Helping Families Save Their Homes in Bankruptcy Act of 2009

Bill: 111-hr-200
Sponsor: Rep. Conyers, John, Jr. [D-MI-14]
Introduced: 2009-01-06 in the House
Policy area: Finance and Financial Sector
Subjects: Bankruptcy
Consumer credit
Housing finance and home ownership

Summary:
action_date: 2009-01-06
text: 
Helping Families Save their Homes in Bankruptcy Act of 2009 - Amends federal bankruptcy law governing a Chapter 13 debtor (adjustment of debts of an individual with regular income). Excludes from computation of debts the secured or unsecured portions of: (1) debts secured by the debtor's principal residence if the current value of that residence is less than the secured debt limit; or (2) debts secured or formerly secured by debtor's principal residence that was either sold in foreclosure or surrendered to the creditor if the current value of such real property is less than the secured debt limit.
 
Declares the credit counseling requirement inapplicable to a Chapter 13 debtor who certifies that he or she has received notice that the holder of a claim secured by the debtor's principal residence may commence a foreclosure on the debtor's principal residence.
 
Requires the court to disallow a claim that is subject to any remedy for damages or rescission due to violations of state or federal consumer protection law, including the Truth in Lending Act, notwithstanding the prior entry of a foreclosure judgment.
 

 

 
Allows modification of the rights of claim holders, in the event of a foreclosure notice for a chapter 13 debtor, among other means by: (1) reducing a claim to equal the value of the debtor's interest in the residence securing such claim, and any adjustments to a related adjustable rate of interest; (2) waiving early repayment or prepayment penalties; and (3) extending the repayment period.
 
Denies debtor liability for certain fees and charges incurred while the bankruptcy case is pending and arising from a debt secured by the debtor's principal residence, unless the claim holder observes specified requirements.
 
Adds to conditions for court confirmation of a plan in bankruptcy that: (1) the holder of a claim secured by the debtor's principal residence retain the lien securing the claim until the later of the payment of such claim as reduced and modified or the discharge of a debtor from all debts; and (2) the plan modifies the claim in good faith. 
 
Excludes from final discharge of a debtor from all debts: (1) any payments to claim holders whose rights are modified under this Act; and (2) any unpaid portion of a claim as reduced.

action_date: 2009-02-24
text: 
Helping Families Save their Homes in Bankruptcy Act of 2009 - (Sec. 1) Amends federal bankruptcy law governing a Chapter 13 debtor (adjustment of debts of an individual with regular income). Excludes from computation of debts the secured or unsecured portions of: (1) debts secured by the debtor's principal residence if the current value of that residence is less than the secured debt limit; or (2) debts secured or formerly secured by a debtor's principal residence that was either sold in foreclosure or surrendered to the creditor if the current value of such real property is less than the secured debt limit.
 
(Sec. 2) Declares the credit counseling requirement inapplicable to a Chapter 13 debtor who certifies that he or she has received notice that the holder of a claim secured by the debtor's principal residence may commence a foreclosure on the debtor's principal residence.
 
(Sec. 3) Requires the court to disallow a claim for a loan secured by a security interest in the debtor's principal residence that is subject to remedy for damages or rescission due to violations of the Truth in Lending Act, notwithstanding prior entry of a foreclosure judgment. Prohibits construction of such disallowance to modify, impair, or supersede any other right of the debtor.
 
(Sec. 4) Allows modification of claim holders' rights in connection with a foreclosure notice for a chapter 13 debtor whose loan originated before the effective date of this Act. Allows changing an adjustable rate of interest to a fixed rate, and extending the repayment period.
 
Prescribes conditions for reducing a claim under this Act if the debtor receives net proceeds from the sale of the principal residence before receiving a discharge in bankruptcy.
 
Establishes requirements for modification of other kinds of claims for a loan secured by a security interest in the debtor's principal residence.
 
(Sec. 5) Denies debtor liability for certain fees and charges incurred while the bankruptcy case is pending and arising from a debt secured by the debtor's principal residence, unless the claim holder observes specified requirements.
 
(Sec. 6) Adds to conditions for court confirmation of a plan in bankruptcy that: (1) the holder of a claim for a loan secured by the debtor's principal residence retain the lien securing the claim until the later of the payment of such claim as reduced and modified or the discharge of a debtor from all debts; and (2) the plan modifies the claim in good faith and the court finds that the debtor did not obtain the modified claim by the debtor's material misrepresentation, false pretenses, or actual fraud.
 
(Sec. 7) Excludes from final discharge of a debtor from all debts: (1) any payments to claim holders whose rights are modified under this Act; and (2) any unpaid portion of a claim as reduced.
 
(Sec. 8) Prohibits the construction of this Act to modify any obligation of the Federal Housing Administration (FHA), the Veterans Administration (VA), or the Department of Agriculture under a contract that guarantees or insures payment of a loan secured by a security interest in a principal residence.


Legislative actions:
action_date: 2009-02-24
text: Placed on the Union Calendar, Calendar No. 7.
action_date: 2009-02-24
text: Reported (Amended) by the Committee on Judiciary. H. Rept. 111-19.
action_date: 2009-02-24
text: Reported (Amended) by the Committee on Judiciary. H. Rept. 111-19.
action_date: 2009-01-27
text: Ordered to be Reported (Amended) by the Yeas and Nays: 21 - 15.
action_date: 2009-01-27
text: Committee Consideration and Mark-up Session Held.
action_date: 2009-01-22
text: Committee Hearings Held.
action_date: 2009-01-06
text: Referred to the House Committee on the Judiciary.
action_date: 2009-01-06
text: Introduced in House
action_date: 2009-01-06
text: Introduced in House