In the Senate of the United States,
September 23, 1998.
Resolved, That the bill from the House of Representa-
tives (H.R. 3150) entitled ‘‘An Act to amend title 11 of the
United States Code, and for other purposes.’’, do pass with
the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Consumer Bankruptcy Reform Act of 1998’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—NEEDS-BASED BANKRUPTCY
Sec. 101. Conversion.
Sec. 102. Dismissal or conversion.
TITLE II—ENHANCED PROCEDURAL PROTECTIONS FOR
CONSUMERS
Sec. 201. Allowance of claims or interests.
Sec. 202. Exceptions to discharge.
Sec. 203. Effect of discharge.
Sec. 204. Automatic stay.
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Sec. 205. Discharge.
Sec. 206. Discouraging predatory lending practices.
Sec. 207. Enhanced disclosure for credit extensions secured by dwelling.
Sec. 208. Dual-use debit card.
Sec. 209. Enhanced disclosures under an open end credit plan.
Sec. 210. Violations of the automatic stay.
Sec. 211. Discouraging abusive reaffirmation practices.
Sec. 212. Sense of the Senate regarding the homestead exemption.
Sec. 213. Encouraging creditworthiness.
Sec. 214. Treasury Department study regarding security interests under an open
end credit plan.
TITLE III—IMPROVED PROCEDURES FOR EFFICIENT
ADMINISTRATION OF THE BANKRUPTCY SYSTEM
Sec. 301. Notice of alternatives.
Sec. 302. Fair treatment of secured creditors under chapter 13.
Sec. 303. Discouragement of bad faith repeat filings.
Sec. 304. Timely filing and confirmation of plans under chapter 13.
Sec. 305. Application of the codebtor stay only when the stay protects the debtor.
Sec. 306. Improved bankruptcy statistics.
Sec. 307. Audit procedures.
Sec. 308. Creditor representation at first meeting of creditors.
Sec. 309. Fair notice for creditors in chapter 7 and 13 cases.
Sec. 310. Stopping abusive conversions from chapter 13.
Sec. 311. Prompt relief from stay in individual cases.
Sec. 312. Dismissal for failure to timely file schedules or provide required infor-
mation.
Sec. 313. Adequate time for preparation for a hearing on confirmation of the
plan.
Sec. 314. Discharge under chapter 13.
Sec. 315. Nondischargeable debts.
Sec. 316. Credit extensions on the eve of bankruptcy presumed nondischargeable.
Sec. 317. Definition of household goods and antiques.
Sec. 318. Relief from stay when the debtor does not complete intended surrender
of consumer debt collateral.
Sec. 319. Adequate protection of lessors and purchase money secured creditors.
Sec. 320. Limitation.
Sec. 321. Miscellaneous improvements.
Sec. 322. Bankruptcy judgeships.
Sec. 323. Definition of domestic support obligation.
Sec. 324. Priorities for claims for domestic support obligations.
Sec. 325. Requirements to obtain confirmation and discharge in cases involving
domestic support obligations.
Sec. 326. Exceptions to automatic stay in domestic support obligation proceed-
ings.
Sec. 327. Nondischargeability of certain debts for alimony, maintenance, and
support.
Sec. 328. Continued liability of property.
Sec. 329. Protection of domestic support claims against preferential transfer mo-
tions.
Sec. 330. Protection of retirement savings in bankruptcy.
Sec. 331. Additional amendments to title 11, United States Code.
Sec. 332. Debt limit increase.
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Sec. 333. Elimination of requirement that family farmer and spouse receive over
50 percent of income from farming operation in year prior to
bankruptcy.
Sec. 334. Prohibit retroactive assessment of disposable income.
Sec. 335. Amendment to section 1325 of title 11, United States Code.
Sec. 336. Protection of savings earmarked for the postsecondary education of chil-
dren.
TITLE IV—FINANCIAL INSTRUMENTS
Sec. 401. Bankruptcy Code amendments.
Sec. 402. Recordkeeping requirements.
Sec. 403. Damage measure.
Sec. 404. Asset-backed securitizations.
Sec. 405. Prohibition on certain actions for failure to incur finance charges.
Sec. 406. Fees arising from certain ownership interests.
Sec. 407. Bankruptcy fees.
Sec. 408. Applicability.
TITLE V—ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 501. Amendment to add a chapter 6 to title 11, United States Code.
Sec. 502. Amendments to other chapters in title 11, United States Code.
TITLE VI—MISCELLANEOUS
Sec. 601. Executory contracts and unexpired leases.
Sec. 602. Expedited appeals of bankruptcy cases to courts of appeals.
Sec. 603. Creditors and equity security holders committees.
Sec. 604. Repeal of sunset provision.
Sec. 605. Cases ancillary to foreign proceedings.
Sec. 606. Limitation.
Sec. 607. Amendment to section 546 of title 11, United States Code.
Sec. 608. Amendment to section 330(a) of title 11, United States Code.
TITLE VII—TECHNICAL CORRECTIONS
Sec. 701. Definitions.
Sec. 702. Adjustment of dollar amounts.
Sec. 703. Extension of time.
Sec. 704. Who may be a debtor.
Sec. 705. Penalty for persons who negligently or fraudulently prepare bankruptcy
petitions.
Sec. 706. Limitation on compensation of professional persons.
Sec. 707. Special tax provisions.
Sec. 708. Effect of conversion.
Sec. 709. Automatic stay.
Sec. 710. Amendment to table of sections.
Sec. 711. Allowance of administrative expenses.
Sec. 712. Priorities.
Sec. 713. Exemptions.
Sec. 714. Exceptions to discharge.
Sec. 715. Effect of discharge.
Sec. 716. Protection against discriminatory treatment.
Sec. 717. Property of the estate.
Sec. 718. Preferences.
Sec. 719. Postpetition transactions.
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Sec. 720. Technical amendment.
Sec. 721. Disposition of property of the estate.
Sec. 722. General provisions.
Sec. 723. Appointment of elected trustee.
Sec. 724. Abandonment of railroad line.
Sec. 725. Contents of plan.
Sec. 726. Discharge under chapter 12.
Sec. 727. Extensions.
Sec. 728. Bankruptcy cases and proceedings.
Sec. 729. Knowing disregard of bankruptcy law or rule.
Sec. 730. Rolling stock equipment.
Sec. 731. Curbing abusive filings.
Sec. 732. Study of operation of title 11 of the United States Code with respect
to small businesses.
Sec. 733. Transfers made by nonprofit charitable corporations.
Sec. 734. Effective date; application of amendments.
TITLE I—NEEDS-BASED
BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is
amended by inserting ‘‘or consents to’’ after ‘‘requests’’.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL.—Section 707 of title 11, United
States Code, is amended—
(1) by striking the section heading and inserting
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—
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(I) by striking ‘‘but not’’ and in-
serting ‘‘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) In considering under paragraph (1) whether the
granting of relief would be an abuse of the provisions of
this chapter, the court shall consider whether—
‘‘(A) under section 1325(b)(1), on the basis of the
current income of the debtor, the debtor could pay an
amount greater than or equal to 30 percent of unse-
cured claims that are not considered to be priority
claims (as determined under subchapter I of chapter
5); or
‘‘(B) the debtor filed a petition for the relief in
bad faith.
‘‘(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 mo-
tion and finds that the action of the counsel for the debtor
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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 prosecuting the mo-
tion, including reasonable attorneys’ fees.
‘‘(B) If the court finds that the attorney for the debtor
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, modifica-
tion, 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 contesting
a motion brought by a party in interest (other than a panel
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trustee or United States trustee) under this subsection (in-
cluding 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 mo-
tion 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 me-
dian 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 addi-
tional member of that household.’’.
(b) CLERICAL AMENDMENT.—The table of sections at
the beginning of chapter 7 of title 11, United States Code,
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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.’’.
TITLE 
II—ENHANCED 
PROCE-
DURAL 
PROTECTIONS 
FOR
CONSUMERS
SEC. 201. ALLOWANCE OF CLAIMS OR INTERESTS.
Section 502 of title 11, United States Code, is amended
by adding at the end the following:
‘‘(k)(1) The court may award the debtor reasonable at-
torneys’ fees and costs if, after an objection is filed by a
debtor, the court—
‘‘(A)(i) disallows the claim; or
‘‘(ii) reduces the claim by an amount greater
than 20 percent of the amount of the initial claim
filed by a party in interest; and
‘‘(B) finds the position of the party filing the
claim is not substantially justified.
‘‘(2) If the court finds that the position of a claimant
under this section is not substantially justified, the court
may, in addition to awarding a debtor reasonable attor-
neys’ fees and costs under paragraph (1), award such dam-
ages as may be required by the equities of the case.’’.
SEC. 202. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, is amend-
ed—
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(1) in subsection (a)(2)(A), by striking ‘‘a false
representation’’ and inserting ‘‘a material false rep-
resentation upon which the defrauded person justifi-
ably relied’’; and
(2) by striking subsection (d) and inserting the
following:
‘‘(d)(1) Subject to paragraph (3), if a creditor requests
a determination of dischargeability of a consumer debt
under this section and that debt is discharged, the court
shall award the debtor reasonable attorneys’ fees and costs.
‘‘(2) In addition to making an award to a debtor
under paragraph (1), if the court finds that the position
of a creditor in a proceeding covered under this section is
not substantially justified, the court may award reasonable
attorneys’ fees and costs under paragraph (1) and such
damages as may be required by the equities of the case.
‘‘(3)(A) A creditor may not request a determination
of dischargeability of a consumer debt under subsection
(a)(2) if—
‘‘(i) before the filing of the petition, the debtor
made a good faith effort to negotiate a reasonable al-
ternative repayment schedule (including making an
offer of a reasonable alternative repayment schedule);
and
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‘‘(ii) that creditor refused to negotiate an alter-
native payment schedule, and that refusal was not
reasonable.
‘‘(B) For purposes of this paragraph, the debtor shall
have the burden of proof of establishing that—
‘‘(i) an offer made by that debtor under subpara-
graph (A)(i) was reasonable; and
‘‘(ii) the refusal to negotiate by the creditor in-
volved to was not reasonable.’’.
SEC. 203. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended
by adding at the end the following:
‘‘(i) The willful failure of a creditor to credit payments
received under a plan confirmed under this title (including
a plan of reorganization confirmed under chapter 11 of this
title) in the manner required by the plan (including credit-
ing the amounts required under the plan) shall constitute
a violation of an injunction under subsection (a)(2).
‘‘(j) 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—
‘‘(1) the greater of—
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‘‘(A)(i) the amount of actual damages; mul-
tiplied by
‘‘(ii) 3; or
‘‘(B) $5,000; and
‘‘(2) costs and attorneys’ fees.’’.
SEC. 204. 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) In addition to recovering actual damages, costs,
and attorneys’ fees under paragraph (1), an individual de-
scribed in paragraph (1) may recover punitive damages in
appropriate circumstances.’’.
SEC. 205. DISCHARGE.
Section 727 of title 11, United States Code, is amend-
ed—
(1) in subsection (c), by adding at the end the
following:
‘‘(3)(A) A creditor may not request a determination
of dischargeability of a consumer debt under subsection (a)
if—
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‘‘(i) before the filing of the petition, the debtor
made a good faith effort to negotiate a reasonable al-
ternative repayment schedule (including making an
offer of a reasonable alternative repayment schedule);
and
‘‘(ii) that creditor refused to negotiate an alter-
native payment schedule, and that refusal was not
reasonable.
‘‘(B) For purposes of this paragraph, the debtor shall
have the burden of proof of establishing that—
‘‘(i) an offer made by that debtor under subpara-
graph (A)(i) was reasonable; and
‘‘(ii) the refusal to negotiate by the creditor in-
volved to was not reasonable.’’; and
(2) by adding at the end the following:
‘‘(f)(1) The court may award the debtor reasonable at-
torneys’ fees and costs in any case in which a creditor files
a motion to deny relief to a debtor under this section and
that motion—
‘‘(A) is denied; or
‘‘(B) is withdrawn after the debtor has replied.
‘‘(2) If the court finds that the position of a party fil-
ing a motion under this section is not substantially justi-
fied, the court may assess against the creditor such damages
as may be required by the equities of the case.’’.
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SEC. 206. DISCOURAGING PREDATORY LENDING PRAC-
TICES.
Section 502(b) of title 11, United States Code, is
amended—
(1) in paragraph (8), by striking ‘‘or’’ at the
end;
(2) in paragraph (9), by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(10) the claim is based on a secured debt if the
creditor has failed to comply with the requirements of
subsection (a), (b), (c), (d), (e), (f), (g), (h), or (i) of
section 129 of the Truth in Lending Act (15 U.S.C.
1639).’’.
SEC. 207. ENHANCED DISCLOSURE FOR CREDIT EXTEN-
SIONS SECURED BY DWELLING.
(a) OPEN-END CREDIT EXTENSIONS.—
(1) CREDIT APPLICATIONS.—Section 127A(a)(13)
of the Truth in Lending Act (15 U.S.C. 1637a(a)(13))
is amended—
(A) by striking ‘‘CONSULTATION OF TAX AD-
VISOR.—A statement that the’’ and inserting the
following: ‘‘TAX
DEDUCTIBILITY.—A statement
that—
‘‘(A) the’’; and
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(B) by striking the period at the end and
inserting the following: ‘‘; and
‘‘(B) in any case in which the extension of
credit exceeds the fair market value of the dwell-
ing, the interest on the portion of the credit ex-
tension that is greater than the fair market value
of the dwelling is not tax deductible for Federal
income tax purposes.’’.
(2) CREDIT ADVERTISEMENTS.—Section 147(b)
of the Truth in Lending Act (15
U.S.C. 1665b(b)) is
amended—
(A) by striking ‘‘If any’’ and inserting the
following:
‘‘(1) IN GENERAL.—If any’’; and
(B) by adding at the end the following:
‘‘(2) CREDIT
IN
EXCESS
OF
FAIR
MARKET
VALUE.—Each advertisement described in subsection
(a) that relates to an extension of credit that may ex-
ceed the fair market value of the dwelling shall in-
clude a clear and conspicuous statement that—
‘‘(A) the interest on the portion of the credit
extension that is greater than the fair market
value of the dwelling is not tax deductible for
Federal income tax purposes; and
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‘‘(B) the consumer may want to consult a
tax advisor for further information regarding the
deductibility of interest and charges.’’.
(b) NON-OPEN END CREDIT EXTENSIONS.—
(1) CREDIT APPLICATIONS.—Section 128 of the
Truth in Lending Act (15 U.S.C. 1638) is amended—
(A) in subsection (a), by adding at the end
the following:
‘‘(15) In the case of a consumer credit trans-
action that is secured by the principal dwelling of the
consumer, in which the extension of credit may exceed
the fair market value of the dwelling, a clear and con-
spicuous statement that—
‘‘(A) the interest on the portion of the credit
extension that is greater than the fair market
value of the dwelling is not tax deductible for
Federal income tax purposes; and
‘‘(B) the consumer should consult a tax ad-
visor for further information regarding the de-
ductibility of interest and charges.’’; and
(B) in subsection (b), by adding at the end
the following:
‘‘(3) In the case of a credit transaction described in
paragraph (15) of subsection (a), disclosures required by
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that paragraph shall be made to the consumer at the time
of application for such extension of credit.’’.
(2) CREDIT ADVERTISEMENTS.—Section 144 of
the Truth in Lending Act (15 U.S.C. 1664) is amend-
ed by adding at the end the following:
‘‘(e) Each advertisement to which this section applies
that relates to a consumer credit transaction that is secured
by the principal dwelling of a consumer in which the exten-
sion of credit may exceed the fair market value of the dwell-
ing shall clearly and conspicuously state that—
‘‘(1) the interest on the portion of the credit ex-
tension that is greater than the fair market value of
the dwelling is not tax deductible for Federal income
tax purposes; and
‘‘(2) the consumer may want to consult a tax ad-
visor for further information regarding the deductibil-
ity of interest and charges.’’.
(c) EFFECTIVE DATE.—This section shall become effec-
tive one year after the date of enactment of this Act.
SEC. 208. DUAL-USE DEBIT CARD.
(a) CONSUMER LIABILITY.—
(1) IN GENERAL.—Section 909 of the Electronic
Fund Transfer Act (15 U.S.C. 1693g) is amended—
(A) by redesignating subsections (b) through
(e) as subsections (d) through (g), respectively;
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(B) in subsection (a)—
(i) by redesignating paragraphs (1)
and (2) as subparagraphs (A) and (B), re-
spectively, and indenting appropriately;
(ii) by inserting ‘‘CARDS NECESSITAT-
ING UNIQUE IDENTIFIER.—
‘‘(1) IN GENERAL.—’’ after ‘‘(a)’’;
(iii) by striking ‘‘other means of access
can be identified as the person authorized to
use it, such as by signature, photograph,’’
and inserting ‘‘other means of access can be
identified as the person authorized to use it
by a unique identifier, such as a photo-
graph, retina scan,’’; and
(iv) by striking ‘‘Notwithstanding the
foregoing,’’ and inserting the following:
‘‘(2) 
NOTIFICATION.—Notwithstanding 
para-
graph (1),’’; and
(C) by inserting before subsection (d), as so
designated by this section, the following new sub-
sections:
‘‘(b) CARDS NOT NECESSITATING UNIQUE IDENTI-
FIER.—A consumer shall be liable for an unauthorized elec-
tronic fund transfer only if—
‘‘(1) the liability is not in excess of $50;
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‘‘(2) the unauthorized electronic fund transfer is
initiated by the use of a card that has been properly
issued to a consumer other than the person making
the unauthorized transfer as a means of access to the
account of that consumer for the purpose of initiating
an electronic fund transfer;
‘‘(3) the unauthorized electronic fund transfer oc-
curs before the card issuer has been notified that an
unauthorized use of the card has occurred or may
occur as the result of loss, theft, or otherwise; and
‘‘(4) such unauthorized electronic fund transfer
did not require the use of a code or other unique iden-
tifier (other than a signature), such as a photograph,
fingerprint, or retina scan.
‘‘(c) NOTICE OF LIABILITY AND RESPONSIBILITY TO
REPORT LOSS OF CARD, CODE, OR OTHER MEANS OF AC-
CESS.—No consumer shall be liable under this title for any
unauthorized electronic fund transfer unless the consumer
has received in a timely manner the notice required under
section 905(a)(1), and any subsequent notice required under
section 905(b) with regard to any change in the information
which is the subject of the notice required under section
905(a)(1).’’.
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(2) 
CONFORMING
AMENDMENT.—Section
905(a)(1) of the Electronic Fund Transfer Act (15
U.S.C. 1693c(a)(1)) is amended to read as follows:
‘‘(1) the liability of the consumer for any unau-
thorized electronic fund transfer and the requirement
for promptly reporting any loss, theft, or unauthor-
ized use of a card, code, or other means of access in
order to limit the liability of the consumer for any
such unauthorized transfer;’’.
(b) VALIDATION REQUIREMENT FOR DUAL-USE DEBIT
CARDS.—
(1) IN GENERAL.—Section 911 of the Electronic
Fund Transfer Act (15 U.S.C. 1693i) is amended—
(A) by redesignating subsection (c) as sub-
section (d); and
(B) by inserting after subsection (b) the fol-
lowing new subsection:
‘‘(c) VALIDATION REQUIREMENT.—No person may
issue a card described in subsection (a), the use of which
to initiate an electronic fund transfer does not require the
use of a code or other unique identifier other than a signa-
ture (such as a fingerprint or retina scan), unless—
‘‘(1) the requirements of paragraphs (1) through
(4) of subsection (b) are met; and
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‘‘(2) the issuer has provided to the consumer a
clear and conspicuous disclosure that use of the card
may not require the use of such code or other unique
identifier.’’.
(2) 
TECHNICAL
AND
CONFORMING
AMEND-
MENT.—Section 911(d) of the Electronic Fund Trans-
fer Act (15 U.S.C. 1993i(d)) (as redesignated by sub-
section (a)(1) of this section) is amended by striking
‘‘For the purpose of subsection (b)’’ and inserting
‘‘For purposes of subsections (b) and (c)’’.
SEC. 209. ENHANCED DISCLOSURES UNDER AN OPEN END
CREDIT PLAN.
(a) AMENDMENTS TO THE TRUTH IN LENDING ACT.—
(1) ENHANCED
DISCLOSURE
OF
REPAYMENT
TERMS.—
(A) IN
GENERAL.—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)(A) In a clear and conspicuous manner, re-
payment information that would apply to the out-
standing balance of the consumer under the credit
plan, including—
‘‘(i) the required minimum monthly pay-
ment on that balance, represented as both a dol-
lar figure and a percentage of that balance;
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‘‘(ii) the number of months (rounded to the
nearest month) that it would take to pay the en-
tire amount of that current balance if the con-
sumer pays only the required minimum monthly
payments and if no further advances are made;
‘‘(iii) the total cost to the consumer, includ-
ing interest and principal payments, of paying
that balance in full if the consumer pays only
the required minimum monthly payments and if
no further advances are made; and
‘‘(iv) the following statement: ‘If your cur-
rent rate is a temporary introductory rate, your
total costs may be higher.’.
‘‘(B) In making the disclosures under subpara-
graph (A) the creditor shall apply the annual interest
rate that applies to that balance with respect to the
current billing cycle for that consumer in effect on the
date on which the disclosure is made.’’.
(B) PUBLICATION OF MODEL FORMS.—Not
later than 180 days after the date of enactment
of this Act, the Board of Governors of the Federal
Reserve System shall publish model disclosure
forms in accordance with section 195 of the
Truth in Lending Act for the purpose of compli-
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ance with section 127(b)(11) of the Truth in
Lending Act, as added by this paragraph.
(C) CIVIL LIABILITY.—Section 130(a) of the
Truth in Lending Act (15 U.S.C. 1640(a)) is
amended, in the undesignated paragraph follow-
ing paragraph (4), by striking the second sen-
tence and inserting the following: ‘‘In connection
with the disclosures referred to in subsections (a)
and (b) of section 1637 of this title, a creditor
shall have a liability determined under para-
graph (2) only for failing to comply with the re-
quirements of section 1635, 1637(a), or of para-
graph (4), (5), (6), (7), (8), (9), (10), or (11) of
section 1637(b) or for failing to comply with dis-
closure requirements under State law for any
term or item that the Board has determined to
be substantially the same in meaning under sec-
tion 1610(a)(2) as any of the terms or items re-
ferred to in section 1637(a), paragraph (4), (5),
(6), (7), (8), (9), (10), or (11) of section 1637(b)
of this title.’’.
(2) DISCLOSURES IN CONNECTION WITH SOLICI-
TATIONS.—
(A) IN GENERAL.—Section 127(c)(1)(B) of
the 
Truth 
in 
Lending 
Act 
(15 
U.S.C.
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1637(c)(1)(B)) is amended by adding the follow-
ing:
‘‘(iv) CREDIT WORKSHEET.—An easily
understandable credit worksheet designed to
aid consumers in determining their ability
to assume more debt, including consider-
ation of the personal expenses of the con-
sumer and a simple formula for the con-
sumer to determine whether the assumption
of additional debt is advisable.
‘‘(v) BASIS OF PREAPPROVAL.—In any
case in which the application or solicitation
states 
that 
the 
consumer 
has 
been
preapproved for an account under an open
end consumer credit plan, the following
statement must appear in a clear and con-
spicuous manner: ‘Your preapproval for
this credit card does not mean that we have
reviewed your individual financial cir-
cumstances. You should review your own
budget before accepting this offer of credit.’.
‘‘(vi) AVAILABILITY
OF
CREDIT
RE-
PORT.—That the consumer is entitled to a
copy of his or her credit report in accord-
ance with the Fair Credit Reporting Act.’’.
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(B) PUBLICATION OF MODEL FORMS.—Not
later than 180 days after the date of enactment
of this Act, the Board of Governors of the Federal
Reserve System shall publish model disclosure
forms in accordance with section 195 of the
Truth in Lending Act for the purpose of compli-
ance with section 127(c)(1)(B) of the Truth in
Lending Act, as amended by this paragraph.
(b) EFFECTIVE DATE.—The provisions of this section
shall become effective on January 1, 2001.
SEC. 210. VIOLATIONS OF THE AUTOMATIC STAY.
(a) Section 362(a) is amended by adding after para-
graph (8) the following:
‘‘(9) any communication threatening a debtor, at
any time after the commencement and before the
granting of a discharge in a case under this title, an
intention to file a motion to determine the
dischargeability of a debt, or to file a motion under
section 707(b) of title 11, United States Code, to dis-
miss or convert a case, or to repossess collateral from
the debtor to which the stay applies.’’.
SEC. 211. DISCOURAGING ABUSIVE REAFFIRMATION PRAC-
TICES.
Section 524 of title 11, United States Code, is amend-
ed—
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(1) in subsection (c)(2)(B) by adding at the end
the following:
‘‘(C) such agreement contains a clear and
conspicuous statement which advises the debtor
what portion of the debt to be reaffirmed is at-
tributable to principal, interest, late fees, credi-
tor’s attorneys fees, expenses or other costs relat-
ing to the collection of the debt.’’.
(2)(A) in subsection (c)(6)(B), by inserting after
‘‘real property’’ the following: ‘‘or is a debt described
in subsection (c)(7)’’; and
(B) by adding at the end of subsection (c) the
following:
‘‘(7) in a case concerning an individual, if the
consideration for such agreement is based in whole or
in part on an unsecured consumer debt, or is based
in whole or in part upon a debt for an item of per-
sonalty the value of which at point of purchase was
$250 or less, and in which the creditor asserts a pur-
chase money security interest, the court, approves
such agreement as—
‘‘(A) in the best interest of the debtor in
light of the debtor’s income and expenses;
‘‘(B) not imposing an undue hardship on
the debtor’s future ability of the debtor to pay for
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the needs of children and other dependents (in-
cluding court ordered support);
‘‘(C) not requiring the debtor to pay the
creditor’s attorney’s fees, expenses or other costs
relating to the collection of the debt;
‘‘(D) not entered into to protect property
that is necessary for the care and maintenance
of children or other dependents that would have
nominal value on repossession;
‘‘(E) not entered into after coercive threats
or actions by the creditor in the creditor’s course
of dealings with the debtor.
‘‘(F) not unfair because excessive in amount
based upon the value of the collateral.’’.
(3) in subsection (d)(2) by striking ‘‘subsections
(c)(6)’’ and inserting ‘‘subsections (c)(6) and (c)(7)’’,
and after ‘‘of this section,’’ by striking ‘‘if the consid-
eration for such agreement is based in whole or in
part on a consumer debt that is not secured by real
property of the debtor’’ and adding at the end: ‘‘as
applicable’’.
SEC. 212. SENSE OF THE SENATE REGARDING THE HOME-
STEAD EXEMPTION.
(a) FINDINGS.—The Senate finds that—
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(1) one of the most flagrant abuses of the bank-
ruptcy system involves misuse of the homestead ex-
emption, which allows a debtor to exempt his or her
home, up to a certain value, as established by State
law, from being sold off to satisfy debts;
(2) while the vast majority of States responsibly
cap the exemption at not more than $40,000, 5 States
exempt homes regardless of their value;
(3) in the few States with unlimited homestead
exemptions, debtors can shield their assets in luxury
homes while legitimate creditors get little or nothing;
(4) beneficiaries of the homestead exemption in-
clude convicted insider traders and savings and loan
criminals, while shortchanged creditors include chil-
dren, spouses, governments, and banks; and
(5) the homestead exemption should be capped at
$100,000 to prevent such high-profile abuses.
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that—
(1) meaningful bankruptcy reform cannot be
achieved without capping the homestead exemption;
and
(2) bankruptcy reform legislation should include
a cap of $100,000 on the homestead exemption to the
bankruptcy laws.
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SEC. 213. ENCOURAGING CREDITWORTHINESS.
(a) SENSE OF THE CONGRESS.—It is the sense of the
Congress that—
(1) certain lenders may sometimes offer credit to
consumers indiscriminately, without taking steps to
ensure that consumers are capable of repaying the re-
sulting debt, and in a manner which may encourage
certain consumers to accumulate additional debt; and
(2) resulting consumer debt may increasingly be
a major contributing factor to consumer insolvency.
(b) STUDY REQUIRED.—The Board of Governors of the
Federal Reserve System (hereafter in this section referred
to as the ‘‘Board’’) shall conduct a study of—
(1) consumer credit industry practices of solicit-
ing and extending credit—
(A) indiscriminately;
(B) without taking steps to ensure that con-
sumers are capable of repaying the resulting
debt; and
(C) in a manner that encourages consumers
to accumulate additional debt; and
(2) the effects of such practices on consumer debt
and insolvency.
(c) REPORT AND REGULATIONS.—Not later than 24
months after the date of enactment of this Act, the Board—
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(1) shall make public a report on its findings
with respect to the credit industry’s indiscriminate
solicitation and extension of credit;
(2) may issue regulations that would require ad-
ditional disclosures to consumers; and
(3) may take any other actions, consistent with
its existing statutory authority, that the Board finds
necessary to ensure responsible industrywide practices
and to prevent resulting consumer debt and insol-
vency.
SEC. 214. TREASURY DEPARTMENT STUDY REGARDING SE-
CURITY INTERESTS UNDER AN OPEN END
CREDIT PLAN.
(a) STUDY.—Within 180 days of the enactment of this
Act, the Federal Reserve Board in consultation with the
Treasury Department, the general credit industry, and con-
sumer groups, shall prepare a study regarding the adequacy
of information received by consumers regarding the creation
of security interests under open end credit plans.
(b) FINDINGS.—This study shall include the Board’s
findings regarding—
(1) whether consumers understand at the time of
purchase of property under an open end credit plan
that such property may serve as collateral under that
credit plan;
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(2) whether consumers understand at the time of
purchase the legal consequences of disposing of prop-
erty that is purchased under an open end credit plan
and is subject to a security interest under that plan;
and
(3) whether creditors holding security interests
in property purchased under an open end credit plan
use such security interests to coerce reaffirmations of
existing debts under section 524 of the United States
Bankruptcy Code.
In formulating these findings, the Board shall consider,
among other factors it deems relevant, prevailing industry
practices in this area.
(c) DISCLOSURE
RECOMMENDATIONS.—This study
shall also include the Board’s recommendations regarding
the utility and practicality of additional disclosures by
credit card issuers at the time of purchase regarding secu-
rity interests under open end credit plans, including, but
not limited to—
(1) disclosures of the specific property in which
the creditor will receive a security interest;
(2) disclosures of the consequences of non-
payment of the card balance, including how the secu-
rity interest may be enforced; and
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(3) disclosures of the process by which payments
made on the card will be credited with respect to the
lien created by the security contract and other debts
on the card.
(d) SUBMISSION OF REPORT.—The Board shall submit
this report to the Senate Committee on the Judiciary, the
Senate Committee on Banking, Housing, and Urban Af-
fairs, the House Committee on the Judiciary, and the House
Committee on Banking and Financial Services within the
time allotted by this section.
TITLE 
III—IMPROVED 
PROCE-
DURES FOR EFFICIENT AD-
MINISTRATION OF THE BANK-
RUPTCY SYSTEM
SEC. 301. NOTICE OF ALTERNATIVES.
(a) IN GENERAL.—Section 342 of title 11, United
States Code, is amended by striking subsection (b) and in-
serting the following:
‘‘(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 sec-
tion 521(a)(1), as part of the certification process under
subchapter 1 of chapter 5) a written notice prescribed by
the United States trustee for the district in which the peti-
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tion 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
or the bankruptcy administrator for that district.’’.
(b) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, 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 liabilities;
‘‘(ii) a schedule of current income and
current expenditures;
‘‘(iii) a statement of the debtor’s finan-
cial affairs and, if applicable, a certifi-
cate—
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‘‘(I) of an attorney whose name is
on the petition as the attorney for the
debtor or any bankruptcy petition pre-
parer signing the petition pursuant to
section 110(b)(1) indicating that such
attorney or bankruptcy petition pre-
parer delivered to the debtor any notice
required by section 342(b); or
‘‘(II) if no attorney for the debtor
is indicated and no bankruptcy peti-
tion preparer signed the petition, of the
debtor that such notice was obtained
and read by the debtor;
‘‘(iv) copies of any Federal tax returns,
including any schedules or attachments,
filed by the debtor for the 3-year period pre-
ceding 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 fil-
ing of the petition;
‘‘(vi) a statement of the amount of pro-
jected monthly net income, itemized to show
how calculated; and
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‘‘(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:
‘‘(b)(1) At any time, a creditor, in the case of an indi-
vidual under chapter 7 or 13, may file with the court notice
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 that plan available to the creditor who requests that
plan.
‘‘(c) 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 commence-
ment of the case until such time as the case is closed;
‘‘(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
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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 para-
graph (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 preceding 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, unless a plan
has been confirmed; and
‘‘(B) thereafter, on or before the date that is
45 days before each anniversary of the confirma-
tion 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;
‘‘(B) the identity of any persons responsible with
the debtor for the support of any dependents of the
debtor; and
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‘‘(C) the identity of any persons who contributed,
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 sub-
section (e).
‘‘(e)(1) Not later than 30 days after the date of enact-
ment of the Consumer Bankruptcy Reform Act of 1998, the
Director of the Administrative Office of the United States
Courts shall establish procedures for safeguarding the con-
fidentiality of any tax information required to be provided
under this section.
‘‘(2) The procedures under paragraph (1) shall include
restrictions on creditor access to tax information that is re-
quired to be provided under this section.
‘‘(3) Not later than 1 year after the date of enactment
of the Consumer Bankruptcy Reform Act of 1998, the Direc-
tor of the Administrative Office of the United States Courts
shall prepare, and submit to Congress a report that—
‘‘(A) assesses the effectiveness of the procedures
under paragraph (1); and
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‘‘(B) if appropriate, includes proposed legisla-
tion—
‘‘(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.
‘‘(f) If requested by the United States trustee or a trust-
ee 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 photo-
graph of the debtor and such other personal identifying in-
formation relating to the debtor that establishes the identity
of the debtor.’’.
(c) TITLE 28.—Section 586(a) of title 28, United
States Code, is amended—
(1) in paragraph (5), by striking ‘‘and’’ at the
end;
(2) in paragraph (6), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(7) on or before January 1 of each calendar
year, and also not later than 30 days after any
change in the nonprofit debt counseling services reg-
istered with the bankruptcy court, prescribe and make
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available on request the notice described in section
342(b)(3) of title 11 for each district included in the
region.’’.
SEC. 302. FAIR TREATMENT OF SECURED CREDITORS
UNDER CHAPTER 13.
(a) RESTORING
THE FOUNDATION
FOR SECURED
CREDIT.—Section 1325(a) of title 11, United States Code,
is amended—
(1) in paragraph (5), by striking the matter pre-
ceding subparagraph (A) and inserting the following:
‘‘(5) with respect to an allowed claim provided
for by the plan that is secured under applicable non-
bankruptcy law by reason of a lien on property in
which the estate has an interest or is subject to a
setoff under section 553—’’; and
(2) by adding at the end of the subsection the fol-
lowing flush sentence:
‘‘For purposes of paragraph (5), section 506 shall not apply
to a claim described in that paragraph.’’.
(b) PAYMENT OF HOLDERS OF CLAIMS SECURED BY
LIENS.—Section 1325(a)(5)(B)(i) of title 11, United States
Code, is amended to read as follows:
‘‘(B)(i) the plan provides that the holder of
such claim retain the lien securing such claim
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until the debt that is the subject of the claim is
fully paid for, as provided under the plan; and’’.
(c) DETERMINATION OF SECURED STATUS.—Section
506 of title 11, United States Code, is amended by adding
at the end the following:
‘‘(e) Subsection (a) shall not apply to an allowed claim
to the extent attributable in whole or in part to the purchase
price of personal property acquired by the debtor during
the 90-day period preceding the date of filing of the peti-
tion.’’.
SEC. 303. DISCOURAGEMENT OF BAD FAITH REPEAT FIL-
INGS.
Section 362(c) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ before ‘‘Except as’’;
(2) by striking ‘‘(1) the stay’’ and inserting ‘‘(A)
the stay’’;
(3) by striking ‘‘(2) the stay’’ and inserting ‘‘(B)
the stay’’;
(4) by striking ‘‘(A) the time’’ and inserting ‘‘(i)
the time’’;
(5) by striking ‘‘(B) the time’’ and inserting
‘‘(ii) the time’’; and
(6) by adding at the end the following:
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‘‘(2) Except as provided in subsections (d) through (f),
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 shall terminate with respect
to the debtor on the 30th day after the filing of the later
case if—
‘‘(A) a single or joint case is filed by or against
an individual debtor under chapter 7, 11, or 13; and
‘‘(B) a single or joint case of that debtor (other
than a case refiled under a chapter other than chapter
7 after dismissal under section 707(b)) was pending
during the preceding year but was dismissed.
‘‘(3) If a party in interest so requests, the court may
extend the stay in a particular case with respect to 1 or
more creditors (subject to such conditions or limitations as
the court may impose) after providing notice and a hearing
completed before the expiration of the 30-day period de-
scribed in paragraph (2) only if the party in interest dem-
onstrates that the filing of the later case is in good faith
with respect to the creditors to be stayed.
‘‘(4) A case shall be presumed to have not been filed
in good faith (except that such presumption may be rebutted
by clear and convincing evidence to the contrary)—
‘‘(A) with respect to the creditors involved, if—
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‘‘(i) more than 1 previous case under any
of chapters 7, 11, or 13 in which the individual
was a debtor was pending during the 1-year pe-
riod described in paragraph (1);
‘‘(ii) a previous case under any of chapters
7, 11, or 13 in which the individual was a debt-
or was dismissed within the period specified in
paragraph (2) after—
‘‘(I) the debtor, after having received
from the court a request to do so, failed to
file or amend the petition or other docu-
ments as required by this title; or
‘‘(II) the debtor, without substantial
excuse, failed to perform the terms of a plan
that was confirmed by the court; or
‘‘(iii)(I) during the period commencing
with the dismissal of the next most previous case
under chapter 7, 11, or 13 there has not been a
substantial change in the financial or personal
affairs of the debtor;
‘‘(II) if the case is a chapter 7 case, there
is no other reason to conclude that the later case
will be concluded with a discharge; or
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‘‘(III) if the case is a chapter 11 or 13 case,
there is not a confirmed plan that will be fully
performed; and
‘‘(B) with respect to any creditor that com-
menced an action under subsection (d) in a previous
case in which the individual was a debtor, if, as of
the date of dismissal of that case, that action was still
pending or had been resolved by terminating, condi-
tioning, or limiting the stay with respect to actions
of that creditor.
‘‘(5)(A) If a request is made for relief from the stay
under subsection (a) with respect to real or personal prop-
erty of any kind, and the request is granted in whole or
in part, the court may, in addition to making any other
order under this subsection, order that the relief so granted
shall be in rem either—
‘‘(i) for a definite period of not less than 1 year;
or
‘‘(ii) indefinitely.
‘‘(B)(i) After an order is issued under subparagraph
(A), the stay under subsection (a) shall not apply to any
property subject to such an in rem order in any case of
the debtor.
‘‘(ii) If an in rem order issued under subparagraph
(A) so provides, the stay shall, in addition to being inap-
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plicable to the debtor involved, not apply with respect to
an entity under this title if—
‘‘(I) the entity had reason to know of the order
at the time that the entity obtained an interest in the
property affected; or
‘‘(II) the entity was notified of the commence-
ment of the proceeding for relief from the stay, and
at the time of the notification, no case in which the
entity was a debtor was pending.
‘‘(6) For purposes of this section, a case is pending
during the period beginning with the issuance of the order
for relief and ending at such time as the case involved is
closed.’’.
SEC. 304. TIMELY FILING AND CONFIRMATION OF PLANS
UNDER CHAPTER 13.
(a) 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 extension
is attributable to circumstances for which the debtor should
not justly be held accountable.’’.
(b) CONFIRMATION
OF HEARING.—Section 1324 of
title 11, United States Code, is amended by adding at the
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end the following: ‘‘That hearing shall be held not later than
45 days after the filing of the plan, unless the court, after
providing notice and a hearing, orders otherwise.’’.
SEC. 305. 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 debtor
that secures that claim.
‘‘(B) Notwithstanding subparagraph (A), the stay pro-
vided 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-
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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 provided
by subsection (a) shall terminate as of the date of confirma-
tion of the plan, in any case in which the plan of the debtor
provides that the debtor’s interest in personal property sub-
ject 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. 306. 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 Di-
rector of the Administrative Office of the United States
Courts (referred to in this section as the ‘Office’).
‘‘(b) The Director shall—
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‘‘(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, 1998, and annu-
ally thereafter, prepare, and submit to Congress a re-
port concerning the information collected under sub-
section (a) that contains an analysis of the informa-
tion.
‘‘(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 debt-
ors;
‘‘(B) the current total monthly income, pro-
jected monthly net income, and average income
and average expenses of those debtors as reported
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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 sched-
ules and the amount of such debt reported in cat-
egories which are predominantly nondischarge-
able;
‘‘(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 re-
affirmation 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
‘‘(III) of those cases, the number of
cases in which the reaffirmation was ap-
proved by the court;
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‘‘(F) with respect to cases filed under chap-
ter 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; and
‘‘(G) the extent of creditor misconduct and
any amount of punitive damages awarded by the
court for creditor misconduct.’’.
(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 enact-
ment of this Act.
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SEC. 307. AUDIT PROCEDURES.
(a) AMENDMENTS.—Section 586 of title 28, United
States Code, is amended—
(1) in subsection (a), as amended by section 301
of this Act, by striking paragraph (6) and inserting
the following:
‘‘(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 proce-
dures to determine the accuracy and completeness of peti-
tions, 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.
‘‘(B) Those procedures shall—
‘‘(i) establish a method of selecting appropriate
qualified persons to contract to perform those audits;
‘‘(ii) establish a method of randomly selecting
cases to be audited, except that not less than 1 out of
every 500 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
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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 concern-
ing the aggregate results of such audits including 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 au-
thorized 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 transmitted to
the United States trustee. Each report shall clearly and con-
spicuously specify any material misstatement of income or
expenditures or of assets identified by the person 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 expendi-
tures or of assets is reported the United States trustee
shall—
‘‘(i) report the material misstatement,
if appropriate, to the United States Attor-
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ney pursuant to section 3057 of title 18,
United States Code; and
‘‘(ii) if advisable, take appropriate ac-
tion, including but not limited to commenc-
ing 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 of title 11, United States Code, is
amended in paragraphs (3) and (4) by adding ‘‘or an audi-
tor 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—
(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) adding the following at the end of paragraph
(3)—
‘‘(4) the debtor has failed to explain satisfac-
torily—
‘‘(A) a material misstatement in an audit
performed pursuant to section 586(f) of title 28,
United States Code; or
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‘‘(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 enact-
ment of this Act.
SEC. 308. 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 following:
‘‘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 representation
at the meeting of creditors under subsection (a) be by an
attorney, a creditor holding a consumer debt or any rep-
resentative of the creditor (which may include an entity or
an employee of an entity and may be a representative for
more than one creditor) shall be permitted to appear at and
participate in the meeting of creditors in a case under chap-
ter 7 or 13, either alone or in conjunction with an attorney
for the creditor. Nothing in this subsection shall be con-
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strued to require any creditor to be represented by an attor-
ney at any meeting of creditors.’’.
SEC. 309. FAIR NOTICE FOR CREDITORS IN CHAPTER 7 AND
13 CASES.
Section 342 of title 11, United States Code, is amend-
ed—
(1) in subsection (c), by striking ‘‘, but the fail-
ure of such notice to contain such information shall
not invalidate the legal effect of such notice’’; and
(2) by adding at the end the following:
‘‘(d)(1) If the credit agreement between the debtor and
the creditor or the last communication before the filing of
the petition in a voluntary case from the creditor to a debtor
who is an individual states an account number of the debtor
that is the current account number of the debtor with re-
spect to any debt held by the creditor against the debtor,
the debtor shall include that account number in any notice
to the creditor required to be given under this title.
‘‘(2) If the creditor has specified to the debtor, in the
last communication before the filing of the petition, an ad-
dress 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.
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‘‘(3) For purposes of this section, the term ‘notice’ shall
include—
‘‘(A) any correspondence from the debtor to the
creditor after the commencement of the case;
‘‘(B) any statement of the debtor’s intention
under section 521(a)(2);
‘‘(C) notice of the commencement of any proceed-
ing in the case to which the creditor is a party; and
‘‘(D) any notice of a hearing under section 1324.
‘‘(e)(1) At any time, a creditor, in a case of an indi-
vidual 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.
‘‘(2) If the court or the debtor is required to give the
creditor notice, not later than 5 days after receipt of the
notice under paragraph (1), that notice shall be given at
that address.
‘‘(f) An entity may file with the court a notice stating
its address for notice in cases under chapter 7 or 13. After
the date that is 30 days following the filing of that 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 (e) with respect to a particular
case.
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‘‘(g)(1) Notice given to a creditor other than as pro-
vided in this section shall not be effective notice until that
notice has been brought to the attention of the creditor.
‘‘(2) If the creditor has designated a person or depart-
ment to be responsible for receiving notices concerning
bankruptcy cases and has established reasonable procedures
so that bankruptcy notices received by the creditor will be
delivered to that department or person, notice shall not be
brought to the attention of the creditor until that notice is
received by that person or department.’’.
SEC. 310. 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 se-
cured claims in cases under chapters 11 and
12’’; and
(B) by striking the period and inserting ‘‘;
and’’; and
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(3) by adding at the end the following:
‘‘(C) with respect to cases converted from chapter
13, the claim of any creditor holding security as of
the date of the petition shall continue to be secured
by that security unless the full amount of that claim
determined under applicable nonbankruptcy law has
been paid in full as of the date of conversion, notwith-
standing any valuation or determination of the
amount of an allowed secured claim made for the
purposes of the chapter 13 proceeding.’’.
SEC. 311. 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 sub-
section (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—
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‘‘(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 for good
cause.’’.
SEC. 312. DISMISSAL FOR FAILURE TO TIMELY FILE SCHED-
ULES OR PROVIDE REQUIRED INFORMATION.
Section 707 of title 11, United States Code, as amend-
ed by section 102 of this Act, is amended by adding at the
end the following:
‘‘(c)(1) Notwithstanding subsection (a), 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 section 521(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 requested,
enter an order of dismissal not later than 5 days after that
request.
‘‘(3) Upon request of the debtor made within 45 days
after the filing of the petition commencing a case described
in paragraph (1), the court may allow the debtor an addi-
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tional period of not to exceed 50 days to file the information
required under section 521(a)(1) if the court finds justifica-
tion for extending the period for the filing.’’.
SEC. 313. ADEQUATE TIME FOR PREPARATION FOR A HEAR-
ING ON CONFIRMATION OF THE PLAN.
Section 1324 of title 11, United States Code, as amend-
ed by section 304 of this Act, is amended—
(1) by striking ‘‘After’’ and inserting the follow-
ing:
‘‘(a) Except as provided in subsection (b) and after’’;
and
(2) by adding at the end the following:
‘‘(b) If not later than 5 days after receiving notice of
a hearing on confirmation of the plan, a creditor objects
to the confirmation of the plan, the hearing on confirmation
of the plan may be held no earlier than 20 days after the
first meeting of creditors under section 341(a).’’.
SEC. 314. DISCHARGE UNDER CHAPTER 13.
Section 1328(a) of title 11, United States Code, is
amended by striking paragraphs (1) through (3) and insert-
ing the following:
‘‘(1) provided for under section 1322(b)(5);
‘‘(2) of the kind specified in paragraph (2), (4),
(5), (8), or (9) of section 523(a);
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‘‘(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. 315. 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)
or (b), or 1328(b), or any other provision of this sub-
section, where the debtor incurred the debt to pay
such a nondischargeable debt with the intent to dis-
charge in bankruptcy the newly-created debt.’’.
SEC. 316. CREDIT EXTENSIONS ON THE EVE OF BANK-
RUPTCY PRESUMED NONDISCHARGEABLE.
Section 523(a)(2) of title 11, United States Code, as
amended by section 202 of this Act, is amended—
(1) in subparagraph (A), by striking the semi-
colon at the end and inserting the following: ‘‘(and,
for purposes of this subparagraph, consumer debts
owed in an aggregate amount greater than or equal
to $400 incurred for goods or services not reasonably
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necessary for the maintenance or support of the debtor
or a dependent child of the debtor to a single creditor
that are incurred during the 90-day period preceding
the date of the order for relief shall be presumed to
be nondischargeable under this subparagraph); or’’;
(2) in subparagraph (B), by striking ‘‘or’’ at the
end; and
(3) by striking subparagraph (C).
SEC. 317. DEFINITION OF HOUSEHOLD GOODS AND AN-
TIQUES.
Not later than 180 days after the date of enactment
of this Act, the Federal Trade Commission shall promulgate
regulations defining ‘‘household goods’’ under section
522(c)(3) in a manner suitable and appropriate for cases
under title 11 of the United States Code. If new regulations
are not effective within 180 days of enactment of this Act,
then ‘‘household goods’’ under section 522(c)(3) shall have
the meaning given that term in section 444.1(i) of title 16,
of the Code of Federal Regulations, except that the term
shall also include any tangible personal property reason-
ably necessary for the maintenance or support of a depend-
ent child.
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SEC. 318. RELIEF FROM STAY WHEN THE DEBTOR DOES
NOT COMPLETE INTENDED SURRENDER OF
CONSUMER DEBT COLLATERAL.
(a) AUTOMATIC STAY.—Section 362 of title 11, United
States Code, as amended by section 303, is amended—
(1) in subsection (c)(1), in the matter preceding
subparagraph (A), by striking ‘‘(e) and (f)’’ and in-
serting ‘‘(e), (f), and (h)’’;
(2) by redesignating subsection (h) as subsection
(i); and
(3) by inserting after subsection (g) the follow-
ing:
‘‘(h) In an individual case under chapter 7, 11, or 13
the stay provided by subsection (a) is terminated with re-
spect to property of the estate securing in whole or in part
a claim that is in an amount greater than $3,000, or subject
to an unexpired lease with a remaining term of at least
1 year (in any case in which the debtor owes at least $3,000
for a 1-year period), if within 30 days after the expiration
of the applicable period under section 521(a)(2)—
‘‘(1)(A) the debtor fails to timely file a statement
of intention to surrender or retain the property; or
‘‘(B) if the debtor indicates in the filing that the
debtor will retain the property, the debtor fails to
meet an applicable requirement to—
‘‘(i) either—
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‘‘(I) redeem the property pursuant to
section 722; or
‘‘(II) reaffirm the debt the property se-
cures pursuant to section 524(c); or
‘‘(ii) assume the unexpired lease pursuant
to section 365(d) if the trustee does not do so; or
‘‘(2) the debtor fails to timely take the action
specified in a statement of intention referred to in
paragraph (1)(A) (as amended, if that statement is
amended before expiration of the period for taking ac-
tion), unless—
‘‘(A) the statement of intention specifies re-
affirmation; and
‘‘(B) the creditor refuses to reaffirm the debt
on the original contract terms for the debt.’’.
(b) DEBTOR’S DUTIES.—Section 521(a)(2) of title 11,
United States Code, as redesignated by section 301(b) of
this Act, is amended—
(1) in the matter preceding subparagraph (A),
by striking ‘‘consumer’’;
(2) in subparagraph (B)—
(A) by striking ‘‘forty-five days after the fil-
ing of a notice of intent under this section’’ and
inserting ‘‘30 days after the first meeting of
creditors under section 341(a)’’; and
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(B) by striking ‘‘forty-five-day period’’ and
inserting ‘‘30-day period’’; and
(3) in subparagraph (C), by inserting ‘‘, except
as provided in section 362(h)’’ before the semicolon.
SEC. 319. 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
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‘‘(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 determined by the court.
‘‘(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 a payment referred to in para-
graph (1) shall not be less than the reasonable depreciation
of the personal property described in subsection (a)(1), de-
termined on a month-to-month basis.
‘‘(c) Notwithstanding section 1326(b), the payments
referred to in subsection (a)(1)(A) shall be continued in ad-
dition to plan payments under a confirmed plan until ac-
tual 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
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‘‘(2) for the deferral of payments to such creditor
or lessor under the plan until the payment of
amounts described in section 1326(b).
‘‘(d) Notwithstanding sections 362, 542, and 543, a les-
sor or creditor described in subsection (a) may retain pos-
session 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 sub-
section (a)(1)(A) is received by the lessor or creditor.’’.
(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. 320. LIMITATION.
Section 522 of title 11, United States Code, as amend-
ed by section 207(a), is amended—
(1) in subsection (b)(3)(A), by inserting ‘‘subject
to subsection (n),’’ before ‘‘any property’’; and
(2) by adding at the end the following new sub-
section:
‘‘(n)(1) Except as provided in paragraph (2), as a re-
sult of electing under subsection (b)(3)(A) to exempt prop-
erty under State or local law, a debtor may not exempt
any amount of interest that exceeds in the aggregate
$100,000 in value in—
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‘‘(A) real or personal property that the debtor or
a dependent of the debtor uses as a residence;
‘‘(B) a cooperative that owns property that the
debtor or a dependent of the debtor uses as a resi-
dence; or
‘‘(C) a burial plot for the debtor or a dependent
of the debtor.
‘‘(2) The limitation under paragraph (1) shall not
apply to an exemption claimed under subsection (b)(2)(A)
by a family farmer for the principal residence of that farm-
er.’’.
SEC. 321. 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 indi-
vidual 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 opportunities
for available credit counseling and assisted that individual
in performing an initial budget analysis, through a credit
counseling program (offered through an approved credit
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counseling service described in section 111(a)) that has been
approved by—
‘‘(A) the United States trustee; or
‘‘(B) the bankruptcy administrator for the dis-
trict in which the petition is filed.’’.
‘‘(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 in-
dividuals who would otherwise seek credit counseling from
those programs by reason of the requirements of paragraph
(1).
‘‘(B) Each United States trustee or bankruptcy admin-
istrator that makes a determination described in subpara-
graph (A) shall review that determination not later than
one year after the date of that determination, and not less
frequently than every year thereafter.
‘‘(3)(A) Subject to subparagraph (B), the requirements
of paragraph (1) shall not apply with respect to a debtor
who submits to the court a certification that—
‘‘(i) describes exigent circumstances that merit a
waiver of the requirements of paragraph (1);
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‘‘(ii) states that the debtor requested credit coun-
seling services from an approved credit counseling
service, but was unable to obtain the services referred
to in paragraph (1) during the 5-day period begin-
ning on the date on which the debtor made that re-
quest; and
‘‘(iii) is satisfactory to the court.
‘‘(B) With respect to a debtor, an exemption under sub-
paragraph (A) shall cease to apply to that debtor on the
date on which the debtor meets the requirements of para-
graph (1), but in no case may the exemption apply to that
debtor after the date that is 30 days after the debtor files
a petition.’’.
(b) CHAPTER 7 DISCHARGE.—Section 727(a) of title
11, United States Code, is amended—
(1) in paragraph (9), by striking ‘‘or’’ at the
end;
(2) in paragraph (10), by striking the period
and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(11) after the filing of the petition, the debtor
failed to complete an instructional course concerning
personal financial management described in section
111 that was administered or approved by—
‘‘(A) the United States trustee; or
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‘‘(B) the bankruptcy administrator for the
district in which the petition is filed.’’.
(c) CHAPTER 13 DISCHARGE.—Section 1328 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(f) The court shall not grant a discharge under this
section to a debtor, unless after filing a petition the debtor
has completed an instructional course concerning personal
financial management described in section 111 that was ad-
ministered or approved by—
‘‘(1) the United States trustee; or
‘‘(2) the bankruptcy administrator for the dis-
trict in which the petition is filed.’’.
(d) DEBTOR’S DUTIES.—Section 521 of title 11,
United States Code, as amended by sections 301(b) and
318(b) of this Act, is amended by adding at the end the
following:
‘‘(e) In addition to the requirements under subsection
(a), an individual debtor shall file with the court—
‘‘(1) a certificate from the credit counseling serv-
ice that provided the debtor services under section
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).’’.
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(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 credit
counseling through a credit counseling program in ac-
cordance with section 109(h); and’’.
(f) GENERAL PROVISIONS.—
(1) IN GENERAL.—Chapter 1 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 111. Credit counseling services; financial manage-
ment instructional courses
‘‘(a) The clerk of each district shall maintain a list
of credit counseling services that provide 1 or more pro-
grams described in section 109(h) and that have been ap-
proved by—
‘‘(1) the United States trustee; or
‘‘(2) the bankruptcy administrator for the dis-
trict.
‘‘(b) The United States trustee or each bankruptcy ad-
ministrator referred to in subsection (a)(1) shall—
‘‘(1) make available to debtors who are individ-
uals an instructional course concerning personal fi-
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nancial management, under the direction of the bank-
ruptcy court; and
‘‘(2) maintain a list of instructional courses con-
cerning personal financial management that are oper-
ated by a private entity and that have been approved
by the United States trustee or that bankruptcy ad-
ministrator.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 1 of title 11, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘111. Credit counseling services; financial management instructional courses.’’.
(g) DEFINITIONS.—Section 101 of title 11, United
States Code, as amended by section 317 of this Act, is
amended—
(1) by inserting after paragraph (13) the follow-
ing:
‘‘(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 co-operative unit;’’; and
(2) by inserting after paragraph (27A), as added
by section 318 of this Act, the following:
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‘‘(27B) ‘incidental property’ means, with respect
to a debtor’s principal residence—
‘‘(A) property commonly conveyed with a
principal residence in the area where the real es-
tate is located;
‘‘(B) all easements, rights, appurtenances,
fixtures, rents, royalties, mineral rights, oil or
gas rights or profits, water rights, escrow funds,
or insurance proceeds; and
‘‘(C) all replacements or additions;’’.
SEC. 322. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE.—This section may be cited as the
‘‘Bankruptcy Judgeship Act of 1998’’.
(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.
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(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 judicial
districts set forth in paragraph (1) that—
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(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 appointed
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 district
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 extended until the
first vacancy occurring in the office of a bankruptcy
judge in the applicable district resulting from the
death, retirement, resignation, or removal of a bank-
ruptcy 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;
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(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 Ten-
nessee.
(2) APPLICABILITY OF OTHER PROVISIONS.—All
other provisions of section 3 of the Bankruptcy Judge-
ship 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 amend-
ed to read as follows: ‘‘Each bankruptcy judge to be ap-
pointed for a judicial district as provided in paragraph (2)
shall be appointed by the United States court of appeals
for the circuit in which such district is located.’’.
(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—
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‘‘(i) the payment for the travel expenses is
paid by such bankruptcy judge from the personal
funds of such bankruptcy judge; and
‘‘(ii) such bankruptcy judge does not receive
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 in-
clude—
‘‘(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 pur-
pose of the travel relating to each travel expense iden-
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tified under clause (i), with the name of the bank-
ruptcy judge to whom the travel applies; and
‘‘(iii) the number of days of each travel described
under clause (ii), with the name of the bankruptcy
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. 323. DEFINITION OF DOMESTIC SUPPORT OBLIGA-
TION.
Section 101 of title 11, United States Code, as amend-
ed by section 321(g) of this Act, is amended—
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the follow-
ing:
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‘‘(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 govermental unit) of such spouse, former
spouse, or child, without regard to whether such
debt is expressly so designated;
‘‘(C) established or subject to establishment
before or after entry of an order for relief under
this title, by reason of applicable provisions of—
‘‘(i) a separation agreement, divorce
decree, or property settlement agreement;
‘‘(ii) an order of a court of record; or
‘‘(iii) a determination made in accord-
ance with applicable nonbankruptcy law by
a governmental unit; and
‘‘(D) not assigned to a nongovernmental en-
tity, unless that obligation is assigned volun-
tarily by the spouse, former spouse, child, or par-
ent solely for the purpose of collecting the debt.’’.
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SEC. 324. 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 redesig-
nated, the following:
‘‘(1) First, allowed claims for domestic support obliga-
tions to be paid in the following order on the condition that
funds received under this paragraph by a governmental
unit in a case under this title be applied:
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‘‘(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 person.
‘‘(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 gov-
ernmental unit under applicable nonbankruptcy
law.’’.
SEC. 325. 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)—
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(A) in paragraph (5), by striking ‘‘and’’ at
the end;
(B) in paragraph (6), by striking the period
at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(7) if the debtor is required by a judicial or ad-
ministrative order or statute to pay a domestic sup-
port obligation, the debtor has paid all amounts pay-
able under such order for such obligation that become
payable after the date on which the petition is filed.’’;
and
(3) in section 1328(a), as amended by section
314 of this Act, in the matter preceding paragraph
(1), by inserting ‘‘, and with respect to a debtor who
is required 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 (includ-
ing amounts due before or after the petition was filed)
have been paid’’ after ‘‘completion by the debtor of all
payments under the plan’’.
SEC. 326. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC
SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, is
amended—
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(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 support
obligations; or
‘‘(ii) the establishment or modification
of an order for domestic support obligations;
or
‘‘(B) the collection of a domestic support ob-
ligation from property that is not property of the
estate;’’;
(2) in paragraph (17), by striking ‘‘or’’ at the
end;
(3) in paragraph (18), by striking the period at
the end and inserting a semicolon; and
(4) by adding at the end the following:
‘‘(19) 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
‘‘(20) under subsection (a) with respect to—
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‘‘(A) the withholding, suspension, or restric-
tion of drivers’ licenses, professional and occupa-
tional licenses, and recreational licenses pursu-
ant 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 reporting of
overdue support owed by an absent parent to
any consumer reporting agency as specified in
section 466(a)(7) of the Social Security Act (42
U.S.C. 666(a)(7));
‘‘(B) the interception of tax refunds, as
specified in sections 464 and 466(a)(3) of the So-
cial Security Act (42 U.S.C. 664 and 666(a)(3));
or
‘‘(C) the enforcement of medical obligations
as specified under title IV of the Social Security
Act (42 U.S.C. 601 et seq.).’’.
SEC. 327. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR
ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, as amend-
ed by section 202 of this Act, is amended—
(1) in subsection (a), by striking paragraph (5)
and inserting the following:
‘‘(5) for a domestic support obligation;’’;
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(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. 328. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is amend-
ed—
(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, notwithstand-
ing 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. 329. 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:
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‘‘(7) to the extent such transfer was a bona fide
payment of a debt for a domestic support obligation;
or’’.
SEC. 330. 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 following:
‘‘(C) retirement funds to the extent that those
funds are in a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414, 457,
or 501(a) of the Internal Revenue Code of 1986 and
which has not been pledged or promised to any person
in connection with any extension of credit.’’;
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(B) by striking paragraph (1) and insert-
ing:
‘‘(2) Property listed in this paragraph is property that
is specified under subsection (d) of this section, unless the
State law that is applicable to the debtor under paragraph
(3)(A) of this subsection 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 pur-
suant to section 7805 of the Internal Revenue Code of
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1986, and that determination is in effect as of the
date of the commencement of the case under section
301, 302, or 303, 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 exempt
from the estate if the debtor demonstrates that—
‘‘(i) no prior determination to the contrary
has been made by a court or the Internal Reve-
nue Service; and
‘‘(ii)(I) the retirement fund is in substan-
tial compliance with the applicable requirements
of the Internal Revenue Code of 1986; or
‘‘(II) the retirement fund fails to be in sub-
stantial compliance with such applicable require-
ments, the debtor is not materially responsible
for that failure.
‘‘(C) A direct transfer of retirement funds from
1 fund or account that is exempt from taxation under
section 401, 403, 408, 408A, 414, 457, or 501(a) of
the Internal Revenue Code of 1986, pursuant to sec-
tion 401(a)(31) of the Internal Revenue Code of 1986,
or otherwise, shall not cease to qualify for exemption
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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 qual-
ify 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 ac-
count that is exempt from taxation under section
401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986; and
‘‘(II) to the extent allowed by law, is depos-
ited in such a fund or account not later than 60
days after the distribution of that amount.’’; and
(2) in subsection (d)—
(A) in the matter preceding paragraph (1),
by striking ‘‘subsection (b)(1)’’ and inserting
‘‘subsection (b)(2)’’; and
(B) by adding at the end the following:
‘‘(12) Retirement funds to the extent that those funds
are in a fund or account that is exempt from taxation under
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section 401, 403, 408, 408A, 414, 457, or 501(a) of the In-
ternal Revenue Code of 1986.’’.
(b) AUTOMATIC STAY.—Section 362(b) of title 11,
United States Code, is amended—
(1) in paragraph (17), by striking ‘‘or’’ at the
end;
(2) in paragraph (18), by striking the period
and inserting ‘‘; or’’;
(3) by inserting after paragraph (18) the follow-
ing:
‘‘(19) under subsection (a), of withholding of in-
come from a debtor’s wages and collection of amounts
withheld, pursuant to the debtor’s agreement authoriz-
ing 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 Revenue Code of 1986
that is sponsored by the employer of the debtor, or an
affiliate, successor, or predecessor of such employer—
‘‘(A) to the extent that the amounts withheld
and collected are used solely for payments relat-
ing to a loan from a plan that satisfies the re-
quirements of section 408(b)(1) of the Employee
Retirement Income Security Act of 1974 (29
U.S.C. 1108(b)(1)); or
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‘‘(B) in the case of a loan from a thrift sav-
ings plan described in subchapter III of title 5,
that satisfies the requirements of section 8433(g)
of that title.’’; and
(4) by adding at the end of the flush material
following paragraph (19) the following: ‘‘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) 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, as amended by section 202,
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,
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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 (29 U.S.C. 1108(b)(1)); or
‘‘(B) a loan from the thrift savings plan de-
scribed in subchapter III of title 5, that satisfies
the requirements of section 8433(g) of that 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) of the Internal Revenue Code of 1986
constitutes a claim or a debt under this title.’’.
(d) PLAN CONTENTS.—Section 1322 of title 11, United
States Code, is amended by adding at the end the following:
‘‘(f) A plan may not materially alter the terms of a
loan described in section 362(b)(19).’’.
SEC. 331. 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
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vehicle or vessel if such operation was unlawful be-
cause the debtor was intoxicated from using alcohol,
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. 332. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, is
amended by adding at the end the following:
‘‘(4) The dollar amount in section 101(18) shall be ad-
justed at the same times and in the same manner as the
dollar amounts in paragraph (1) of this subsection, begin-
ning with the adjustment to be made on April 1, 2001.’’.
SEC. 333. ELIMINATION OF REQUIREMENT THAT FAMILY
FARMER AND SPOUSE RECEIVE OVER 50 PER-
CENT OF INCOME FROM FARMING OPER-
ATION IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is
amended by striking ‘‘the taxable year preceding the taxable
year’’ and inserting ‘‘at least one of the three calendar years
preceding the year’’.
SEC. 334. PROHIBITION OF RETROACTIVE ASSESSMENT OF
DISPOSABLE INCOME.
(a) Section 1225(b) of title 11, United States Code, is
amended by adding at the end the following:
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‘‘(3) If the plan provides for specific amounts of prop-
erty to be distributed on account of allowed unsecured
claims as required by paragraph (1)(B) of this subsection,
those amounts equal or exceed the debtor’s projected dispos-
able income for that period, and the plan meets the require-
ments for confirmation other than those of this subsection,
the plan shall be confirmed.
(b) Section 1229 of title 11, United States Code, is
amended by adding at the end the following:
‘‘(d)(1) A modification of the plan under this section
may not increase the amount of payments that were due
prior to the date of the order modifying the plan.
‘‘(2) A modification of the plan under this section to
increase payments based on an increase in the debtor’s dis-
posable income may not require payments to unsecured
creditors in any particular month greater than the debtor’s
disposable income for that month unless the debtor proposes
such a modification.
‘‘(3) A modification of the plan in the last year of the
plan shall not require payments that would leave the debtor
with insufficient funds to carry on the farming operation
after the plan is completed unless the debtor proposes such
a modification.’’.
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SEC. 335. 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 payments, or dis-
ability payments for a dependent child made in accordance
with applicable nonbankruptcy law and which is reason-
ably necessary to be expended)’’.
SEC. 336. PROTECTION OF SAVINGS EARMARKED FOR THE
POSTSECONDARY EDUCATION OF CHILDREN
Section 541(b) of title 11, United States Code, as
amended by section 404 of this Act, is amended—
(1) in paragraph (6), by striking the period at
the end and inserting a semicolon; and
(2) by inserting after paragraph (6) the follow-
ing:
‘‘(7) except as otherwise provided under applica-
ble State law, any funds placed in a qualified State
tuition program (as described in section 529(b) of the
Internal Revenue Code of 1986) at least 180 days be-
fore the date of entry of the order for relief; or
‘‘(8) any funds placed in an education individ-
ual retirement account (as defined in section
530(b)(1) of the Internal Revenue Code of 1986) at
least 180 days before the date of entry of the order for
relief.’’.
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TITLE IV—FINANCIAL
INSTRUMENTS
SEC. 401. BANKRUPTCY CODE AMENDMENTS.
(a) DEFINITIONS OF SWAP AGREEMENT, SECURITIES
CONTRACT, FORWARD CONTRACT, COMMODITY CONTRACT,
AND REPURCHASE AGREEMENT.—Title 11, United States
Code, is amended—
(1) in section 101—
(A) in paragraph (25)—
(i) by striking ‘‘means a contract’’ and
inserting ‘‘means—
‘‘(A) a contract’’;
(ii) by striking ‘‘, or any combination
thereof or option thereon;’’ and inserting ‘‘,
or any other similar agreement;’’; and
(iii) by adding at the end the following
new subparagraphs:
‘‘(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
‘‘(C) any option to enter into any agree-
ment or transaction referred to in subparagraph
(A) or (B);
‘‘(D) a master agreement that provides for
an agreement or transaction referred to in sub-
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paragraph (A), (B) or (C), together with all sup-
plements to any such master agreement, without
regard to whether the master agreement provides
for an agreement or transaction that is not a
forward contract under this paragraph, except
that the master agreement shall be considered to
be a forward contract under this paragraph only
with respect to each agreement or transaction
under the master agreement that is referred to in
subparagraph (A), (B) or (C); or
‘‘(E) a security agreement or arrangement
or other credit enhancement related to any agree-
ment or transaction referred to in subparagraph
(A), (B), (C) or (D);’’;
(B) by amending paragraph (47) to read as
follows:
‘‘(47) the term ‘repurchase agreement’ (which
definition also applies to a reverse repurchase agree-
ment)—
‘‘(A) means—
‘‘(i) an agreement, including related
terms, which provides for the transfer of 1
or more certificates of deposit, mortgage-re-
lated securities (as such term is defined in
the Securities Exchange Act of 1934), mort-
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gage loans, interests in mortgage-related se-
curities or mortgage loans, eligible bankers’
acceptances, qualified foreign government
securities or securities that are direct obli-
gations of, or that are fully guaranteed as
to principal and interest by, the United
States or any agency of the United States
against the transfer of funds by the trans-
feree of such certificates of deposit, eligible
bankers’ acceptances, securities, loans or in-
terests with a simultaneous agreement by
such transferee to transfer to the transferor
thereof certificates of deposit, eligible bank-
ers’ acceptances, securities, loans, or inter-
ests as described above, at a date certain not
later than 1 year after such transfers or on
demand, against the transfer of funds; or
any other similar agreement; and
‘‘(ii) any combination of agreements or
transactions referred to in clauses (i) and
(iii);
‘‘(iii) any option to enter into any
agreement or transaction referred to in
clause (i) or (ii);
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‘‘(iv) a master agreement that provides
for an agreement or transaction referred to
in clauses (i), (ii) or (iii), together with all
supplements, without regard to whether the
master agreement provides for an agreement
or transaction that is not a repurchase
agreement under this subparagraph, except
that the master agreement shall be consid-
ered to be a repurchase agreement under
this subparagraph only with respect to each
agreement or transaction under the master
agreement that is referred to in clause (i),
(ii) or (iii); or
‘‘(v) a security agreement or arrange-
ment or other credit enhancement related to
any agreement or transaction referred to in
clauses (i), (ii), (iii) or (iv); and
‘‘(B) does not include any repurchase obli-
gation under a participation in a commercial
mortgage loan,
and, for purposes of this paragraph, the term ‘quali-
fied foreign government security’ means a security
that is a direct obligation of, or that is fully guaran-
teed by, the central government of a member of the
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Organization for Economic Cooperation and Develop-
ment.’’; and
(C) by amending paragraph (53B) to read
as follows:
‘‘(53B) the term ‘swap agreement’—
‘‘(A) means—
‘‘(i) any agreement, including the
terms and conditions incorporated by ref-
erence in any such agreement, which is an
interest rate swap, option, future, or for-
ward agreement, including a rate floor, rate
cap, rate collar, cross-currency rate swap,
and basis swap; a spot, same day-tomorrow,
tomorrow-next, forward, or other foreign ex-
change or precious metals agreement; a cur-
rency swap, option, future, or forward
agreement; an equity index or equity swap,
option, future, or forward agreement; a debt
index or debt swap, option, future, or for-
ward agreement; a credit spread or credit
swap, option, future, or forward agreement;
a commodity index or commodity swap, op-
tion, future, or forward agreement;
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‘‘(ii) any agreement similar to any
other agreement or transaction referred to
in this subparagraph that—
‘‘(I) is presently, or in the future
becomes, regularly entered into in the
swap agreement market (including
terms and conditions incorporated by
reference therein); and
‘‘(II) is a forward, swap, future,
or option on 1 or more rates, cur-
rencies, commodities, equity securities
or other equity instruments, debt secu-
rities or other debt instruments, or eco-
nomic indices or measures of economic
risk or value;
‘‘(iii) any combination of agreements
or transactions referred to in this subpara-
graph;
‘‘(iv) any option to enter into any
agreement or transaction referred to in this
subparagraph;
‘‘(v) a master agreement that provides
for an agreement or transaction referred to
in clause (i), (ii), (iii), or (iv), together
with all supplements to any such master
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agreement, without regard to whether the
master agreement contains an agreement or
transaction that is described in any of such
clause, except that the master agreement
shall be considered to be a swap agreement
only with respect to each agreement or
transaction under the master agreement
that is referred to in clause (i), (ii), (iii),
or (iv); or
‘‘(C) is applicable for purposes of this title
only and shall not be construed or applied to
challenge or affect the characterization, defini-
tion, or treatment of any swap agreement or any
instrument defined as a swap agreement herein,
under any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Securities
Exchange Act of 1934, the Public Utility Hold-
ing Company Act of 1935, the Trust Indenture
Act of 1939, the Investment Company Act of
1940, the Investment Advisers Act of 1940, the
Securities Investor Protection Act of 1970, the
Commodity Exchange Act, and the regulations
prescribed by the Securities and Exchange Com-
mission or the Commodity Futures Trading
Commission.’’;
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(2) by amending section 741(7) to read as fol-
lows:
‘‘(7) the term ‘securities contract’—
‘‘(A) means—
‘‘(i) a contract for the purchase, sale,
or loan of a security, a certificate of deposit,
a mortgage loan or any interest in a mort-
gage loan, or a group or index of securities,
certificates of deposit, or mortgage loans or
interests therein (including any interest
therein or based on the value thereof) or op-
tion on any of the foregoing, including any
option to purchase or sell any such security,
certificate of deposit, loan, interest, group or
index or option;
‘‘(ii) any option entered into on a na-
tional securities exchange relating to foreign
currencies;
‘‘(iii) the guarantee by or to any secu-
rities clearing agency of any settlement of
cash, securities, certificates of deposit, mort-
gage loans or interest therein, or group or
index of securities, certificates of deposit, or
mortgage loans or interests therein (includ-
ing any interest therein or based on the
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value thereof) or option on any of the fore-
going, including any option to purchase or
sell any such security, certificate of deposit,
loan, interest, group or index or option;
‘‘(iv) any margin loan;
‘‘(v) any other agreement or trans-
action that is similar to any agreement or
transaction referred to in this subpara-
graph;
‘‘(vi) any combination of the agree-
ments or transactions referred to in this
subparagraph;
‘‘(vii) any option to enter into any
agreement or transaction referred to in this
subparagraph;
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii), together with all supplements
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that
is not a securities contract under this sub-
paragraph, except that the master agree-
ment shall be considered to be a securities
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contract under this subparagraph only with
respect to each agreement or transaction
under the master agreement that is referred
to in clause (i), (ii), (iii), (iv), (v), (vi), or
(vii); and
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in this subparagraph; and
‘‘(B) does not include any purchase, sale, or
repurchase obligation under a participation in
or servicing agreement for a commercial mort-
gage loan.’’; and
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and
(B) by adding at the end the following new
subparagraphs:
‘‘(F) any other agreement or transaction
that is similar to any agreement or transaction
referred to in this paragraph;
‘‘(G) any combination of the agreements or
transactions referred to in this paragraph;
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‘‘(H) any option to enter into any agree-
ment or transaction referred to in this para-
graph;
‘‘(I) a master agreement that provides for
an agreement or transaction referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G) or
(H), together with all supplements to any such
master agreement, without regard to whether the
master agreement provides for an agreement or
transaction that is not a commodity contract
under this paragraph, except that the master
agreement shall be considered to be a commodity
contract under this paragraph only with respect
to each agreement or transaction under the mas-
ter agreement that is referred to in subparagraph
(A), (B), (C), (D), (E), (F), (G) or (H); or
‘‘(J) a security agreement or arrangement
or other credit enhancement related to any agree-
ment or transaction referred to in this para-
graph;’’.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINAN-
CIAL
PARTICIPANT, 
AND
FORWARD
CONTRACT
MER-
CHANT.—Section 101 of title 11, United States Code, is
amended—
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(1) by amending paragraph (22) to read as fol-
lows:
‘‘(22) the term ‘financial institution’ means a
Federal reserve bank, or a person that is a commer-
cial or savings bank, industrial savings bank, savings
and loan association, trust company, or receiver or
conservator for such person and, when any such Fed-
eral reserve bank, receiver, or conservator or person
acting as agent or custodian for a customer in con-
nection with a securities contract, as defined in sec-
tion 741(7) of this title, such customer;’’;
(2) by inserting after paragraph (22) the follow-
ing new paragraph:
‘‘(22A) the term ‘financial participant’ means
any entity that, at the time it enters into a securities
contract, commodity contract or forward contract, or
at the time of the filing of the petition, has 1 or more
agreements or transactions that is described in section
561(a)(2) with the debtor or any other entity (other
than an affiliate) of a total gross dollar value of at
least $1,000,000,000 in notional or actual principal
amount outstanding on any day during the previous
15-month period, or has gross mark-to-market posi-
tions of at least $100,000,000 (aggregated across
counterparties) in 1 or more such agreements or
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transactions with the debtor or any other entity
(other than an affiliate) on any day during the pre-
vious 15-month period;’’; and
(3) by amending paragraph (26) to read as fol-
lows:
‘‘(26) the term ‘forward contract merchant’
means a Federal reserve bank, or a person whose busi-
ness consists in whole or in part of entering into for-
ward contracts as or with merchants or in a commod-
ity, as defined or in section 761(8) of this title, or
any similar good, article, service, right, or interest
which is presently or in the future becomes the subject
of dealing or in the forward contract trade;’’.
(c) DEFINITION
OF MASTER NETTING AGREEMENT
AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec-
tion 101 of title 11, United States Code, is amended by in-
serting after paragraph (38) the following new paragraphs:
‘‘(38A) the term ‘master netting agreement’
means an agreement providing for the exercise of
rights, including rights of netting, setoff, liquidation,
termination, acceleration, or closeout, under or in
connection with 1 or more contracts that are de-
scribed in any 1 or more of paragraphs (1) through
(5) of section 561(a), or any security agreement or
arrangement or other credit enhancement related to 1
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or more of the foregoing. If a master netting agree-
ment contains provisions relating to agreements or
transactions that are not contracts described in para-
graphs (1) through (5) of section 561(a), the master
netting agreement shall be deemed to be a master net-
ting agreement only with respect to those agreements
or transactions that are described in any 1 or more
of the paragraphs (1) through (5) of section 561(a);
‘‘(38B) the term ‘master netting agreement par-
ticipant’ means an entity that, at any time before the
filing of the petition, is a party to an outstanding
master netting agreement with the debtor;’’.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS,
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
CHASE AGREEMENTS, AND MASTER NETTING AGREEMENTS
UNDER THE AUTOMATIC-STAY.—
(1) IN
GENERAL.—Section 362(b) of title 11,
United States Code, is amended—
(A) 
in 
paragraph 
(6), 
by 
inserting
‘‘, pledged to, and under the control of,’’ after
‘‘held by’’;
(B) 
in 
paragraph 
(7), 
by 
inserting
‘‘, pledged to, and under the control of,’’ after
‘‘held by’’;
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(C) by amending paragraph (17) to read as
follows:
‘‘(17) under subsection (a), of the setoff by a
swap participant of any mutual debt and claim
under or in connection with 1 or more swap agree-
ments that constitute the setoff of a claim against the
debtor for any payment due from the debtor under or
in connection with any swap agreement against any
payment due to the debtor from the swap participant
under or in connection with any swap agreement or
against cash, securities, or other property of the debt-
or held by, pledged to, and under the control of, or
due from such swap participant to guarantee, secure,
or settle any swap agreement;’’;
(D) in paragraph (20), by striking ‘‘or’’ at
the end;
(E) in paragraph (21), by striking the pe-
riod and inserting ‘‘; or’’; and
(F) by inserting after paragraph (18) the
following new paragraph:
‘‘(22) under subsection (a), of the setoff by a
master netting agreement participant of a mutual
debt and claim under or in connection with 1 or more
master netting agreements to the extent such partici-
pant could offset the claim under paragraph (6), (7),
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contract covered by the master netting agreement
in issue.’’.
(g) TERMINATION OR ACCELERATION OF SECURITIES
CONTRACTS.—Section 555 of title 11, United States Code,
is amended—
(1) by amending the section heading to read
‘‘Contractual right to liquidate, termi-
nate, or accelerate a securities contract’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(h) TERMINATION
OR ACCELERATION
OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11,
United States Code, is amended—
(1) by amending the section heading to read
‘‘Contractual right to liquidate, termi-
nate, or accelerate a commodities con-
tract or forward contract’’; and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(i) TERMINATION OR ACCELERATION OF REPURCHASE
AGREEMENTS.—Section 559 of title 11, United States Code,
is amended—
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(1) by amending the section heading to read
‘‘Contractual right to liquidate, termi-
nate, or accelerate a repurchase agree-
ment’’; and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF
SWAP AGREEMENTS.—Section 560 of title 11, United States
Code, is amended—
(1) by amending the section heading to read
‘‘Contractual right to liquidate, termi-
nate, or accelerate a swap agreement’’; and
(2) in the first sentence, by striking ‘‘termi-
nation of a swap agreement’’ and inserting ‘‘liquida-
tion, termination, or acceleration of 1 or more swap
agreements’’; and
(3) by striking ‘‘in connection with any swap
agreement’’ and inserting ‘‘in connection with the ter-
mination, liquidation, or acceleration of 1 or more
swap agreements’’.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR
OFFSET UNDER
A MASTER NETTING AGREEMENT
AND
ACROSS CONTRACTS.—Title 11, United States Code, is
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amended by inserting after section 560 the following new
section:
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting
agreement and across contracts
‘‘(a) IN GENERAL.—Subject to subsection (b), the exer-
cise of any contractual right, because of a condition of the
kind specified in section 365(e)(1), to cause the termination,
liquidation, or acceleration of or to offset, or net termi-
nation values, payment amounts or other transfer obliga-
tions arising under or in connection with the termination,
liquidation, or acceleration of 1 or more—
‘‘(1) securities contracts, as defined in section
741(7);
‘‘(2) commodity contracts, as defined in section
761(4);
‘‘(3) forward contracts;
‘‘(4) repurchase agreements;
‘‘(5) swap agreements; or
‘‘(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by oper-
ation of any provision of this title or by any order of a
court or administrative agency in any proceeding under
this title.
‘‘(b) EXCEPTION.—
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‘‘(1) A party may exercise a contractual right
described in subsection (a) to terminate, liquidate, or
accelerate only to the extent that such party could ex-
ercise such a right under section 555, 556, 559, or
560 for each individual contract covered by the mas-
ter netting agreement in issue.
‘‘(2)(A) A party may not exercise a contractual
right described in subsection (a) to offset or to net ob-
ligations arising under, or in connection with, a com-
modity contract against obligations arising under, or
in connection with, any instrument listed in sub-
section (a) if the obligations are not mutual.
‘‘(B) If a debtor is a commodity broker subject
to subchapter IV of chapter 7 of this title, a party
may not net or offset an obligation to the debtor aris-
ing under, or in connection with, a commodity con-
tract against any claim arising under, or in connec-
tion with, other instruments listed in subsection (a)
if the party has no positive net equity in the commod-
ity account at the debtor, as calculated under sub-
chapter IV.
‘‘(c) DEFINITION.—As used in this section, the term
‘contractual right’ includes a right set forth in a rule or
bylaw of a national securities exchange, a national securi-
ties association, or a securities clearing agency, a right set
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forth in a bylaw of a clearing organization or contract mar-
ket or in a resolution of the governing board thereof, and
a right whether or not evidenced in writing arising under
common law, under law merchant, or by reason of normal
business practice.’’.
(l) MUNICIPAL BANKRUPTCIES.—Section 901 of title
11, United States Code, is amended—
(1) by inserting ‘‘, 555, 556’’ after ‘‘553’’; and
(2) by inserting ‘‘, 559, 560, 561, 562’’ after
‘‘557’’.
(m) ANCILLARY PROCEEDINGS.—Section 304 of title
11, United States Code, is amended by adding at the end
the following new subsection:
‘‘(d) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repur-
chase agreements, swap agreements, or master netting
agreements shall apply in a case ancillary to a foreign pro-
ceeding under this section or any other section of this title
so that enforcement of contractual provisions of such con-
tracts and agreements in accordance with their terms will
not be stayed or otherwise limited by operation of any pro-
vision of this title or by order of a court in any proceeding
under this title, and to limit avoidance powers to the same
extent as in a proceeding under chapter 7 or 11 of this title
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(such enforcement not to be limited based on the presence
or absence of assets of the debtor in the United States).’’.
(n) COMMODITY BROKER LIQUIDATIONS.—Title 11,
United States Code, is amended by inserting after section
766 the following new section:
‘‘§ 767. Commodity broker liquidation and forward
contract merchants, commodity brokers,
stockbrokers, financial institutions, secu-
rities clearing agencies, swap partici-
pants, repo participants, and master net-
ting agreement participants
‘‘Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commod-
ity broker, stockbroker, financial institution, securities
clearing agency, swap participant, repo participant, or
master netting agreement participant under this title shall
not affect the priority of any unsecured claim it may have
after the exercise of such rights or affect the provisions of
this subchapter IV regarding customer property or distribu-
tions.’’.
(o) STOCKBROKER LIQUIDATIONS.—Title 11, United
States Code, is amended by inserting after section 752 the
following new section:
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‘‘§ 753. Stockbroker liquidation and forward contract
merchants, 
commodity 
brokers, 
stock-
brokers, financial institutions, securities
clearing agencies, swap participants, repo
participants, and master netting agree-
ment participants
‘‘Notwithstanding any other provision of this title, the
exercise of rights by a forward contract merchant, commod-
ity broker, stockbroker, financial institution, securities
clearing agency, swap participant, repo participant, or
master netting agreement participant under this title shall
not affect the priority of any unsecured claim it may have
after the exercise of rights or affect the provisions of this
subchapter regarding customer property or distributions.’’.
(p) SETOFF.—Section 553 of title 11, United States
Code, is amended—
(1) in subsection (a)(3)(C), by inserting ‘‘(except
for a setoff of a kind described in section 362(b)(6),
362(b)(7), 362(b)(17), 555, 556, 559, 560, or 561 of
this title)’’ before the period; and
(2) 
in 
subsection 
(b)(1), 
by 
striking
‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 555, 556,
559, 560, 561’’.
(q) SECURITIES CONTRACTS, COMMODITY CONTRACTS,
AND FORWARD CONTRACTS.—Title 11, United States Code,
is amended—
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(1) in section 362(b)(6), by striking ‘‘financial
institutions,’’ each place such term appears and in-
serting ‘‘financial institution, financial participant’’;
(2) in section 546(e), by inserting ‘‘financial
participant’’ after ‘‘financial institution,’’;
(3) in section 548(d)(2)(B), by inserting ‘‘finan-
cial participant’’ after ‘‘financial institution,’’;
(4) in section 555—
(A) by inserting ‘‘financial participant’’
after ‘‘financial institution,’’; and
(B) by inserting before the period ‘‘, a right
set forth in a bylaw of a clearing organization
or contract market or in a resolution of the gov-
erning board thereof, and a right, whether or not
in writing, arising under common law, under
law merchant, or by reason of normal business
practice’’; and
(5) in section 556, by inserting ‘‘, financial par-
ticipant’’ after ‘‘commodity broker’’.
(r) TECHNICAL AND CONFORMING AMENDMENT.—Sec-
tion 104 of title 11, United States Code, is amended by add-
ing at the end the following new subsection:
‘‘(c) EXCEPTION FOR CERTAIN DEFINED TERMS.—No
adjustments shall be made under this section to the dollar