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TITLE III — DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. TECHNICAL AMENDMENTS.
Section 523(a)(17) of title 11, United
States Code, is amended —
(1) by striking "by a court" and inserting "on a prisoner
by any court";
(2) by striking "section 1915(b) or (f)" and inserting "subsection
(b) or (f)(2) of section 1915"; and
(3) by inserting "(or a similar non-Federal law)" after "title
28" each place it appears.
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SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States
Code, is amended —
(1) in paragraph (1), by
striking "and" at the end;
(2) in paragraph (2), by
striking the period at the end and inserting a semicolon; and
(3) by adding at the end the following:
"(3) if a single or joint case is
filed by or against debtor who is an individual in a case under
chapter 7, 11, or 13, and if a single or joint case of the debtor
was pending within the preceding 1-year period but was dismissed,
other than a case refiled under a chapter other than chapter 7 after
dismissal under section 707(b)—
"(A) the stay under subsection
(a) with 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;
"(B) on the motion of a party
in interest for continuation of the automatic stay and upon
notice and a hearing, the court may extend the stay in particular
cases as to any or all creditors (subject to such conditions
or limitations as the court may then impose) after notice and
a hearing completed before the expiration of the 30-day period
only if the party in interest demonstrates that the filing of
the later case is in good faith as to the creditors to be stayed;
and
"(C) for purposes of subparagraph
(B), a case is presumptively filed not in good faith (but such
presumption may be rebutted by clear and convincing evidence
to the contrary)—
"(i) as to all creditors,
if—
"(I) more than 1
previous case under any of chapters 7, 11, and 13 in
which the individual was a debtor was pending within
the preceding 1-year period;
"(II) a previous
case under any of chapters 7, 11, and 13 in which the
individual was a debtor was dismissed within such 1-year
period, after the debtor failed to—
"(aa) file
or amend the petition or other documents as required
by this title or the court without substantial excuse
(but mere inadvertence or negligence shall not be
a substantial excuse unless the dismissal was caused
by the negligence of the debtor's attorney);
"(bb) provide
adequate protection as ordered by the court; or
"(cc) perform
the terms of a plan confirmed by the court; or
"(III) there has
not been a substantial change in the financial or personal
affairs of the debtor since the dismissal of the next
most previous case under chapter 7, 11, or 13 or any
other reason to conclude that the later case will be
concluded—
"(aa) if
a case under chapter 7, with a discharge; or
"(bb) if
a case under chapter 11 or 13, with a confirmed
plan that will be fully performed; and
"(ii) as to any creditor
that commenced an action under subsection (d) in a previous
case in which the individual was a debtor if, as of the
date of dismissal of such case, that action was still pending
or had been resolved by terminating, conditioning, or limiting
the stay as to actions of such creditor; and
"(4)(A)(i)
if a single or joint case is filed by or against a debtor who is
an individual under this title, and if 2 or more single or joint
cases of the debtor were pending within the previous year but were
dismissed, other than a case refiled under section 707(b), the stay
under subsection (a) shall not go into effect upon the filing of
the later case; and
"(B)
if, within 30 days after the filing of the later case, a party in
interest requests the court may order the stay to take effect in
the case as to any or all creditors (subject to such conditions
or limitations as the court may impose), after notice and a hearing,
only if the party in interest demonstrates that the filing of the
later case is in good faith as to the creditors to be stayed;
"(II)
a previous case under this title in which the individual
was a debtor was dismissed within the time period stated
in this paragraph after the debtor failed to file or amend
the petition or other documents as required by this title
or the court without substantial excuse (but mere inadvertence
or negligence shall not be substantial excuse unless the
dismissal was caused by the negligence of the debtor's attorney),
failed to provide adequate protection as ordered by the
court, or failed to perform the terms of a plan confirmed
by the court; or
"(III)
there has not been a substantial change in the financial
or personal affairs of the debtor since the dismissal of
the next most previous case under this title, or any other
reason to conclude that the later case will not be concluded,
if a case under chapter 7, with a discharge, and if a case
under chapter 11 or 13, with a confirmed plan that will
be fully performed; or
"(ii)
as to any creditor that commenced an action under subsection
(d) in a previous case in which the individual was a debtor
if, as of the date of dismissal of such case, such action was
still pending or had been resolved by terminating, conditioning,
or limiting the stay as to such action of such creditor.".
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SEC. 303. CURBING ABUSIVE FILINGS.
(a) IN GENERAL.—Section 362(d) of title
11, United States Code, is amended —
(1) in paragraph (2), by striking
"or" at the end;
(2) in paragraph (3), by striking
the period at the end and inserting "; or"; and
(3) by adding at the end the following:
"(4) with respect to a stay of an act against
real property under subsection (a), by a creditor whose claim is secured
by an interest in such real property, if the court finds that the filing
of the petition was part of a scheme to delay, hinder, and defraud creditors
that involved either—
"(A) transfer of all or part ownership
of, or other interest in, such real property without the consent of
the secured creditor or court approval; or
"(B) multiple bankruptcy filings affecting
such real property.
If recorded in compliance with applicable State laws governing notices of interests
or liens in real property, an order entered under paragraph (4) shall be binding
in any other case under this title purporting to affect such real property filed
not later than 2 years after the date of the entry of such order by the court,
except that a debtor in a subsequent case under this title may move for relief
from such order based upon changed circumstances or for good cause shown, after
notice and a hearing. Any Federal, State, or local governmental unit that accepts
notices of interests or liens in real property shall accept any certified copy
of an order described in this subsection for indexing and recording.".
(b) AUTOMATIC STAY.—Section 362(b) of
title 11, United States Code, as amended by section 224, is amended by inserting
after paragraph (19), the following:
"(20) under subsection (a), of any act
to enforce any lien against or security interest in real property following
entry of the order under subsection (d)(4) as to such real property in any
prior case under this title, for a period of 2 years after the date of the
entry of such an order, except that the debtor, in a subsequent case under
this title, may move for relief from such order based upon changed circumstances
or for other good cause shown, after notice and a hearing;
"(21) under subsection (a), of any act
to enforce any lien against or security interest in real property—
"(A) if the debtor is ineligible under
section 109(g) to be a debtor in a case under this title; or
"(B) if the case under this title
was filed in violation of a bankruptcy court order in a prior case under
this title prohibiting the debtor from being a debtor in another case
under this title;".
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SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended —
(1) in section 521(a), as so designated
by section 106—
(A) in paragraph (4), by striking
", and" at the end and inserting a semicolon;
(B) in paragraph (5), by striking
the period at the end and inserting "; and"; and
(C) by adding at the end the following:
"(6) in a case under chapter 7 of this
title in which the debtor is an individual, not retain possession of personal
property as to which a creditor has an allowed claim for the purchase price
secured in whole or in part by an interest in such personal property unless
the debtor, not later than 45 days after the first meeting of creditors
under section 341(a), either—
"(A) enters into an agreement with
the creditor pursuant to section 524(c) with respect to the claim secured
by such property; or
"(B) redeems such property from the
security interest pursuant to section 722.
If the debtor fails to so act within the 45-day period referred to in paragraph
(6), the stay under section 362(a) is terminated with respect to the personal
property of the estate or of the debtor which is affected, such property shall
no longer be property of the estate, and the creditor may take whatever action
as to such property as is permitted by applicable nonbankruptcy law, unless
the court determines on the motion of the trustee filed before the expiration
of such 45-day period, and after notice and a hearing, that such property is
of consequential value or benefit to the estate, orders appropriate adequate
protection of the creditor's interest, and orders the debtor to deliver any
collateral in the debtor's possession to the trustee."; and
(2) in section
722, by inserting "in
full at the time of redemption" before the period at the end.
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SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT COMPLETE INTENDED
SURRENDER OF CONSUMER DEBT COLLATERAL.
Title 11, United States Code, is amended —
(1) in section 362, as amended by section
106—
(A) in subsection (c), by striking
"(e), and (f)" and inserting "(e), (f), and (h)";
(B) by redesignating subsection (h) as subsection
(k) and transferring such subsection
so as to insert it after subsection (j) as added by section 106; and
(C) by inserting after subsection
(g) the following:
"(h)(1)
In a case in which the debtor is an individual, the stay provided by subsection
(a) is terminated with respect to personal property of the estate or of the
debtor securing in whole or in part a claim, or subject to an unexpired lease,
and such personal property shall no longer be property of the estate if the
debtor fails within the applicable time set by section 521(a)(2)—
"(A) to file
timely any statement of intention required under section 521(a)(2) with
respect to such personal property or to indicate in such statement that
the debtor will either surrender such personal property or retain it and,
if retaining such personal property, either redeem such personal property
pursuant to section 722, enter into an agreement of the kind specified in
section 524(c) applicable to the debt secured by such personal property,
or assume such unexpired lease pursuant to section 365(p) if the trustee
does not do so, as applicable; and
"(B) to take
timely the action specified in such statement, as it may be amended before
expiration of the period for taking action, unless such statement specifies
the debtor's intention to reaffirm such debt on the original contract terms
and the creditor refuses to agree to the reaffirmation on such terms.
"(2) Paragraph
(1) does not apply if the court determines, on the motion of the trustee filed
before the expiration of the applicable time set by section 521(a)(2), after
notice and a hearing, that such personal property is of consequential value
or benefit to the estate, and orders appropriate adequate protection of the
creditor's interest, and orders the debtor to deliver any collateral in the
debtor's possession to the trustee. If the court does not so determine, the
stay provided by subsection (a) shall terminate upon the conclusion of the hearing
on the motion."; and
(2) in section 521, as amended by sections
106 and 225—
(A) in subsection (a)(2) by
striking "consumer";
(i) by striking "forty-five days after the filing of a notice
of intent under this section" and inserting "30 days after the first
date set for the meeting of creditors under section 341(a)"; and
(ii) by striking "forty-five day" and inserting "30-day";
(C) in subsection (a)(2)(C)
by inserting ", except as provided in section 362(h)" before the semicolon;
and
(D) by adding at the end the following:
"(d) If the debtor fails timely to take the
action specified in subsection (a)(6) of this section, or in paragraphs (1)
and (2) of section 362(h), with respect to property which a lessor or bailor
owns and has leased, rented, or bailed to the debtor or as to which a creditor
holds a security interest not otherwise voidable under section 522(f), 544,
545, 547, 548, or 549, nothing in this title shall prevent or limit the operation
of a provision in the underlying lease or agreement that has the effect of placing
the debtor in default under such lease or agreement by reason of the occurrence,
pendency, or existence of a proceeding under this title or the insolvency of
the debtor. Nothing in this subsection shall be deemed to justify limiting such
a provision in any other circumstance.".
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SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
(a) IN GENERAL.—Section 1325(a)(5)(B)(i)
of title 11, United States Code, is amended to read as follows:
"(i) the plan provides that—
"(I) the holder of such claim
retain the lien securing such claim until the earlier of—
"(aa) the payment of the
underlying debt determined under nonbankruptcy law; or
"(bb) discharge under
section 1328; and
"(II) if the case under this
chapter is dismissed or converted without completion of the plan,
such lien shall also be retained by such holder to the extent recognized
by applicable nonbankruptcy law; and".
(b) RESTORING THE FOUNDATION FOR SECURED CREDIT.—Section
1325(a) of title 11, United States Code,
is amended by adding at the end the following:
"For purposes of paragraph (5), section 506 shall not apply to a claim described
in that paragraph if the creditor has a purchase money security interest securing
the debt that is the subject of the claim, the debt was incurred within the
910-day preceding the date of the filing of the petition, and the collateral
for that debt consists of a motor vehicle (as defined in section 30102 of title
49) acquired for the personal use of the debtor, or if collateral for that debt
consists of any other thing of value, if the debt was incurred during the 1-year
period preceding that filing.".
(c) DEFINITIONS.—Section 101 of title 11,
United States Code, is amended —
(1) by inserting after paragraph (13)
the following:
"(13A) 'debtor's principal residence'—
"(A) means a residential structure,
including incidental property, without regard to whether that structure
is attached to real property; and
"(B) includes an individual condominium
or cooperative unit, a mobile or manufactured home, or trailer;"; and
(2) by inserting after paragraph (27),
the following:
"(27A) '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 property is located;
"(B) all easements, rights, appurtenances,
fixtures, rents, royalties, mineral rights, oil or gas rights or profits,
water rights, escrow funds, or insurance proceeds; and
"(C) all replacements or addition s;".
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SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.
Section 522(b)(3) of title 11, United States
Code, as so designated by section 106, is amended —
(A) by striking "180 days" and inserting "730 days"; and
(B) by striking ", or for a longer portion of such 180-day period
than in any other place" and inserting "or if the debtor's domicile
has not been located at a single State for such 730-day period, the
place in which the debtor's domicile was located for 180 days immediately
preceding the 730-day period or for a longer portion of such 180-day
period than in any other place"; and
(2) by adding at the end the following:
"If the effect of the domiciliary requirement under subparagraph (A) is to render
the debtor ineligible for any exemption, the debtor may elect to exempt property
that is specified under subsection (d).".
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SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.
Section 522 of title 11, United States Code, as
amended by section 224, is amended —
(1) in subsection (b)(3)(A), as
so designated by this Act, by inserting "subject to subsections (o) and
(p)," before "any property"; and
(2) by adding at the end the following:
"(o) For purposes of subsection (b)(3)(A), and
notwithstanding subsection (a), the value of an interest in—
"(1) real or personal property that the
debtor or a dependent of the debtor uses as a residence;
"(2) a cooperative that owns property that
the debtor or a dependent of the debtor uses as a residence;
"(3) a burial plot for the debtor or a dependent
of the debtor; or
"(4) real or personal property that the
debtor or a dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is attributable to any portion
of any property that the debtor disposed of in the 10-year period ending on
the date of the filing of the petition with the intent to hinder, delay, or
defraud a creditor and that the debtor could not exempt, or that portion that
the debtor could not exempt, under subsection (b), if on such date the debtor
had held the property so disposed of.".
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SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.
(a) STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.—Section
348(f)(1) of title 11, United States Code, is
amended —
(1) in subparagraph (A), by striking
"and" at the end;
(A) by striking "in the converted case, with allowed secured
claims" and inserting "only in a case converted to a case under chapter
11 or 12, but not in a case converted to a case under chapter 7, with
allowed secured claims in cases under chapters 11 and 12"; and
(B) by striking the period and inserting "; and"; and
(3) by adding at the end the following:
"(C) with respect to cases converted from
chapter 13—
"(i) 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 such claim determined under
applicable nonbankruptcy law has been paid in full as of the date of
conversion, notwithstanding any valuation or determination of the amount
of an allowed secured claim made for the purposes of the case under
chapter 13; and
"(ii) unless a prebankruptcy default
has been fully cured under the plan at the time of conversion, in any
proceeding under this title or otherwise, the default shall have the
effect given under applicable nonbankruptcy law.".
(b) GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL PROPERTY BY ASSUMPTION.—Section
365 of title 11, United States Code, is amended
by adding at the end the following:
"(p)(1)
If a lease of personal property is rejected or not timely assumed by the trustee
under subsection (d), the leased property is no longer property of the estate
and the stay under section 362(a) is automatically terminated.
"(2)(A)
If the debtor in a case under chapter 7 is an individual, the debtor may notify
the creditor in writing that the debtor desires to assume the lease. Upon being
so notified, the creditor may, at its option, notify the debtor that it is willing
to have the lease assumed by the debtor and may condition such assumption on
cure of any outstanding default on terms set by the contract.
"(B) If, not later
than 30 days after notice is provided under subparagraph (A), the debtor notifies
the lessor in writing that the lease is assumed, the liability under the lease
will be assumed by the debtor and not by the estate.
"(C) The stay
under section 362 and the injunction under section 524(a)(2) shall not be violated
by notification of the debtor and negotiation of cure under this subsection.
"(3) In a case
under chapter 11 in which the debtor is an individual and in a case under chapter
13, if the debtor is the lessee with respect to personal property and the lease
is not assumed in the plan confirmed by the court, the lease is deemed rejected
as of the conclusion of the hearing on confirmation. If the lease is rejected,
the stay under section 362 and any stay under section 1301 is automatically
terminated with respect to the property subject to the lease.".
(c) ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED CREDITORS.—
(1) CONFIRMATION OF PLAN.—Section 1325(a)(5)(B) of title 11, United States Code, as amended by section
306, is amended —
(A) in clause (i), by striking
"and" at the end;
(B) in clause (ii), by striking
"or" at the end and inserting "and"; and
(C) by adding at the end the following:
"(I) property to be distributed
pursuant to this subsection is in the form of periodic payments,
such payments shall be in equal monthly amounts; and
"(II) the holder of the claim
is secured by personal property, the amount of such payments shall
not be less than an amount sufficient to provide to the holder of
such claim adequate protection during the period of the plan; or".
(2) PAYMENTS.—Section 1326(a) of
title 11, United States Code, is amended to read as follows:
"(a)(1)
Unless the court orders otherwise, the debtor shall commence making payments
not later than 30 days after the date of the filing of the plan or the order
for relief, whichever is earlier, in the amount—
"(B) scheduled
in a lease of personal property directly to the lessor for that portion
of the obligation that becomes due after the order for relief, reducing
the payments under subparagraph (A) by the amount so paid and providing
the trustee with evidence of such payment, including the amount and date
of payment; and
"(C) that
provides adequate protection directly to a creditor holding an allowed claim
secured by personal property to the extent the claim is attributable to
the purchase of such property by the debtor for that portion of the obligation
that becomes due after the order for relief, reducing the payments under
subparagraph (A) by the amount so paid and providing the trustee with evidence
of such payment, including the amount and date of payment.
"(2) A payment
made under paragraph (1)(A) shall be retained by the trustee until confirmation
or denial of confirmation. If a plan is confirmed, the trustee shall distribute
any such payment in accordance with the plan as soon as is practicable. If a
plan is not confirmed, the trustee shall return any such payments not previously
paid and not yet due and owing to creditors pursuant to paragraph (3) to the
debtor, after deducting any unpaid claim allowed under section 503(b).
"(3) Subject to
section 363, the court may, upon notice and a hearing, modify, increase, or
reduce the payments required under this subsection pending confirmation of a
plan.
"(4) Not later
than 60 days after the date of filing of a case under this chapter, a debtor
retaining possession of personal property subject to a lease or securing a claim
attributable in whole or in part to the purchase price of such property shall
provide the lessor or secured creditor reasonable evidence of the maintenance
of any required insurance coverage with respect to the use or ownership of such
property and continue to do so for so long as the debtor retains possession
of such property.".
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SEC. 310. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States
Code, is amended to read as follows:
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SEC. 311. AUTOMATIC STAY.
(a) IN GENERAL.—Section 362(b) of title
11, United States Code, as amended by sections 224 and 303, is amended by inserting after paragraph
(21), the following:
"(22) subject to subsection (l), under
subsection (a)(3), of the continuation of any eviction, unlawful detainer
action, or similar proceeding by a lessor against a debtor involving residential
property in which the debtor resides as a tenant under a lease or rental
agreement and with respect to which the lessor has obtained before the date
of the filing of the bankruptcy petition, a judgment for possession of such
property against the debtor;
"(23) subject to subsection (m), under
subsection (a)(3), of an eviction action that seeks possession of the residential
property in which the debtor resides as a tenant under a lease or rental
agreement based on endangerment of such property or the illegal use of controlled
substances on such property, but only if the lessor files with the court,
and serves upon the debtor, a certification under penalty of perjury that
such an eviction action has been filed, or that the debtor, during the 30-day
period preceding the date of the filing of the certification, has endangered
property or illegally used or allowed to be used a controlled substance
on the property;
"(24) under subsection (a), of any transfer
that is not avoidable under section 544 and that is not avoidable under
section 549;".
(b) LIMITATIONS.—Section 362 of title 11,
United States Code, as amended by sections 106
and 305, is amended by adding at the end the following:
"(l)(1)
Except as otherwise provided in this subsection, subsection (b)(22) shall apply
on the date that is 30 days after the date on which the bankruptcy petition
is filed, if the debtor files with the petition and serves upon the lessor a
certification under penalty of perjury that—
"(A) under
nonbankruptcy law applicable in the jurisdiction, there are circumstances
under which the debtor would be permitted to cure the entire monetary default
that gave rise to the judgment for possession, after that judgment for possession
was entered; and
"(2) If, within
the 30-day period after the filing of the bankruptcy petition, the debtor (or
an adult dependent of the debtor) complies with paragraph (1) and files with
the court and serves upon the lessor a further certification under penalty of
perjury that the debtor (or an adult dependent of the debtor) has cured, under
nonbankrupcty law applicable in the jurisdiction, the entire monetary default
that gave rise to the judgment under which possession is sought by the lessor,
subsection (b)(22) shall not apply, unless ordered to apply by the court under
paragraph (3).
"(3)(A)
If the lessor files an objection to any certification filed by the debtor under
paragraph (1) or (2), and serves such objection upon the debtor, the court shall
hold a hearing within 10 days after the filing and service of such objection
to determine if the certification filed by the debtor under paragraph (1) or
(2) is true.
"(4) If a debtor,
in accordance with paragraph (5), indicates on the petition that there was a
judgment for possession of the residential rental property in which the debtor
resides and does not file a certification under paragraph (1) or (2)—
"(5)(A)
Where a judgment for possession of residential property in which the debtor
resides as a tenant under a lease or rental agreement has been obtained by the
lessor, the debtor shall so indicate on the bankruptcy petition and shall provide
the name and address of the lessor that obtained that prepetition judgment
on the petition and on any certification filed under this subsection.
"(B) The form
of certification filed with the petition, as specified in this subsection, shall
provide for the debtor to certify, and the debtor shall certify—
"(ii) whether
the debtor is claiming under paragraph (1) that under nonbankruptcy law
applicable in the jurisdiction, there are circumstances under which the
debtor would be permitted to cure the entire monetary default that gave
rise to the judgment for possession, after that judgment of possession was
entered, and has made the appropriate deposit with the court.
"(C) The standard
forms (electronic and otherwise) used in a bankruptcy proceeding shall be amended
to reflect the requirements of this subsection.
"(D) The clerk
of the court shall arrange for the prompt transmittal of the rent deposited
in accordance with paragraph (1)(B) to the lessor.
"(m)(1)
Except as otherwise provided in this subsection, subsection (b)(23) shall apply
on the date that is 15 days after the date on which the lessor files and serves
a certification described in subsection (b)(23).
"(2)(A)
If the debtor files with the court an objection to the truth or legal sufficiency
of the certification described in subsection (b)(23) and serves such objection
upon the lessor, subsection (b)(23) shall not apply, unless ordered to apply
by the court under this subsection.
"(B) If the debtor
files and serves the objection under subparagraph (A), the court shall hold
a hearing within 10 days after the filing and service of such objection to determine
if the situation giving rise to the lessor's certification under paragraph (1)
existed or has been remedied.
"(C) If the debtor
can demonstrate to the satisfaction of the court that the situation giving rise
to the lessor's certification under paragraph (1) did not exist or has been
remedied, the stay provided under subsection (a)(3) shall remain in effect until
the termination of the stay under this section.
"(D) If the debtor
cannot demonstrate to the satisfaction of the court that the situation giving
rise to the lessor's certification under paragraph (1) did not exist or has
been remedied—
"(3) If the debtor
fails to file, within 15 days, an objection under paragraph (2)(A)—
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SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended —
(1) in section 727(a)(8), by striking
"six" and inserting "8"; and
(2) in section 1328, by inserting
after subsection (e) the following:
"(f) Notwithstanding subsections (a) and (b),
the court shall not grant a discharge of all debts provided for in the plan
or disallowed under section 502, if the debtor has received a discharge—
"(1) in a case filed under chapter 7, 11,
or 12 of this title during the 4-year period preceding the date of the order
for relief under this chapter, or
"(2) in a case filed under chapter 13 of
this title during the 2-year period preceding the date of such order.".
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SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
(a) DEFINITION.—Section 522(f) of title
11, United States Code, is amended by adding at the end the following:
"(4)(A)
Subject to subparagraph (B), for purposes of paragraph (1)(B), the term 'household
goods' means—
"(B) The term 'household goods' does not include—
"(i) works of art (unless by or of the
debtor, or any relative of the debtor);
"(ii) electronic entertainment equipment
with a fair market value of more than $500 in the aggregate (except 1 television,
1 radio, and 1 VCR);
"(iii) items acquired as antiques with
a fair market value of more than $500 in the aggregate;
"(iv) jewelry with a fair market value
of more than $500 in the aggregate (except wedding rings); and
"(v) a computer (except as otherwise provided
for in this section), motor vehicle (including a tractor or lawn tractor),
boat, or a motorized recreational device, conveyance, vehicle, watercraft,
or aircraft.".
(b) STUDY.—Not later than 2 years after the date of enactment of this
Act, the Director of the Executive Office for United States Trustees shall submit
a report to the Committee on the Judiciary of the Senate and the Committee on
the Judiciary of the House of Representatives containing its findings regarding
utilization of the definition of household goods, as defined in section 522(f)(4)
of title 11, United States Code, as added by subsection (a), with respect to
the avoidance of nonpossessory, nonpurchase money security interests in household
goods under section 522(f)(1)(B) of title 11, United States Code, and the impact
such section 522(f)(4) has had on debtors and on the bankruptcy courts. Such
report may include recommendations for amendments to such section 522(f)(4)
consistent with the Director's findings.
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SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.
(a) IN GENERAL.—Section 523(a) of title
11, United States Code, is amended by inserting after paragraph
(14) the following:
"(14A) incurred to pay a tax to a governmental
unit, other than the United States, that would be nondischargeable under
paragraph (1);".
(b) DISCHARGE UNDER CHAPTER 13.—Section 1328(a)
of title 11, United States Code, is amended by striking paragraphs (1) through
(3) and inserting the following:
"(1) provided for under section 1322(b)(5);
"(2) of the kind specified in paragraph
(2), (3), (4), (5), (8), or (9) of section 523(a);
"(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 personal injury to an individual or the
death of an individual.".
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SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13 CASES.
(a) NOTICE.—Section
342 of title 11, United
States Code, as amended by section 102, is amended —
(A) by inserting "(1)" after "(c)";
(B) by striking ", but the failure of such notice to contain
such information shall not invalidate the legal effect of such notice";
and
(C) by adding at the end the following:
"(2)(A)
If, within the 90 days before the commencement of a voluntary case, a creditor
supplies the debtor in at least 2 communications sent to the debtor with the
current account number of the debtor and the address at which such creditor
requests to receive correspondence, then any notice required by this title to
be sent by the debtor to such creditor shall be sent to such address and shall
include such account number.
"(B) If a creditor
would be in violation of applicable nonbankruptcy law by sending any such communication
within such 90-day period and if such creditor supplies the debtor in the last
2 communications with the current account number of the debtor and the address
at which such creditor requests to receive correspondence, then any notice required
by this title to be sent by the debtor to such creditor shall be sent to such
address and shall include such account number."; and
(2) by adding at the end the following:
"(e)(1)
In a case under chapter 7 or 13 of this title of a debtor who is an individual,
a creditor at any time may both file with the court and serve on the debtor
a notice of address to be used to provide notice in such case to such creditor.
"(2) Any notice
in such case required to be provided to such creditor by the debtor or the court
later than 5 days after the court and the debtor receive such creditor's notice
of address, shall be provided to such address.
"(f)(1)
An entity may file with any bankruptcy court a notice of address to be used
by all the bankruptcy courts or by particular bankruptcy courts, as so specified
by such entity at the time such notice is filed, to provide notice to such entity
in all cases under chapters 7 and 13 pending in the courts with respect to which
such notice is filed, in which such entity is a creditor.
"(2) In any case
filed under chapter 7 or 13, any notice required to be provided by a court with
respect to which a notice is filed under paragraph (1), to such entity later
than 30 days after the filing of such notice under paragraph (1) shall be provided
to such address unless with respect to a particular case a different address
is specified in a notice filed and served in accordance with subsection (e).
"(g)(1)
Notice provided to a creditor by the debtor or the court other than in accordance
with this section (excluding this subsection) shall not be effective notice
until such notice is brought to the attention of such creditor. If such creditor
designates a person or an organizational subdivision of such creditor to be
responsible for receiving notices under this title and establishes reasonable
procedures so that such notices receivable by such creditor are to be delivered
to such person or such subdivision, then a notice provided to such creditor
other than in accordance with this section (excluding this subsection) shall
not be considered to have been brought to the attention of such creditor until
such notice is received by such person or such subdivision.
"(2) A monetary
penalty may not be imposed on a creditor for a violation of a stay in effect
under section 362(a) (including a monetary penalty imposed under section 362(k))
or for failure to comply with section 542 or 543 unless the conduct that is
the basis of such violation or of such failure occurs after such creditor receives
notice effective under this section of the order for relief.".
(b) DEBTOR'S DUTIES.—Section 521 of title
11, United States Code, as amended by sections 106, 225, and 305,
is amended —
(1) in subsection (a), as so designated
by section 106, by amending paragraph
(1) to read as follows:
"(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
financial affairs and, if section 342(b) applies, a certificate—
"(I) of an attorney whose
name is indicated on the petition as the attorney for the debtor,
or a bankruptcy petition preparer signing the petition under
section 110(b)(1), indicating that such attorney or the bankruptcy
petition preparer delivered to the debtor the notice required
by section 342(b); or
"(II) if no attorney is
so indicated, and no bankruptcy petition preparer signed the
petition, of the debtor that such notice was received and read
by the debtor;
"(iv) copies of all payment
advices or other evidence of payment received within 60 days before
the date of the filing of the petition, by the debtor from any employer
of the debtor;
"(v) a statement of the amount
of monthly net income, itemized to show how the amount is calculated;
and
"(vi) a statement disclosing
any reasonably anticipated increase in income or expenditures over
the 12-month period following the date of the filing of the petition;";
and
(2) by adding at the end the following:
"(e)(1)
If the debtor in a case under chapter 7 or 13 is an individual and if a creditor
files with the court at any time a request to receive a copy of the petition,
schedules, and statement of financial affairs filed by the debtor, then the
court shall make such petition, such schedules, and such statement available
to such creditor.
"(i) not
later than 7 days before the date first set for the first meeting of creditors,
to the trustee a copy of the Federal income tax return required under applicable
law (or at the election of the debtor, a transcript of such return) for
the most recent tax year ending immediately before the commencement of the
case and for which a Federal income tax return was filed; and
"(B) If the
debtor fails to comply with clause (i) or (ii) of subparagraph (A), the court
shall dismiss the case unless the debtor demonstrates that the failure to so
comply is due to circumstances beyond the control of the debtor.
"(C) If a creditor
requests a copy of such tax return or such transcript and if the debtor fails
to provide a copy of such tax return or such transcript to such creditor at
the time the debtor provides such tax return or such transcript to the trustee,
then the court shall dismiss the case unless the debtor demonstrates that the
failure to provide a copy of such tax return or such transcript is due to circumstances
beyond the control of the debtor.
"(3) If a creditor
in a case under chapter 13 files with the court at any time a request to receive
a copy of the plan filed by the debtor, then the court shall make available
to such creditor a copy of the plan—
"(f) At the request of the court, the United
States trustee, or any party in interest in a case under chapter 7, 11, or 13,
a debtor who is an individual shall file with the court—
"(1) at the same time filed with the taxing
authority, a copy of each Federal income tax return required under applicable
law (or at the election of the debtor, a transcript of such tax return)
with respect to each tax year of the debtor ending while the case is pending
under such chapter;
"(2) at the same time filed with the taxing
authority, each Federal income tax return required under applicable law
(or at the election of the debtor, a transcript of such tax return) that
had not been filed with such authority as of the date of the commencement
of the case and that was subsequently filed for any tax year of the debtor
ending in the 3-year period ending on the date of the commencement of the
case;
"(3) a copy of each amendment to any Federal
income tax return or transcript filed with the court under paragraph (1)
or (2); and
"(4) in a case under chapter 13—
"(A) on the date that is either 90
days after the end of such tax year or 1 year after the date of the
commencement of the case, whichever is later, if a plan is not confirmed
before such later date; and
"(B) annually after the plan is confirmed
and until the case is closed, not later than the date that is 45 days
before the anniversary of the confirmation of the plan;
a statement, under penalty of perjury, of the income and expenditures of
the debtor during the tax year of the debtor most recently concluded before
such statement is filed under this paragraph, and of the monthly income
of the debtor, that shows how income, expenditures, and monthly income are
calculated.
"(2) The tax
returns, amendments, and statement of income and expenditures described in subsections
(e)(2)(A) and (f) shall be available to the United States trustee (or the bankruptcy
administrator, if any), the trustee, and any party in interest for inspection
and copying, subject to the requirements of section 315(c) of the
Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005.
"(h) If requested by the United States trustee
or by the trustee, the debtor shall provide—
"(1) a document that establishes the identity
of the debtor, including a driver's license, passport, or other document
that contains a photograph of the debtor; or
"(2) such other personal identifying information
relating to the debtor that establishes the identity of the debtor.".
(c)(1) Not later than 180 days after the date of the enactment of this
Act, the Director of the Administrative Office of the United States Courts shall
establish procedures for safeguarding the confidentiality 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 required to be provided under this
section.
(3) Not later than 540 days after the date of enactment of this Act,
the Director of the Administrative Office of the United States Courts shall
prepare and submit to the President pro tempore of the Senate and the Speaker
of the House of Representatives a report that—
(A) assesses the effectiveness of the procedures established under
paragraph (1); and
(B) if appropriate, includes proposed legislation to—
(i) further protect the confidentiality of tax information; and
(ii) provide penalties for the improper use by any person of
the tax information required to be provided under this section.
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SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE REQUIRED
INFORMATION.
Section 521 of title 11, United States Code, as
amended by sections 106,
225, 305, and
315, is amended by adding at the end the following:
"(i)(1)
Subject to paragraphs (2) and (4) and notwithstanding section 707(a), if an
individual debtor in a voluntary case under chapter 7 or 13 fails to file all
of the information required under subsection (a)(1) within 45 days after the
date of the filing of the petition, the case shall be automatically dismissed
effective on the 46th day after the date of the filing of the petition.
"(2) Subject to
paragraph (4) and with respect to a case described in paragraph (1), any party
in interest may request the court to enter an order dismissing the case. If
requested, the court shall enter an order of dismissal not later than 5 days
after such request.
"(3) Subject
to paragraph (4) and upon request of the debtor made within 45 days after the
date of the filing of the petition described in paragraph (1), the court may
allow the debtor an additional period of not to exceed 45 days to file the information
required under subsection (a)(1) if the court finds justification for extending
the period for the filing.
"(4) Notwithstanding
any other provision of this subsection, on the motion of the trustee filed before
the expiration of the applicable period of time specified in paragraph (1),
(2), or (3), and after notice and a hearing, the court may decline to dismiss
the case if the court finds that the debtor attempted in good faith to file
all the information required by subsection (a)(1)(B)(iv) and that the best interests
of creditors would be served by administration of the case.".
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SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE PLAN.
Section 1324 of title 11, United States Code,
is amended —
(1) by striking "After" and inserting the following:
"(a) Except as provided in subsection (b) and
after"; and
(2) by adding at the end the following:
"(b) The hearing on confirmation of the plan
may be held not earlier than 20 days and not later than 45 days after the date
of the meeting of creditors under section 341(a), unless the court determines
that it would be in the best interests of the creditors and the estate to hold
such hearing at an earlier date and there is no objection to such earlier date.".
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SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN CERTAIN CASES.
Title 11, United States Code, is amended —
(1) by amending section 1322(d)
to read as follows:
"(d)(1)
If the current monthly income of the debtor and the debtor's spouse combined,
when multiplied by 12, is not less than—
"(B) in the
case of a debtor in a household of 2, 3, or 4 individuals, the highest median
family income of the applicable State for a family of the same number or
fewer individuals; or
"(C) in the
case of a debtor in a household exceeding 4 individuals, the highest median
family income of the applicable State for a family of 4 or fewer individuals,
plus $525 per month for each individual in excess of 4,
"(2) If the current
monthly income of the debtor and the debtor's spouse combined, when multiplied
by 12, is less than—
"(B) in the
case of a debtor in a household of 2, 3, or 4 individuals, the highest median
family income of the applicable State for a family of the same number or
fewer individuals; or
"(C) in the
case of a debtor in a household exceeding 4 individuals, the highest median
family income of the applicable State for a family of 4 or fewer individuals,
plus $525 per month for each individual in excess of 4,
the plan may not provide for payments over a period
that is longer than 3 years, unless the court, for cause, approves a longer
period, but the court may not approve a period that is longer than 5 years.";
(2) in section 1325(b)(1)(B), by
striking "three-year period" and inserting "applicable commitment period";
and
(3) in section 1325(b), as amended
by section 102, by adding at the end the
following:
"(4) For purposes of this subsection, the 'applicable
commitment period'—
"(A) subject to subparagraph (B), shall
be—
"(ii) not less than 5 years, if the
current monthly income of the debtor and the debtor's spouse combined,
when multiplied by 12, is not less than—
"(I) in the case of a debtor
in a household of 1 person, the median family income of the applicable
State for 1 earner;
"(II) in the case of a debtor
in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or
fewer individuals; or
"(III) in the case of a debtor
in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals,
plus $525 per month for each individual in excess of 4; and
"(B) may be less than 3 or 5 years, whichever
is applicable under subparagraph (A), but only if the plan provides for
payment in full of all allowed unsecured claims over a shorter period.";
and
(4) in section 1329(c), by striking "three years" and inserting "the
applicable commitment period under section 1325(b)(1)(B)".
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SEC. 319. SENSE OF CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE FEDERAL
RULES OF BANKRUPTCY PROCEDURE.
It is the sense of Congress that rule
9011 of
the Federal Rules of Bankruptcy Procedure (11 U.S.C. App.) should be modified
to include a requirement that all documents (including schedules), signed and
unsigned, submitted to the court or to a trustee by debtors who represent themselves
and debtors who are represented by attorneys be submitted only after the debtors
or the debtors' attorneys have made reasonable inquiry to verify that the information
contained in such documents is—
(1) well grounded in fact; and
(2) warranted by existing law or a good faith argument for the extension,
modification, or reversal of existing law.
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SEC. 320. 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 a case
under chapter 7, 11, or 13 in which the debtor is an individual, the stay under
subsection (a) shall terminate on the date that is 60 days after a request is
made by a party in interest under subsection (d), unless—
"(A) a final decision is rendered by the
court during the 60-day period beginning on the date of the request; or
"(B) such 60-day period is extended—
"(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, as described
in findings made by the court.".
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SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.
(a) PROPERTY OF THE ESTATE.—
(1) IN GENERAL.—Subchapter I of chapter 11 of title 11, United States
Code, is amended by adding at the end the following:
"Sec. 1115. Property of the estate
"(a) In a case in which the debtor is an individual,
property of the estate includes, in addition to the property specified in section
541—
"(1) all property of the kind specified
in section 541 that the debtor acquires after the commencement of the case
but before the case is closed, dismissed, or converted to a case under chapter
7, 12, or 13, whichever occurs first; and
"(2) earnings from services performed by
the debtor after the commencement of the case but before the case is closed,
dismissed, or converted to a case under chapter 7, 12, or 13, whichever
occurs first.
"(b) Except as provided in section 1104 or a
confirmed plan or order confirming a plan, the debtor shall remain in possession
of all property of the estate.".
(2) CLERICAL AMENDMENT.—The table of sections for subchapter I of
chapter 11 of title 11, United States Code, is amended by adding at the
end the following:
"1115. Property of the estate.".
(b) CONTENTS OF PLAN.—Section 1123(a)
of title 11, United States Code, is amended —
(1) in paragraph (6), by striking
"and" at the end;
(2) in paragraph (7), by striking
the period and inserting "; and"; and
(3) by adding at the end the following:
"(8) in a case in which the debtor is an
individual, provide for the payment to creditors under the plan of all or
such portion of earnings from personal services performed by the debtor
after the commencement of the case or other future income of the debtor
as is necessary for the execution of the plan.".
(c) CONFIRMATION OF PLAN.—
(1) REQUIREMENTS RELATING TO VALUE OF PROPERTY.—Section
1129(a) of title 11, United States Code,
as amended by section 213, is amended
by adding at the end the following:
"(15) In a case in which the debtor is
an individual and in which the holder of an allowed unsecured claim objects
to the confirmation of the plan—
"(A) the value, as of the effective
date of the plan, of the property to be distributed under the plan on
account of such claim is not less than the amount of such claim; or
"(B) the value of the property to
be distributed under the plan is not less than the projected disposable
income of the debtor (as defined in section 1325(b)(2)) to be received
during the 5-year period beginning on the date that the first payment
is due under the plan, or during the period for which the plan provides
payments, whichever is longer.".
(2) REQUIREMENT RELATING TO INTERESTS IN PROPERTY.—Section
1129(b)(2)(B)(ii) of title 11, United
States Code, is amended by inserting before the period at the end the following:
", except that in a case in which the debtor is an individual, the debtor
may retain property included in the estate under section 1115, subject to
the requirements of subsection (a)(14) of this section".
(d) EFFECT OF CONFIRMATION.—Section 1141(d)
of title 11, United States Code, is amended —
(1) in paragraph (2), by striking
"The confirmation of a plan does not discharge an individual debtor" and
inserting "A discharge under this chapter does not discharge a debtor who
is an individual"; and
(2) by adding at the end the following:
"(5) In a case in which the debtor is an individual—
"(A) unless after notice and a hearing
the court orders otherwise for cause, confirmation of the plan does not
discharge any debt provided for in the plan until the court grants a discharge
on completion of all payments under the plan;
"(B) at any time after the confirmation
of the plan, and after notice and a hearing, the court may grant a discharge
to the debtor who has not completed payments under the plan if—
"(i) the value, as of the effective
date of the plan, of property actually distributed under the plan on
account of each allowed unsecured claim is not less than the amount
that would have been paid on such claim if the estate of the debtor
had been liquidated under chapter 7 on such date; and
"(ii) modification of the plan under
section 1127 is not practicable; and".
(e) MODIFICATION OF PLAN.—Section 1127
of title 11, United States Code, is amended by adding at the end the following:
"(e) If the debtor is an individual, the plan
may be modified at any time after confirmation of the plan but before the completion
of payments under the plan, whether or not the plan has been substantially consummated,
upon request of the debtor, the trustee, the United States trustee, or the holder
of an allowed unsecured claim, to—
"(1) increase or reduce the amount of payments
on claims of a particular class provided for by the plan;
"(2) extend or reduce the time period for
such payments; or
"(3) alter the amount of the distribution
to a creditor whose claim is provided for by the plan to the extent necessary
to take account of any payment of such claim made other than under the plan.
"(f)(1)
Sections 1121 through 1128 and the requirements of section 1129 apply to any
modification under subsection (a).
"(2) The plan,
as modified, shall become the plan only after there has been disclosure under
section 1125 as the court may direct, notice and a hearing, and such modification
is approved.".
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SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION.
(a) EXEMPTIONS.—Section 522 of title 11,
United States Code, as amended by sections 224 and 308, is amended by adding
at the end the following:
"(p)(1)
Except as provided in paragraph (2) of this subsection and sections 544 and
548, as a result of electing under subsection (b)(3)(A) to exempt property under
State or local law, a debtor may not exempt any amount of interest that was
acquired by the debtor during the 1215-day period preceding the date of the
filing of the petition that exceeds in the aggregate $125,000 in value in—
"(2)(A)
The limitation under paragraph (1) shall not apply to an exemption claimed under
subsection (b)(3)(A) by a family farmer for the principal residence of such
farmer.
"(B) For purposes
of paragraph (1), any amount of such interest does not include any interest
transferred from a debtor's previous principal residence (which was acquired
prior to the beginning of such 1215-day period) into the debtor's current principal
residence, if the debtor's previous and current residences are located in the
same State.
"(q)(1)
As a result of electing under subsection (b)(3)(A) to exempt property under
State or local law, a debtor may not exempt any amount of an interest in property
described in subparagraphs (A), (B), (C), and (D) of subsection (p)(1) which
exceeds in the aggregate $125,000 if—
"(A) the court
determines, after notice and a hearing, that the debtor has been convicted
of a felony (as defined in section 3156 of title 18), which under the circumstances,
demonstrates that the filing of the case was an abuse of the provisions
of this title; or
"(i)
any violation of the Federal securities laws (as defined in section
3(a)(47) of the Securities Exchange Act of 1934), any State securities
laws, or any regulation or order issued under Federal securities laws
or State securities laws;
"(ii)
fraud, deceit, or manipulation in a fiduciary capacity or in connection
with the purchase or sale of any security registered under section 12
or 15(d) of the Securities Exchange Act of 1934 or under section 6 of
the Securities Act of 1933;
"(2) Paragraph
(1) shall not apply to the extent the amount of an interest in property described
in subparagraphs (A), (B), (C), and (D) of subsection (p)(1) is reasonably necessary
for the support of the debtor and any dependent of the debtor.".
(b) ADJUSTMENT OF DOLLAR AMOUNTS.—Paragraphs
(1) and
(2)
of section 104(b) of title 11, United States
Code, as amended by section 224, are amended
by inserting "522(p), 522(q)," after "522(n),".
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SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND OTHER
PROPERTY FROM THE ESTATE.
Section 541(b) of title 11, United States Code,
as amended by section 225, is amended by adding after paragraph (6), as added
by section 225(a)(1)(C), the following:
"(A) withheld by an employer from the
wages of employees for payment as contributions—
"(I) an employee benefit
plan that is subject to title I of the Employee Retirement Income
Security Act of 1974 or under an employee benefit plan which
is a governmental plan under section 414(d) of the Internal
Revenue Code of 1986;
"(II) a deferred compensation
plan under section 457 of the Internal Revenue Code of 1986;
or
"(III) a tax-deferred annuity
under section 403(b) of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not constitute
disposable income as defined in section 1325(b)(2); or
"(ii) to a health insurance plan
regulated by State law whether or not subject to such title; or
"(B) received by an employer from employees
for payment as contributions—
"(I) an employee benefit
plan that is subject to title I of the Employee Retirement Income
Security Act of 1974 or under an employee benefit plan which
is a governmental plan under section 414(d) of the Internal
Revenue Code of 1986;
"(II) a deferred compensation
plan under section 457 of the Internal Revenue Code of 1986;
or
"(III) a tax-deferred annuity
under section 403(b) of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall not constitute
disposable income, as defined in section 1325(b)(2); or
"(ii) to a health insurance plan
regulated by State law whether or not subject to such title;".
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SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING BANKRUPTCY PROFESSIONALS.
(a) IN GENERAL.—Section 1334 of title
28, United States Code, is amended —
(1) in subsection (b), by striking "Notwithstanding" and inserting
"Except as provided in subsection (e)(2), and notwithstanding"; and
(2) by striking subsection (e) and inserting the following:
"(e) The district court in which a case under
title 11 is commenced or is pending shall have exclusive jurisdiction—
"(1) of all the property, wherever located,
of the debtor as of the commencement of such case, and of property of the
estate; and
"(2) over all claims or causes of action
that involve construction of section 327 of title 11, United States Code,
or rules relating to disclosure requirements under section 327.".
(b) APPLICABILITY.—This section shall only apply to cases filed after
the date of enactment of this Act.
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SEC. 325. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.
(a) Actions Under Chapter 7, 11,
or 13 of Title 11, United States Code.—Section
1930(a) of title 28,
United States Code, is amended —
(1) by striking paragraph (1) and
inserting the following:
"(1) For a case commenced under—
"(A) chapter 7 of title 11, $200; and
"(B) chapter 13 of title 11, $150.";
and
(2) in paragraph (3), by striking "$800" and inserting "$1000".
(b) United States Trustee System
Fund.—Section 589a(b) of title
28, United States Code, is amended —
(1) by striking paragraph (1) and
inserting the following:
(2) in paragraph (2), by striking
"one-half" and inserting "75 percent"; and
(3) in paragraph (4), by striking
"one-half" and inserting "100 percent".
(c) Collection and Deposit of Miscellaneous
Bankruptcy Fees.—Section 406(b) of the Judiciary Appropriations Act,
1990 (28 U.S.C. 1931 note) is amended by striking "pursuant to 28 U.S.C. section
1930(b)" and all that follows through "28 U.S.C. section 1931" and inserting
"under section 1930(b) of title 28, United States Code, 31.25 of the fees collected
under section 1930(a)(1)(A) of that title, 30.00 percent of the fees collected
under section 1930(a)(1)(B) of that title, and 25 percent of the fees collected
under section 1930(a)(3) of that title shall be deposited as offsetting receipts
to the fund established under section 1931 of that title".
(d) Sunset Date.—The amendments
made by subsections (b) and (c) shall be effective during the 2-year period
beginning on the date of enactment of this Act.
(e) Use of Increased Receipts.—
(1) JUDGES' SALARIES AND BENEFITS.—The amount of fees collected under
paragraphs (1) and (3) of section 1930(a)
of title 28, United States Code, during the
5-year period beginning on the date of enactment of this Act, that is greater
than the amount that would have been collected if the amendments made by
subsection (a) had not taken effect shall be used, to the extent necessary,
to pay the salaries and benefits of the judges appointed pursuant to section
1223 of this Act.
(2) REMAINDER.—Any amount described in paragraph (1), which is not
used for the purpose described in paragraph (1), shall be deposited into
the Treasury of the United States to the extent necessary to offset the
decrease in governmental receipts resulting from the amendments made by
subsections (b) and (c).
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SEC. 326. SHARING OF COMPENSATION.
Section 504 of title 11, United States Code, is
amended by adding at the end the following:
"(c) This section shall not apply with respect
to sharing, or agreeing to share, compensation with a bona fide public service
attorney referral program that operates in accordance with non-Federal law regulating
attorney referral services and with rules of professional responsibility applicable
to attorney acceptance of referrals.".
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SEC. 327. FAIR VALUATION OF COLLATERAL.
Section 506(a) of title 11, United States Code,
is amended by—
(1) inserting "(1)" after "(a)"; and
(2) by adding at the end the following:
"(2) If the debtor is an individual in a case
under chapter 7 or 13, such value with respect to personal property securing
an allowed claim shall be determined based on the replacement value of such
property as of the date of the filing of the petition without deduction for
costs of sale or marketing. With respect to property acquired for personal,
family, or household purposes, replacement value shall mean the price a retail
merchant would charge for property of that kind considering the age and condition
of the property at the time value is determined.".
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SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.
(a) EXECUTORY CONTRACTS AND UNEXPIRED LEASES.—Section
365 of title 11, United States Code, is amended —
(A) in paragraph (1)(A), by
striking the semicolon at the end and inserting the following: "other
than a default that is a breach of a provision relating to the satisfaction
of any provision (other than a penalty rate or penalty provision) relating
to a default arising from any failure to perform nonmonetary obligations
under an unexpired lease of real property, if it is impossible for the
trustee to cure such default by performing nonmonetary acts at and after
the time of assumption, except that if such default arises from a failure
to operate in accordance with a nonresidential real property lease,
then such default shall be cured by performance at and after the time
of assumption in accordance with such lease, and pecuniary losses resulting
from such default shall be compensated in accordance with the provisions
of this paragraph;"; and
(B) in paragraph (2)(D), by
striking "penalty rate or provision" and inserting "penalty rate or
penalty provision";
(A) in paragraph (2), by inserting
"or" at the end;
(B) in paragraph (3), by striking
"; or" at the end and inserting a period; and
(C) by striking paragraph (4);
(A) by striking paragraphs (5)
through (9); and
(B) by redesignating paragraph (10) as paragraph
(5); and
(4) in subsection (f)(1) by striking
"; except that" and all that follows through the end of the paragraph and
inserting a period.
(b) IMPAIRMENT OF CLAIMS OR INTERESTS.—Section
1124(2) of title 11, United States Code, is
amended —
(1) in subparagraph (A), by inserting
"or of a kind that section 365(b)(2) expressly does not require to be cured"
before the semicolon at the end;
(2) in subparagraph (C), by striking
"and" at the end;
(3) by redesignating subparagraph (D) as subparagraph
(E); and
(4) by inserting after subparagraph
(C) the following:
"(D) if such claim or such interest
arises from any failure to perform a nonmonetary obligation, other than
a default arising from failure to operate a nonresidential real property
lease subject to section 365(b)(1)(A), compensates the holder of such
claim or such interest (other than the debtor or an insider) for any
actual pecuniary loss incurred by such holder as a result of such failure;
and".
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SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.
Section 503(b)(1)(A) of title 11, United States
Code, is amended to read as follows:
"(A) the actual, necessary costs and expenses
of preserving the estate including—
"(i) wages, salaries, and commissions
for services rendered after the commencement of the case; and
"(ii) wages and benefits awarded pursuant
to a judicial proceeding or a proceeding of the National Labor Relations
Board as back pay attributable to any period of time occurring after
commencement of the case under this title, as a result of a violation
of Federal or State law by the debtor, without regard to the time of
the occurrence of unlawful conduct on which such award is based or to
whether any services were rendered, if the court determines that payment
of wages and benefits by reason of the operation of this clause will
not substantially increase the probability of layoff or termination
of current employees, or of nonpayment of domestic support obligations,
during the case under this title;".
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SEC. 330. DELAY OF DISCHARGE DURING PENDENCY OF CERTAIN PROCEEDINGS.
(a) CHAPTER 7.—Section 727(a) of title
11, United States Code, as amended by section 106, is amended —
(1) in paragraph (10), by striking
"or" at the end;
(2) in paragraph (11) by striking
the period at the end and inserting "; or"; and
(3) by inserting after paragraph (11)
the following:
"(12) the court after notice and a hearing
held not more than 10 days before the date of the entry of the order granting
the discharge finds that there is reasonable cause to believe that—
"(A) section 522(q)(1) may be applicable
to the debtor; and
"(B) there is pending any proceeding
in which the debtor may be found guilty of a felony of the kind described
in section 522(q)(1)(A) or liable for a debt of the kind described in
section 522(q)(1)(B).".
(b) CHAPTER 11.—Section 1141(d) of
title 11, United States Code, as amended by section 321,
is amended by adding at the end the following:
"(C) unless after notice and a hearing
held not more than 10 days before the date of the entry of the order granting
the discharge, the court finds that there is no reasonable cause to believe
that—
"(i) section 522(q)(1) may be applicable
to the debtor; and
"(ii) there is pending any proceeding
in which the debtor may be found guilty of a felony of the kind described
in section 522(q)(1)(A) or liable for a debt of the kind described in
section 522(q)(1)(B).".
(c) CHAPTER 12.—Section 1228 of title
11, United States Code, is amended —
(1) in subsection (a) by striking
"As" and inserting "Subject to subsection (d), as",
(2) in subsection (b) by striking
"At" and inserting "Subject to subsection (d), at", and
(3) by adding at the end the following:
"(f) The court may not grant a discharge under
this chapter unless the court after notice and a hearing held not more than
10 days before the date of the entry of the order granting the discharge finds
that there is no reasonable cause to believe that—
"(1) section 522(q)(1) may be applicable
to the debtor; and
"(2) there is pending any proceeding in
which the debtor may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).".
(d) CHAPTER 13.—Section 1328 of title
11, United States Code, as amended by section 106, is amended —
(1) in subsection (a) by striking
"As" and inserting "Subject to subsection (d), as",
(2) in subsection (b) by striking
"At" and inserting "Subject to subsection (d), at", and
(3) by adding at the end the following:
"(h) The court may not grant a discharge under
this chapter unless the court after notice and a hearing held not more than
10 days before the date of the entry of the order granting the discharge finds
that there is no reasonable cause to believe that—
"(1) section 522(q)(1) may be applicable
to the debtor; and
"(2) there is pending any proceeding in
which the debtor may be found guilty of a felony of the kind described in
section 522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).".
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SEC. 331. LIMITATION ON RETENTION BONUSES, SEVERANCE PAY, AND CERTAIN OTHER
PAYMENTS.
Section 503 of title 11, United States Code, is
amended by adding at the end the following:
"(c) Notwithstanding subsection (b), there shall
neither be allowed, nor paid—
"(1) a transfer made to, or an obligation
incurred for the benefit of, an insider of the debtor for the purpose of
inducing such person to remain with the debtor's business, absent a finding
by the court based on evidence in the record that—
"(A) the transfer or obligation is
essential to retention of the person because the individual has a bona
fide job offer from another business at the same or greater rate of
compensation;
"(B) the services provided by the person
are essential to the survival of the business; and
"(i) the amount of the transfer
made to, or obligation incurred for the benefit of, the person is
not greater than an amount equal to 10 times the amount of the mean
transfer or obligation of a similar kind given to nonmanagement
employees for any purpose during the calendar year in which the
transfer is made or the obligation is incurred; or
"(ii) if no such similar transfers
were made to, or obligations were incurred for the benefit of, such
nonmanagement employees during such calendar year, the amount of
the transfer or obligation is not greater than an amount equal to
25 percent of the amount of any similar transfer or obligation made
to or incurred for the benefit of such insider for any purpose during
the calendar year before the year in which such transfer is made
or obligation is incurred;
"(2) a severance payment to an insider of
the debtor, unless—
"(A) the payment is part of a program
that is generally applicable to all full-time employees; and
"(B) the amount of the payment is not
greater than 10 times the amount of the mean severance pay given to
nonmanagement employees during the calendar year in which the payment
is made; or
"(3) other transfers or obligations that
are outside the ordinary course of business and not justified by the facts
and circumstances of the case, including transfers made to, or obligations
incurred for the benefit of, officers, managers, or consultants hired after
the date of the filing of the petition.".
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SEC. 332. FRAUDULENT INVOLUNTARY BANKRUPTCY.
(a) Short Title.—This
section may be cited as the "Involuntary Bankruptcy Improvement Act of 2005".
(b) Involuntary Cases.—Section
303 of title 11, United States Code, is amended
by adding at the end the following:
"(A) the petition under this section is
false or contains any materially false, fictitious, or fraudulent statement;
"(B) the debtor is an individual; and
"(C) the court dismisses such petition,
the court, upon the motion of the debtor, shall seal all the records of the
court relating to such petition, and all references to such petition.
"(2) If the debtor is an individual and the
court dismisses a petition under this section, the court may enter an order
prohibiting all consumer reporting agencies (as defined in section 603(f) of
the Fair Credit Reporting Act (15 U.S.C. 1681a(f))) from making any consumer
report (as defined in section 603(d) of that Act) that contains any information
relating to such petition or to the case commenced by the filing of such petition.
"(3) Upon the expiration of the statute of limitations
described in section 3282 of title 18, for a violation of section 152 or 157
of such title, the court, upon the motion of the debtor and for good cause,
may expunge any records relating to a petition filed under this section.".
(c) Bankruptcy Fraud.—Section
157 of title
18, United
States Code, is amended by inserting ", including a fraudulent involuntary bankruptcy
petition under section 303 of such title" after "title 11".
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