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Sec.
214. Exceptions To Automatic
Stay in Domestic Support Proceedings. Under current law, section
362(b)(2) of the
Bankruptcy
Code excepts from the automatic stay the commencement or continuation of
an action or proceeding: (1) for the establishment of paternity;
or (2) the establishment or modification of an order for alimony,
maintenance or support. It also permits the collection of such obligations
from property that is not property of the estate. Section
214 makes several revisions to
Bankruptcy Code section 362(b)(2).
First, it replaces the reference to "alimony, maintenance or support" with
"domestic support obligations."
Second, it adds to section 362(b)(2)
actions or proceedings concerning: (1) child custody or visitation;
(2) the dissolution of a marriage (except to the extent such proceeding
seeks division of property that is property of the estate); and (3)
domestic violence. Third, it permits the withholding of income that is property
of the estate or property of the
debtor for payment
of a domestic support
obligation under a judicial or administrative order as well as the withholding,
suspension, or restriction of a driver's license, or a professional, occupational
or recreational license under state law, pursuant to section 466(a)(16)
of the Social Security Act. Fourth, it authorizes the reporting of overdue
support owed by a parent to any consumer reporting agency pursuant to section
466(a)(7) of the Social Security Act. Fifth, it permits the interception
of tax refunds as authorized by sections 464 and 466(a)(3) of the Social
Security Act or analogous state law. Sixth, it allows medical obligations,
as specified under title IV of the Social Security Act, to be enforced notwithstanding
the automatic stay.
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Sec.
215. Nondischargeability of Certain
Debts for Alimony, Maintenance, and Support. Section
215 of the Act amends
Bankruptcy
Code section 523(a)(5) to
provide that a "domestic
support obligation" (as defined in section 211 of the Act) is nondischargeable
and eliminates Bankruptcy Code section
523(a)(18). Section
215(2) amends
Bankruptcy Code
section 523(c) to delete
the reference to section 523(a)(15)
in that provision. Section 215(3)
amends section 523(a)(15)
to provide that obligations to a spouse, former spouse, or a child of the
debtor (not otherwise
described in section 523(a)(5))
incurred in connection with a divorce or separation or related action are
nondischargeable irrespective of the
debtor's inability
to pay such debts.
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Sec.
216. Continued Liability of Property.
Section 216(1) of the Act amends
section 522(c) of the
Bankruptcy
Code to make exempt property liable for nondischargeable
domestic support obligations
notwithstanding any contrary provision of applicable nonbankruptcy law.
Section 216(2) and
(3) make conforming amendments
to sections 522(f)(1)(A)
and 522(g)(2) of the
Bankruptcy
Code.
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Sec.
219. Collection of Child Support.
Section 219 amends sections
704,
1106,
1202, and
1302 of the
Bankruptcy
Code to require trustees in chapter
7,
11,
12, and
13 cases to provide certain
notices to child support claimants and governmental enforcement agencies.
In addition, the Act conforms internal statutory cross references to
Bankruptcy
Code section 523(a)(14A)
and deletes the reference to Bankruptcy Code section
523(a)(14) with respect
to chapter 13, as this provision
is inapplicable to that chapter.
Section 219(a) requires a chapter
7 trustee to provide written
notice to a domestic support claimant of the right to use the services of
a state child support enforcement agency established under sections 464
and 466 of the Social Security Act in the state where the claimant resides
for assistance in collecting child support during and after the bankruptcy
case. The notice must include the agency's address and telephone number
as well as explain the claimant's right to payment under the applicable
chapter of the Bankruptcy Code. In addition, the trustee must provide written
notice to the claimant and the agency of such
claim and include
the name, address, and telephone number of the child support claimant. At
the time the debtor
is granted a discharge, the trustee must notify both the child support claimant
and the agency that the
debtor was granted
a discharge as well as supply them with the
debtor's last known
address, the last known name and address of the
debtor's employer,
and the name of each
creditor holding a
debt that is not
discharged under section 523(a)(2),
(4) or
(14A) or holding a
debt that was reaffirmed
pursuant to Bankruptcy Code section
524. A claimant or agency
may request the debtor's
last known address from a
creditor holding
a debt that is not
discharged under section 523(a)(2),
(4) or
(14A) or that is reaffirmed
pursuant to section 524 of
the Bankruptcy Code. A
creditor who discloses
such information, however, is not liable to the
debtor or any other
person by reason
of such disclosure. Subsections
(b), (c), and
(d) of section
219 of the Act impose comparable
requirements for chapter 11,
12, and
13 trustees.
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Sec.
220. Nondischargeability of Certain
Educational Benefits and Loans. Section
220 of the Act amends section
523(a)(8) of the
Bankruptcy
Code to provide that a
debt for a qualified
education loan (as defined in section
221(e)(1)
of the Internal Revenue Code) is nondischargeable, unless excepting such
debt from discharge
would impose an undue hardship on the
debtor and the
debtor's dependents.
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Subtitle
C. Other Consumer Protections
Sec.
221. Amendments To Discourage
Abusive Bankruptcy Filings. Section
221 of the Act makes a series
of amendments to section 110
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[SIC]
So in the original. The term "qualified education loan" is defined
in section 26 U.S.C. 221(d)(1),
not 221(e)(1). The changes made by § 220 of the Act contain
the proper reference to 26 U.S.C. 221(d)(1). •
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of the
Bankruptcy
Code. First, section
221 clarifies that the definition
of a bankruptcy petition preparer
does not include an attorney
for a debtor or
an employee of an attorney
under the direct supervision of such
attorney.
Second, it amends subsections
(b) and
(c) of section
110 to provide that if a
bankruptcy petition preparer
is not an individual, then an officer, principal, responsible
person, or partner
of the preparer must sign certain documents filed in connection with the
bankruptcy case as well as state the person's name and address on such documents.
Third, it requires a
bankruptcy petition preparer
to give the debtor
written notice (as prescribed by the Judicial Conference of the United States)
explaining that the preparer is not an
attorney and
may not practice
law or give legal advice. The notice may include examples of legal advice
that a preparer may not
provide. Such notice must be signed by the preparer under penalty of perjury
and the debtor and
be filed with any
document for
filing. Fourth, the
petition preparer
is prohibited from giving legal advice, including with respect to certain
specified items. Fifth,
it permits the Supreme Court to promulgate rules or the Judicial Conference
of the United States to issue guidelines for setting the maximum fees that
a bankruptcy petition preparer
may charge for services. Sixth,
section 221 requires the preparer
to notify the debtor
of such maximum fees. Seventh,
it specifies that the bankruptcy
petition preparer must certify that it complied with this notification
requirement. Eighth, it
requires the court to order the turnover of any fees in excess of the value
of the services rendered by the preparer within the 12-month period preceding
the bankruptcy filing. Ninth,
section 221 provides that all
fees charged by a preparer may be forfeited if the preparer fails to comply
with certain requirements specified in Bankruptcy Code section
110, as amended by this provision.
Tenth, it allows a
debtor to exempt
fees recovered under this provision pursuant to Bankruptcy Code section
522(b).
Eleventh, it specifically
authorizes the court to enjoin a
bankruptcy petition preparer
who has violated a court order issued under section
110.
Twelfth, it generally revises
section 110's penalty provisions
and requires such penalties to be paid into a special fund of the United
States trustee for the purpose of funding the enforcement of section
110 on a national basis. With
respect to Bankruptcy Administrator districts, the funds are to be deposited
as offsetting receipts pursuant to section 1931 of title
28 of the United States
Code.
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Sec.
222. Sense of Congress.
Section 222 of the Act expresses
the sense of Congress that the states should develop personal finance curricula
for use in elementary and secondary schools.
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Sec.
223. Additional Amendments to
Title 11, United States Code. Section
223 of the Act amends section
507(a) of the
Bankruptcy
Code to accord a tenth-level priority to
claims for death
or personal injuries resulting from the
debtor's operation
of a motor vehicle or vessel while intoxicated.
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Sec.
224. Protection of Retirement
Savings in Bankruptcy. The intent of section
224 is to expand the protection
for tax-favored retirement plans or arrangements that
may not be already
protected under Bankruptcy Code section
541(c)(2) pursuant to
Patterson v.
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Shumate,
84
or other state or Federal law. Subsection
(a) of section
224 of the Act amends section
522 of the
Bankruptcy Code
to permit a debtor
to exempt certain retirement funds to the extent those monies 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 and that have received
a favorable determination pursuant to Internal Revenue Code section 7805
that is in effect as of the date of the commencement of the case. If the
retirement monies are in a retirement fund that has not received a favorable
determination, those monies are exempt if the
debtor demonstrates
that no prior unfavorable determination has been made by a court or the
Internal Revenue Service, and the retirement fund is in substantial compliance
with the applicable requirements of the Internal Revenue Code. If the retirement
fund fails to be in substantial compliance with applicable requirements
of the Internal Revenue Code, the
debtor may claim
the retirement funds as exempt if he or she is not materially responsible
for such failure. This section also applies to certain direct transfers
and rollover distributions. In addition, this provision ensures that the
specified retirement funds are exempt under state as well as Federal law.
Section 224(b) amends section
362(b) of the
Bankruptcy
Code to except from the automatic stay the withholding of income from a
debtor's wages pursuant
to an agreement authorizing such withholding for the benefit of a pension,
profit-sharing, stock bonus, or other employer-sponsored plan established
under Internal Revenue Code section 401, 403, 408, 408A, 414, 457, or 501(c)
to the extent that the amounts withheld are used solely to repay a loan
from a plan as authorized by section 408(b)(1) of the Employee Retirement
Income Security Act of 1974 or subject to Internal Revenue Code section
72(p) or with respect to a loan from certain thrift savings plans. Section
224(b) further provides that
this exception may not
be used to cause any loan made under a governmental plan under section 414(d)
or a contract or account under section 403(b) of the Internal Revenue Code
to be construed to be a
claim or
debt within the
meaning of the Bankruptcy Code.
Section 224(c) amends
Bankruptcy
Code section 523(a)
to except from discharge any amount owed by the
debtor to a pension,
profit-sharing, stock bonus, or other plan established under Internal Revenue
Code section 401, 403, 408, 408A, 414, 457, or 501(c) under a loan authorized
under section 408(b)(1) of the Employee Retirement Income Security Act of
1974 or subject to Internal Revenue Code section 72(p) or with respect to
a loan from certain thrift savings plans. Section
224(c) further provides that
this exception to discharge
may not be used to
cause any loan made under a governmental plan under section 414(d) or a
contract or account under section 403(b) of the Internal Revenue Code to
be construed to be a
claim or debt
within the meaning of the Bankruptcy Code.
Section 224(d) amends
Bankruptcy
Code section 1322 to provide
that a chapter 13 plan
may not materially
alter the terms of a loan described in section
362(b)(19) and that any
amounts required to repay such loan shall not constitute "disposable income"
under section 1325 of the
Bankruptcy Code.
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84.504 U.S. 753 (1992). •
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Section
224(e) amends section
522 of the
Bankruptcy Code
to impose a $1 million cap (periodically adjusted pursuant to section
104 of the
Bankruptcy Code
to reflect changes in the Consumer Price Index) on the value of the
debtor's interest
in an individual retirement account established under either section 408
or 408A of the Internal Revenue Code (other than a simplified employee pension
account under section 408(k) or a simple retirement account under section
408(p) of the Internal Revenue Code) that a
debtor may claim
as exempt property. This limit applies without regard to amounts attributable
to rollover contributions made pursuant to section 402(c), 402(e)(6), 403(a)(4),
403(a)(5), or 403(b)(8) of the Internal Revenue Code and earnings thereon.
The cap may be increased if required in the interests of justice.
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Sec.
225. Protection of Education
Savings in Bankruptcy. Subsection
(a) of section
225 of the Act amends section
541 of the
Bankruptcy Code
to provide that funds placed not later than 365 days before the filing of
the bankruptcy case in an education individual retirement account are not
property of the estate if certain criteria are met.
First, the designated beneficiary
of such account must be a child, stepchild, grandchild or step-grandchild
of the debtor for
the taxable year during which funds were placed in the account. A legally
adopted child or a foster child, under certain circumstances, may also qualify
as a designated beneficiary.
Second, such funds
may not be pledged
or promised to an entity
in connection with any extension of credit and they
may not be excess
contributions (as described in section 4973(e) of the Internal Revenue Code).
Funds deposited between 720
days and 365 days before the filing date are protected to the extent
they do not exceed $5,000. Similar criteria apply with respect to funds
used to purchase a tuition credit or certificate or to funds contributed
to a qualified state tuition plan under section 529(b)(1)(A) of the Internal
Revenue Code. Section 225(b)
amends Bankruptcy Code section
521 to require a
debtor to file with
the court a record of any interest that the
debtor has in an
education individual retirement account or qualified state tuition program.
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a nonprofit
organization exemption from taxation under section 501(c)(3) of the Internal
Revenue Code.
Third, it is inapplicable to a
creditor who assisted
such person to the
extent the assistance pertained to the restructuring of any
debt owed by the
person to the
creditor.
Fourth, the
definition does not apply to a depository institution (as defined in section
3 of the Federal Deposit Insurance Act), or any Federal or state credit
union (as defined in section 101
of the Federal Credit Union Act), as well as any
affiliate or subsidiary
of such depository institution or credit union.
Fifth, an
author, publisher, distributor, or seller of works subject to copyright
protection under title 17 of the United States Code when acting in such
capacity is not within the ambit of this definition.
Section 226(b) amends section
104(B)(1) of the
Bankruptcy
Code to permit the monetary amount set forth in the definition of an "assisted
person" to be automatically adjusted to reflect the change in the Consumer
Price Index.
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Sec.
227. Restrictions on Debt Relief
Agencies. Section 227
of the Act creates a new provision in the Bankruptcy Code intended to proscribe
certain activities of a
debt relief agency.
It prohibits such agency from: (1) failing to perform any service
that it informed an
assisted person
it would provide; (2) advising an
assisted person
to make an untrue and misleading statement (or that upon the exercise of
reasonable care, should have been known to be untrue or misleading) in a
document filed in a bankruptcy case; (3) misrepresenting the services
it provides and the benefits and risks of bankruptcy; and (4) advising
an assisted person
or prospective assisted
person to incur additional
debt in contemplation
of filing for bankruptcy relief or for the purpose of paying fees for services
rendered by an attorney
or petition preparer
in connection with the bankruptcy case. Any waiver by an
assisted person
of the protections under this provision are unenforceable, except against
a debt relief agency.
In addition, section 227 imposes
penalties for the violation of section
526,
527 or
528 of the
Bankruptcy Code.
First, any contract between
a debt relief agency
and an assisted person
that does not comply with these provisions is void and
may not be enforced
by any state or Federal court or by any
person, except an
assisted person.
Second, a
debt relief agency
is liable to an assisted
person, under certain circumstances, for any fees or charges paid by
such person to the agency, actual damages, and reasonable attorneys' fees
and costs. The chief law enforcement officer of a state who has reason to
believe that a person
has violated or is violating section
526 may seek to have such
violation enjoined and recover actual damages.
Third, section
227 provides that the United
States district court has concurrent jurisdiction of certain actions under
section 526.
Fourth, section
227 provides that sections
526,
527 and
528 preempt inconsistent state
law. In addition, it provides that these provisions do not limit or curtail
the authority of a Federal court, a state, or a subdivision or instrumentality
of a state, to determine and enforce qualifications for the practice of
law before the Federal court or under the laws of that state.
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(as amended
by this Act) as well as a notice advising that: (1) all information
the assisted person
provides in connection with the case must be complete, accurate and truthful;
(2) all assets and liabilities must be completely and accurately
disclosed in the documents filed to commence the case, including the replacement
value of each asset (if required) after reasonable inquiry to establish
such value; (3)
current monthly income,
monthly expenses and, in a chapter
13 case, disposable income,
must be stated after reasonable inquiry; and (4) the information
an assisted person
provides may be audited and that the failure to provide such information
may result in dismissal of the case or other sanction including, in some
instances, criminal sanctions. In addition, the agency must supply certain
specified advisories and explanations regarding the bankruptcy process.
Further, this provision requires the agency to advise an
assisted person
(to the extent permitted under nonbankruptcy law) concerning asset valuation,
the calculation of disposable income, and the determination of exempt property.
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Sec.
229. Requirements for Debt Relief
Agencies. Section 229
adds a provision to the Bankruptcy Code requiring a
debt relief agency—not
later than five business days after the first date on which it provides
any bankruptcy assistance
services to an assisted
person (but prior to such
assisted person's
bankruptcy petition
being filed)—to execute a written contract with the
assisted person.
The contract must specify clearly and conspicuously the services the agency
will provide, the basis on which fees will be charged for such services,
and the terms of payment. The
assisted person
must be given a copy of the fully executed and completed. The
debt relief agency
must include certain specified mandatory statements in any advertisement
of bankruptcy assistance
services or regarding the benefits of bankruptcy that is directed to the
general public whether through the general media, seminars, specific mailings,
telephonic or electronic messages, or otherwise.
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Sec.
230. GAO Study. Section
230 of the Act directs the Comptroller
General of the United States to study and prepare a report on the feasibility,
efficacy and cost of requiring trustees to supply certain specified information
about a debtor's
bankruptcy case to the Office of Child Support Enforcement for the purpose
of determining whether a
debtor has outstanding
child support obligations.
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Sec.
231. Protection of Personally
Identifiable Information. Section
231 of the Act clarifies that
it applies to personally
identifiable information and does not preempt applicable nonbankruptcy
law. In addition, the provision specifies that court approval must be preceded
by the appointment of a privacy ombudsman to effectuate the intent of this
provision.
Subsection
(a) amends
Bankruptcy Code
section 363(b)(1) to provide
that if a debtor,
in connection with offering a product or service, discloses to an individual
a policy prohibiting the
transfer of
personally identifiable
information to persons unaffiliated with the
debtor, and the
policy is in effect at the time of the bankruptcy filing, then the trustee
may not sell or lease
such information unless either of the following conditions is satisfied:
(1) the sale is consistent with such policy; or (2) the court,
after appointment of a consumer privacy ombudsman (pursuant to section
332 of the
Bankruptcy Code,
as amended ) and notice and hearing, the court
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approves the
sale or lease upon due consideration of the facts, circumstances, and conditions
of the sale or lease.
Section
231(b) amends
Bankruptcy Code
section 101 to add a definition
of "personally identifiable
information." The term applies to information provided by an individual
to the debtor in
connection with obtaining a product or service from the
debtor primarily
for personal, family, or household purposes. It
includes the individual's:
(1) first name or initial and last name (whether given at birth or
adoption or legally changed); (2) physical home address; (3)
electronic address, including an e-mail address; (4) home telephone
number; (5) Social Security account number; or (vi)
credit card account number. The term also
includes information
if it is identified in connection with the above items: (1) an individual's
birth date, birth or adoption certificate number, or place of birth; or
(2) any other information concerning an identified individual that,
if disclosed, will result in the physical or electronic contacting or identification
of that person.
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Sec.
232. Consumer Privacy Ombudsman.
Section 232 implements the preceding
provision of the Act with respect to the appointment and responsibilities
of a consumer privacy ombudsman. It provides that if a hearing is required
under section 363(b)(1)(B)
(as amended ), the court must order the United States trustee to appoint
a disinterested person
to serve as the consumer privacy ombudsman and to provide timely notice
of the hearing to such
person. It permits
the ombudsman to appear and be heard at such hearing. The ombudsman must
provide the court with information to assist its consideration of the facts,
circumstances and conditions of the proposed sale or lease of
personally identifiable
information. The information may include a presentation of the
debtor's privacy
policy, potential losses or gains of privacy to consumers if the sale or
lease is approved, potential costs or benefits to consumers if the sale
or lease is approved, and possible alternatives that would mitigate potential
privacy losses or costs to consumers. Section
232 prohibits the ombudsman from
disclosing any personally
identifiable information obtained in the case by such individual. In
addition, the provision amends Bankruptcy Code section
330(a)(1) to permit an ombudsman
to be compensated.
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Sec.
233. Prohibition on Disclosure
of Name of Minor Children. Section
233 of the Act adds a new provision
to the Bankruptcy Code (section
112) specifying that a
debtor may be required
to provide information regarding his or her minor child in connection with
the bankruptcy case, but such
debtor
may not be required
to disclose the child's name in the public records. It provides, however,
that the debtor
may be required to disclose this information in a nonpublic record maintained
by the court, which may be available for inspection by the United States
trustee, trustee or an auditor, if any. Section
233 prohibits the court, United
States trustee, trustee, or auditor from disclosing such minor child's name.
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Sec.
234. Protection of Personal Information.
Bankruptcy Code section 107,
with certain exceptions, provides that all papers filed in a bankruptcy
case are public records. Exceptions include trade secrets, confidential
research, and scandalous or defamatory matter. Section
234(a) adds a new provision
to section 107 that permits
a bankruptcy court to prohibit the disclosure of certain types of infor-
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So in the original. Should probably
read "(6)". •
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mation concerning
an individual to the extent the court finds that disclosure of such information
would create undue risk of identity theft or other unlawful injury to the
individual or the individual's property. The protected information
includes any means
of identification as defined in 18 U.S.C. Sec. 1028(d) that is contained
in a document filed in a bankruptcy case. The bankruptcy court must provide
access to information protected under this new provision to an
entity acting pursuant
to the police or regulatory power of a domestic
governmental unit
upon ex parte application demonstrating cause. The provision also provides
that the United States trustee, bankruptcy administrator, trustee, and any
auditor serving pursuant to section
586(f) of title
28 of the United States
Code shall have access to all information contained in a bankruptcy case
and that such persons shall not disclose information specifically protected
by the court. Section 234(b)
amends Bankruptcy Code section
342(c), which requires a
debtor to disclose
in any notice required by the
debtor to be given
to a creditor to
include the debtor's
taxpayer identification number. Section
234(b) requires the debtor
only to supply the last four digits of the taxpayer identification number.
If, however, the notice concerns an amendment that adds a
creditor to the
schedules of assets or liabilities, the
debtor must include
the full taxpayer identification number in the notice sent to such
creditor. The notice
filed with the court must only include the last four digits of such notice.
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TITLE III.
DISCOURAGING BANKRUPTCY ABUSE
Sec.
301. Technical Amendments.
Section 301 of the Act makes
a clarifying amendment to section
523(a)(17) of the
Bankruptcy
Code concerning the dischargeability of court fees incurred by prisoners.
Section 523(a)(17) was
added to the Bankruptcy Code by the Omnibus Consolidated Rescissions and
Appropriations Act of 1996
85
to except from discharge the filing fees and related costs and expenses
assessed by a court in a civil case or appeal. As the result of a drafting
error, however, this provision might be construed to apply to filing fees,
costs or expenses incurred by any
debtor, not solely
by those who are prisoners. The amendment eliminates this ambiguity and
makes other conforming changes to narrow its application in accordance with
its original intent.
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Sec.
302. Discouraging Bad Faith Repeat
Filings. Section 302
of the Act amends section 362(c)
of the Bankruptcy Code to terminate the automatic stay within 30 days in
a chapter 7,
11, or
13 case filed by or against
an individual if such individual was a
debtor in a previously
dismissed case pending within the preceding one-year period. The provision
does not apply to a case refiled under a chapter other than chapter
7 after dismissal of the prior
chapter 7 case pursuant to section
707(b) of the
Bankruptcy
Code. Upon motion of a party in interest, the court may continue the automatic
stay after notice and
a hearing completed prior to the expiration of the 30-day period if
such party demonstrates that the latter case was filed in good faith as
to the creditors
who are stayed by the filing.
For purposes
of this provision, a case is presumptively not filed in good faith as to
all creditors (but
such presumption may be rebutted by clear and convincing evidence) if:
(1) more than one
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85.
Pub. L. NO. 104-134, Sec. 804(b) (1996). •
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bankruptcy
case under chapter 7,
11 or
13 was previously filed by
the debtor within
the preceding one-year period; (2) the prior chapter
7,
11, or
13 case was dismissed within
the preceding year for the
debtor's failure
to (a) file or amend without substantial excuse a document required
under the Bankruptcy Code or court order, (b) provide adequate protection
ordered by the court, or (c) perform the terms of a confirmed plan;
or (3) there has been no substantial change in the
debtor's financial
or personal affairs since the dismissal of the prior case, or there is no
reason to conclude that the pending case will conclude either with a discharge
(if a chapter 7 case) or confirmation
(if a chapter 11 or
13 case). In addition, section
302 provides that a case is presumptively
deemed not to be filed in good faith as to any
creditor who obtained
relief from the automatic stay in the prior case or sought such relief in
the prior case and such action was pending at the time of the prior case's
dismissal. The presumption may be rebutted by clear and convincing evidence.
A similar presumption applies if two or more bankruptcy cases were pending
in the one-year preceding the filing of the pending case.
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Sec.
303. Curbing Abusive Filings.
Section 303 of the Act is intended
to reduce abusive filings. Subsection
(a) amends
Bankruptcy Code
section 362(d) to add a
new ground for relief from the automatic stay. Under this provision, cause
for relief from the automatic stay may be established for a
creditor whose
claim is secured
by an interest in real property, if the court finds that the filing of the
bankruptcy case was part of a scheme to delay, hinder and defraud
creditors that involved
either: (1) a
transfer of all or part of an ownership interest in real property without
such creditor's
consent or without court approval; or (2) multiple bankruptcy filings
affecting the real property. If recorded in compliance with applicable state
law governing notice of an interest in or a
statutory lien on
real property, an order entered under this provision is binding in any other
bankruptcy case for two years from the date of entry of such order. A
debtor in a subsequent
case may move for relief based upon changed circumstances or for good cause
shown after notice and
a hearing. Section 303(a)
further provides that any federal, state or local
governmental unit
that accepts a notice of interest or a
statutory lien in
real property, must accept a certified copy of an order entered under this
provision.
Section 303(b) amends
Bankruptcy
Code section 362(b) to
except from the automatic stay an act to enforce any
statutory lien against
or security interest
in real property within two years following the entry of an order entered
under section 362(d)(4).
A debtor, in a subsequent
case, may move for relief from such order based upon changed circumstances
or for other good cause shown
after notice and a hearing.
Section 303(b) also provides
that the automatic stay does not apply in a case where the
debtor: (1)
is ineligible to be a
debtor in a bankruptcy
case pursuant to section 109(g)
of the Bankruptcy Code; or (2) filed the bankruptcy case in violation
of an order issued in a prior bankruptcy case prohibiting the
debtor from being
a debtor in a subsequent
bankruptcy case.
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Sec.
304. Debtor Retention of Personal
Property Security. Section
304(1) of the Act amends section
521(a) of the
Bankruptcy
Code to provide that an individual who is a chapter
7
debtor
may not retain
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