was filed;
‘‘(4) cash receipts, cash disbursements and
profitability of the debtor for the most recent period
and cumulatively since the date of the order for re-
lief;
‘‘(5) compliance with title 11, whether or not
tax returns and tax payments since the date of the
order for relief have been timely filed and made;
‘‘(6) all professional fees approved by the court
in the case for the most recent period and cumula-
tively since the date of the order for relief (sepa-
rately reported, in for the professional fees incurred
by or on behalf of the debtor, between those that
would have been incurred absent a bankruptcy case
and those not); and
‘‘(7) plans of reorganization filed and confirmed
and, with respect thereto, by class, the recoveries of
169
the holders, expressed in aggregate dollar values
and, in the case of claims, as a percentage of total
claims of the class allowed.’’.
(b) TECHNICAL AMENDMENT.—The table of sections
of chapter 39 of title 28, United States Code, is amended
by adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 703. SENSE OF THE CONGRESS REGARDING AVAIL-
ABILITY OF BANKRUPTCY DATA.
It is the sense of the Congress that—
(1) the national policy of the United States
should be that all data held by bankruptcy clerks in
electronic form, to the extent such data reflects only
public records (as defined in section 107 of title 11
of the United States Code), should be released in a
usable electronic form in bulk to the public subject
to such appropriate privacy concerns and safeguards
as the Judicial Conference of the United States may
determine; and
(2) there should be established a bankruptcy
data system in which—
(A) a single set of data definitions and
forms are used to collect data nationwide; and
(B) data for any particular bankruptcy
case are aggregated in the same electronic
record.
170
TITLE VIII—BANKRUPTCY TAX
PROVISIONS
SEC. 801. TREATMENT OF CERTAIN LIENS.
(a) TREATMENT OF CERTAIN LIENS.—Section 724
of title 11, United States Code, is amended—
(1) in subsection (b), in the matter preceding
paragraph (1), by inserting ‘‘(other than to the ex-
tent that there is a properly perfected unavoidable
tax lien arising in connection with an ad valorem tax
on real or personal property of the estate)’’ after
‘‘under this title’’;
(2) in subsection (b)(2), after ‘‘507(a)(1)’’, in-
sert ‘‘(except that such expenses, other than claims
for wages, salaries, or commissions which arise after
the filing of a petition, shall be limited to expenses
incurred under chapter 7 of this title and shall not
include expenses incurred under chapter 11 of this
title)’’; and
(3) by adding at the end the following:
‘‘(e) Before subordinating a tax lien on real or per-
sonal property of the estate, the trustee shall—
‘‘(1) exhaust the unencumbered assets of the
estate; and
‘‘(2) in a manner consistent with section 506(c)
of this title, recover from property securing an al-
171
lowed secured claim the reasonable, necessary costs
and expenses of preserving or disposing of that prop-
erty.
‘‘(f) Notwithstanding the exclusion of ad valorem tax
liens set forth in this section and subject to the require-
ments of subsection (e)—
‘‘(1) claims for wages, salaries, and commis-
sions that are entitled to priority under section
507(a)(3) of this title; or
‘‘(2) claims for contributions to an employee
benefit plan entitled to priority under section
507(a)(4) of this title,
may be paid from property of the estate which secures
a tax lien, or the proceeds of such property.’’.
(b) DETERMINATION OF TAX LIABILITY.—Section
505(a)(2) of title 11, United States Code, is amended—
(1) in subparagraph (A), by striking ‘‘or’’ at
the end;
(2) in subparagraph (B), by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount
172
under any law (other than a bankruptcy law) has
expired.’’.
SEC. 802. EFFECTIVE NOTICE TO GOVERNMENT.
(a) 
EFFECTIVE
NOTICE
TO
GOVERNMENTAL
UNITS.—Section 342 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(d) If a debtor lists a governmental unit as a credi-
tor in a list or schedule, any notice required to be given
by the debtor under this title, any rule, any applicable law,
or any order of the court, shall identify the department,
agency, or instrumentality through which the debtor is in-
debted. The debtor shall identify (with information such
as a taxpayer identification number, loan, account or con-
tract number, or real estate parcel number, where applica-
ble), and describe the underlying basis for the govern-
mental unit’s claim. If the debtor’s liability to a govern-
mental unit arises from a debt or obligation owed or in-
curred by another individual, entity, or organization, or
under a different name, the debtor shall identify such indi-
vidual, entity, organization, or name.
‘‘(e) The clerk shall keep and update quarterly, in
the form and manner as the Director of the Administra-
tive Office of the United States Courts prescribes, and
make available to debtors, a register in which a govern-
mental unit may designate a safe harbor mailing address
173
for service of notice in cases pending in the district. A
governmental unit may file a statement with the clerk des-
ignating a safe harbor address to which notices are to be
sent, unless such governmental unit files a notice of
change of address.’’.
(b) ADOPTION OF RULES PROVIDING NOTICE.—The
Advisory Committee on Bankruptcy Rules of the Judicial
Conference shall, within a reasonable period of time after
the date of the enactment of this Act, propose for adoption
enhanced rules for providing notice to State, Federal, and
local government units that have regulatory authority over
the debtor or which may be creditors in the debtor’s case.
Such rules shall be reasonably calculated to ensure that
notice will reach the representatives of the governmental
unit, or subdivision thereof, who will be the proper persons
authorized to act upon the notice. At a minimum, the rules
should require that the debtor—
(1) identify in the schedules and the notice, the
subdivision, agency, or entity in respect of which
such notice should be received;
(2) provide sufficient information (such as case
captions, permit numbers, taxpayer identification
numbers, or similar identifying information) to per-
mit the governmental unit or subdivision thereof, en-
titled to receive such notice, to identify the debtor or
174
the person or entity on behalf of which the debtor
is providing notice where the debtor may be a suc-
cessor in interest or may not be the same as the per-
son or entity which incurred the debt or obligation;
and
(3) identify, in appropriate schedules, served to-
gether with the notice, the property in respect of
which the claim or regulatory obligation may have
arisen, if any, the nature of such claim or regulatory
obligation and the purpose for which notice is being
given.
(c) EFFECT OF FAILURE OF NOTICE.—Section 342
of title 11, United States Code, as amended by subsection
(a), is amended by adding at the end the following:
‘‘(f) A notice that does not comply with subsections
(d) and (e) shall not be effective unless the debtor dem-
onstrates, by clear and convincing evidence, that timely
notice was given in a manner reasonably calculated to sat-
isfy the requirements of this section was given, and that—
‘‘(1) either the notice was timely sent to the
safe harbor address provided in the register main-
tained by the clerk of the district in which the case
was pending for such purposes; or
‘‘(2) no safe harbor address was provided in
such list for the governmental unit and that an offi-
175
cer of the governmental unit who is responsible for
the matter or claim had actual knowledge of the case
in sufficient time to act.’’.
SEC. 803. NOTICE OF REQUEST FOR A DETERMINATION OF
TAXES.
Section 505(b) of title 11, United States Code, is
amended by striking ‘‘Unless’’ at the beginning of the sec-
ond sentence thereof and inserting ‘‘If the request is made
substantially in the manner designated by the govern-
mental unit and unless’’.
SEC. 804. RATE OF INTEREST ON TAX CLAIMS.
Chapter 5 of title 11, United States Code, is amended
by adding at the end the following:
‘‘§ 511. Rate of interest on tax claims
‘‘If any provision of this title requires the payment
of interest on a tax claim or requires the payment of inter-
est to enable a creditor to receive the present value of the
allowed amount of a tax claim, the rate of interest shall
be as follows:
‘‘(1) In the case of ad valorem tax claims,
whether secured or unsecured, other unsecured tax
claims where interest is required to be paid under
section 726(a)(5) of this title, secured tax claims,
and administrative tax claims paid under section
176
503(b)(1) of this title, the rate shall be determined
under applicable nonbankruptcy law.
‘‘(2) In the case of all other tax claims, the
minimum rate of interest shall be the Federal short-
term rate rounded to the nearest full percent, deter-
mined under section 1274(d) of the Internal Reve-
nue Code of 1986, plus 3 percentage points.
‘‘(A) In the case of claims for Federal in-
come taxes, such rate shall be subject to any
adjustment that may be required under section
6621(d) of the Internal Revenue Code of 1986.
‘‘(B) In the case of taxes paid under a con-
firmed plan or reorganization, such rate shall
be determined as of the calendar month in
which the plan is confirmed.’’.
SEC. 805. TOLLING OF PRIORITY OF TAX CLAIM TIME PERI-
ODS.
Section 507(a)(9)(A) of title 11, United States Code,
as so redesignated, is amended—
(1) in clause (i) by inserting after ‘‘petition’’
and before the semicolon ‘‘, plus any time, plus 6
months, during which the stay of proceedings was in
effect in a prior case under this title’’; and
(2) amend clause (ii) to read as follows:
177
‘‘(ii) assessed within 240 days before
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time plus 30 days dur-
ing which an offer in compromise with
respect of such tax, was pending or in
effect during such 240-day period;
‘‘(II) any time plus 30 days dur-
ing which an installment agreement
with respect of such tax was pending
or in effect during such 240-day pe-
riod, up to 1 year; and
‘‘(III) any time plus 6 months
during which a stay of proceedings
against collections was in effect in a
prior case under this title during such
240-day period.’’.
SEC. 806. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code,
is amended by striking ‘‘assessed’’ and inserting ‘‘in-
curred’’.
SEC. 807. CHAPTER 13 DISCHARGE OF FRAUDULENT AND
OTHER TAXES.
Section 1328(a)(2) of title 11, United States Code,
is amended by inserting ‘‘(1),’’ after ‘‘paragraph’’.
178
SEC. 808. CHAPTER 11 DISCHARGE OF FRAUDULENT TAXES.
Section 1141(d) of title 11, United States Code, as
amended by section 119A, is amended by adding at the
end the following:
‘‘(6) Notwithstanding the provisions of paragraph
(1), the confirmation of a plan does not discharge a debtor
which is a corporation from any debt for a tax or customs
duty with respect to which the debtor made a fraudulent
return or willfully attempted in any manner to evade or
defeat such tax.’’.
SEC. 809. STAY OF TAX PROCEEDINGS.
(a) SECTION 362 STAY LIMITED TO PREPETITION
TAXES.—Section 362(a)(8) of title 11, United States
Code, is amended by striking the period at the end and
inserting ‘‘, in respect of a tax liability for a taxable period
ending before the order for relief.’’.
(b) APPEAL
OF
TAX
COURT
DECISIONS
PER-
MITTED.—Section 362(b)(9) of title 11, United States
Code, is amended—
(1) in subparagraph (C) by striking ‘‘or’’ at the
end;
(2) in subparagraph (D) by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(E) the appeal of a decision by a court or
administrative tribunal which determines a tax
179
liability of the debtor without regard to whether
such determination was made prepetition or
postpetition.’’.
SEC. 810. PERIODIC PAYMENT OF TAXES IN CHAPTER 11
CASES.
Section 1129(a)(9) of title 11, United States Code,
is amended—
(1) in subparagraph (B) by striking ‘‘and’’ at
the end; and
(2) in subparagraph (C)—
(A) by striking ‘‘deferred cash payments,
over a period not exceeding six years after the
date of assessment of such claim,’’ and insert-
ing ‘‘regular installment payments in cash, but
in no case with a balloon provision, and no
more than three months apart, beginning no
later than the effective date of the plan and
ending on the earlier of five years after the pe-
tition date or the last date payments are to be
made under the plan to unsecured creditors,’’;
(B) by striking the period at the end and
inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(D) with respect to a secured claim which
would be described in section 507(a)(8) of this
180
title but for its secured status, the holder of
such claim will receive on account of such claim
cash payments of not less than is required in
subparagraph (C) and over a period no greater
than is required in such subparagraph.’’.
SEC. 811. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED.
Section 545(2) of title 11, United States Code, is
amended by striking the semicolon at the end and insert-
ing ‘‘, except where such purchaser is a purchaser de-
scribed in section 6323 of the Internal Revenue Code of
1986 or similar provision of State or local law;’’.
SEC. 812. PAYMENT OF TAXES IN THE CONDUCT OF BUSI-
NESS.
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of
title 28, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and
(2) by adding at the end the following:
‘‘(b) Such taxes shall be paid when due in the conduct
of such business unless—
‘‘(1) the tax is a property tax secured by a lien
against property that is abandoned within a reason-
able time after the lien attaches, by the trustee of
a bankruptcy estate, pursuant to section 554 of title
11; or
181
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11.
‘‘(c) In a case pending under chapter 7 of title 11,
payment of a tax may be deferred until final distribution
is made under section 726 of title 11 if—
‘‘(1) the tax was not incurred by a trustee duly
appointed under chapter 7 of title 11; or
‘‘(2) before the due date of the tax, the court
has made a finding of probable insufficiency of
funds of the estate to pay in full the administrative
expenses allowed under section 503(b) of title 11
that have the same priority in distribution under
section 726(b) of title 11 as such tax.’’.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B) of title 11, United States Code, is
amended in clause (i) by inserting after ‘‘estate,’’ and be-
fore ‘‘except’’ the following: ‘‘whether secured or unse-
cured, including property taxes for which liability is in rem
only, in personam or both,’’.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE
EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of
title 11, United States Code, is amended by adding at the
end the following:
‘‘(D) notwithstanding the requirements of sub-
section (a) of this section, a governmental unit shall
182
not be required to file a request for the payment of
a claim described in subparagraph (B) or (C);’’.
(d) PAYMENT OF TAXES AND FEES AS SECURED
CLAIMS.—Section 506 of title 11, United States Code, is
amended—
(1) in subsection (b) by inserting ‘‘or State
statute’’ after ‘‘agreement’’; and
(2) in subsection (c) by inserting ‘‘, including
the payment of all ad valorem property taxes in re-
spect of the property’’ before the period at the end.
SEC. 813. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is
amended by striking ‘‘before the date on which the trustee
commences distribution under this section’’ and inserting
‘‘on or before the earlier of 10 days after the mailing to
creditors of the summary of the trustee’s final report or
the date on which the trustee commences final distribution
under this section’’.
SEC. 814. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES.
Section 523(a)(1)(B) of title 11, United States Code,
is amended—
(1) by inserting ‘‘or equivalent report or no-
tice,’’ after ‘‘a return,’’;
(2) in clause (i)—
183
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by striking ‘‘or’’ at the end;
(3) in clause (ii)—
(A) by inserting ‘‘or given’’ after ‘‘filed’’;
and
(B) by inserting ‘‘, report, or notice’’ after
‘‘return’’; and
(4) by adding at the end the following:
‘‘(iii) for purposes of this subsection,
a return—
‘‘(I) must satisfy the require-
ments of applicable nonbankruptcy
law, and includes a return prepared
pursuant to section 6020(a) of the In-
ternal Revenue Code of 1986, or simi-
lar State or local law, or a written
stipulation to a judgment entered by a
nonbankruptcy tribunal, but does not
include a return made pursuant to
section 6020(b) of the Internal Reve-
nue Code of 1986, or similar State or
local law; and