COMPARISON OF THE BANKRUPTCY REFORM ACT, H.R. 833, PASSED BY THE HOUSE AND THE SENATE
CRS Report for Congress
Comparison of the Bankruptcy Reform Act,
th
H.R. 833, 106 Congress,
Passed by the House and the Senate
March 6, 2000
Robin Jeweler
Legislative Attorney
American Law Division
Congressional Research Service The Library of Congress
Comparison of the Bankruptcy Reform Act, H.R. 833,
106th Congress, Passed by the House and the Senate
Summary
On May 5, 1999, the House passed H.R. 833, the Bankruptcy Reform Act , 106th
Cong., 1st Sess. (1999), by a vote of 313-108.
The Senate brought S. 625, the Bankruptcy Reform Act, 106th Cong., 1st Sess.
(1999), to the floor on November 4, 1999. After considerable debate and the
adoption of many germane and nongermane amendments, the Senate struck the
language of the House version, substituted its language, and passed H.R. 833 on
February, 2, 2000, by a vote of 83-14.
This report surveys the legislation’s legislative history. It provides a brief
narrative and side-by-side comparison of selected provisions in the House and Senate
bills, with an emphasis on consumer bankruptcy.
Contents
Legislative history in the 105th Congress.......................1
H.R. 833 and S. 625, 106th Congress, 1st Sess. (1999): The Bankruptcy
Reform Acts of 1999 and 2000..........................2
Structural overview of the Senate and House bills...............3
Side-by-side comparison...................................5
Comparison of the Bankruptcy Reform Act,
th
H.R. 833, 106 Congress, Passed by the
House and the Senate
On May 5, 1999, the House passed H.R. 833, the Bankruptcy Reform Act , 106th
Cong., 1st Sess. (1999), by a vote of 313-108.1
The Senate brought S. 625, the Bankruptcy Reform Act, 106th Cong., 1st Sess.
(1999), to the floor on November 4, 1999. After considerable debate and the
adoption of many germane and nongermane amendments, the Senate struck the
language of the House version, substituted its language, and passed H.R. 833 on
February, 2, 2000, by a vote of 83-14.
When the Senate brought S. 625 to the floor, more than 300 germane and
nongermane amendments were offered. Many amendments, including a modified
manager’s amendment, were passed. Others failed or were tabled. Among the
nongermane amendments that passed was one which increased the federal minimum
wage and amended provisions in the Internal Revenue Code dealing with small
business taxes, long term health care insurance, and pensions.2 Another nongermane
amendment, entitled the “Methamphetamine Anti-Proliferation Act,” involves criminal3
enforcement of drug laws.
At this time, official House and Senate conferees have not been announced.
Whether the nongermane provisions will be stripped from the Senate bill or addressed4
in a conference is the subject of speculation.
This report surveys the legislation’s legislative history. It provides a brief
narrative and side-by-side comparison of selected provisions in the House and Senate
bills, with an emphasis on consumer bankruptcy.
Legislative history in the 105th Congress. Shortly before the close of the
second session of the 105th Congress, legislation which would have dramatically
changed the manner in which consumer bankruptcies are administered under the U.S.
Bankruptcy Code, 11 U.S.C. § 101 et seq., came close to passage. Both the House
1H.Rept. 106-123, 106th Cong., 1st Sess. (1999).
2Titles XII and XIII of H.R. 833, 106th Cong., 2nd Sess. (2000).
3Title XVII, id.
4See, e.g., “Pensions Provisions, Tax Breaks Expected to be Dropped from Senate Bankruptcy
Bill” and “Tax Breaks in Bankruptcy Bill Could be Added Back, Armey Says,” in 12 BBLR
and Senate enacted different versions of H.R. 3150, 105th Congress, 2d Sess. (1998).
A conference was agreed to and a report was filed.5 The House agreed to the
conference report version of the bill by a vote of 300 to 125 on October 9, 1998. But
the bill, which President Clinton had threatened to veto, was not brought before the
Senate for a vote prior to adjournment.6
Although the Senate and House bills differed significantly, they were referred to
as implementing “needs based” bankruptcy, i.e.,a consumer bankruptcy system that
differentiates among debtors and, by application of external jurisdictional standards
or through case-by-case scrutiny, imposes strict filing standards and strives to ensure
that creditors receive a higher distribution than they might otherwise.
H.R. 833 and S. 625, 106th Congress, 1st Sess. (1999): The
Bankruptcy Reform Acts of 1999 and 2000. Like their predecessors, both bills
are comprehensive. With respect to consumer bankruptcy, a great deal of the impetus
towards legislative action has been fueled by the ever-increasing rate of consumer
bankruptcy filings.7 Congressional debate over bankruptcy reform during the 105th
Congress repeatedly evidenced a desire by Members to elevate personal responsibility
in consumer financial transactions; to prevent bankruptcy filings from being utilized
by consumers as a financial planning tool rather than a last-resort solution to personal
financial crisis; and, to recapture the stigma associated with a bankruptcy filing, which
many believe has eroded since enactment of the U.S. Bankruptcy Code in 1978.
Opponents of the legislation argue, inter alia, that the growth in consumer
bankruptcies is not a result of liberal bankruptcy laws but is the consequence of
greatly expanded consumer credit and high-risk lending practices; that the imposition
of a means test will permit debtors to manipulate jurisdictional filing criteria; that
undermining the “fresh start” in bankruptcy by making commercial debt
nondischargeable will adversely impact debtors’ family support obligations; that the
increased cost of administering the U.S. Bankruptcy Court system will not be justified
by the incremental increase in debt recovery realized by creditors; and, that the
legislation is no longer warranted because recent statistics indicate that consumer
bankruptcy filings have leveled off and, in some instances, declined.
Hearings during the 106th Congress elicited testimony by many experts
suggesting significant disagreement over the causes of increased consumer filings and
the most effective way to enhance debt repayment.8
5 H.Rept. 105-794, 105th Cong., 2d Sess. (1998).
6 “Bankruptcy Reform Bill’s Fate in Doubt; Congress, Administration Seek Middle
Ground,” 10 BBLR 1044 (October 15, 1998).
7 H.Rept. 105-540, 105th Cong., 2d Sess. 54-55 (1998) to accompany H.R. 3150; S.Rept.
8 On March 11, 1999, House and Senate Judiciary Subcommittees held a joint bankruptcy
hearing. The House Subcommittee on Commercial and Administrative Law held additional
hearings on March 16, 17, and 18.
Structural overview of the Senate and House bills. Consumer
bankruptcy reform. Titles I through III of the Senate bill encompass amendments to
consumer bankruptcy, including the needs-based approach to chapter 7 and 13 filings.
The House bill addresses these provisions in Titles I and II.
General business and small business bankruptcy. The Senate bill deals with
these topics in Title IV; the House in Titles III and IV.
Municipal bankruptcy. Amendments to Chapter 9 of the U.S. Bankruptcy Code
dealing with municipal reorganization are addressed in Title V of both the Senate and
House bills.
Streamlining the bankruptcy system. Title VI of the House bill contains
substantive and procedural provisions addressing consumer bankruptcy. The Senate
bill does not have a comparable title, but, in some cases, has analogous provisions in
other titles.
Improved bankruptcy statistics and data. Title VI of the Senate bill and Title
VII of the House bill create rules for collection and analysis of bankruptcy statistics.
Bankruptcy tax provisions. Title VII of the Senate version and Title VIII
contain extensive provisions governing taxation of the bankruptcy estate. (Compare
Title XIII of the Senate bill which makes extensive amendments to the Internal
Revenue Code.)
Ancillary and cross-border cases. Title VIII of the Senate bill and Title IX of
the House bill would add a new chapter 15 to the Code to address issues arising from
international insolvencies.
Financial contract provisions. Title IX of the Senate bill and Title X of the
House bill deal with commercial banking and financial issues such as forward
contracts, netting, swap and repurchase agreements, and asset-backed securitizations.
Technical corrections. Title XIV of the Senate bill is entitled “Technical
Amendments.” Title XI of the House bill is “Technical Corrections.” Both are
Bankruptcy Code related. In the Senate bill, however, the technical corrections
appear broader in scope. For example, provisions create temporary bankruptcy
judgeships;9 duplicate “family fishermen” provisions under Title X;10 and, contain
provisions that are arguably substantive, for example:
!prohibiting a bankruptcy filing by a political committee subject to the
jurisdiction of the Federal Election Commission; making fines or penalties
imposed under federal election law nondischargeable;11 and
9H.R. 833, passed by the Senate at § 1425.
10Id. at § 1426.
11Id at. §§ 1430- 1431.
!raising the jurisdictional debt limit for family farmers from $1,500,000 to
$3,000,000 and reducing the farming debt requirement from 80 percent of
indebtedness to 50 percent.12
Several of the germane and non-germane amendments adopted by the Senate
during floor debate appear as separate titles of the bill. They do not have analogous
titles in the House version, although in many instances there are comparable
provisions in the bill.
Protection of family farmers and family fishermen. Organized as Title X of the
Senate bill, this title would define a “family fisherman” and include this new debtor
class under chapter 12 coverage. Special bankruptcy protections would inure to
“family fishermen.”
Health care and employee benefits. Title XI of the Senate bill has provisions
providing for the disposal of patient records and/or transfer of patients of a specified
“health care facility” in the event of a bankruptcy necessitating closure. It designates
the costs incurred by a trustee or federal agency in closing the business, disposing of
records, and transferring patients as administrative expenses. The trustee is expressly
directed to “use all reasonable and best efforts” in the transfer of patients to
appropriate facilities. A patient ombudsman must be appointed by the court to
monitor patient care and report to the court during the bankruptcy.
Amendments to Fair Labor Standards Act of 1938 and tax relief. Titles XII and
XIII of the Senate bill make amendments to the minimum wage provision of the Fair
Labor Standards Act. The minimum wage would be raised from $5.15 to $6.15 per
hour, phased in through March 1, 2002. Amendments to the Internal Revenue Code
are made in Title XIII. They address issues such as small business tax relief, health
and long-term care insurance, and pensions. Subtitle D of Part VI is entitled
“Revenue Provisions.” Provisions of this Title of the Senate version have been
criticized by some Members of the House for violating the constitutional requirement
that revenue generating measures originate in the House.
Financial institutions insolvency improvement. Title XVI of the Senate bill
amends provisions of the Federal Deposit Insurance Act, 12 U.S.C. § 1811 et seq.,
dealing with insolvent financial institutions. Several sections correspond to
amendments to the Bankruptcy Code made by Title IX of the bill dealing with
financial contracts, including statutory definitions of various agreements. Several
comparable provisions are included in Title X of the House bill.
Methamphetamine and other controlled substances. Title XVII of the Senate
bill would enact the “Methamphetamine Anti-Proliferation Act of 2000.”
Protection from the impact of bankruptcy of certain electric utilities. Title
XVIII of the Senate bill would enact the “Emergency Imported Electric Power Price
Reduction Act of 2000.” This act would abrogate and void a contract for the
importation of electric power by the Vermont Joint Owners under the Firm Power
12Id. at § 1437.
And Energy Contract with Hydro-Quebec dated December 4, 1987. It would vest
enforcement of an amended contract in applicable states’ attorney generals.
Consumer credit disclosure. Title XIX of the Senate bill would amend the Truth
in Lending Act (TILA), 15 U.S.C. § 1601 et seq., to require enhanced minimum
payment disclosures under an open end credit plan; enhanced disclosures regarding
the tax deductibility of credit extensions which exceed the fair market value of a
dwelling for credit transactions secured by the consumer’s dwelling; enhanced
disclosures related to introductory “teaser” rates; additional disclosures related to
Internet-based open end credit solicitations; and disclosures related to late payment
deadlines and penalties. TILA would be amended to prohibit termination of a credit
account because the consumer has not incurred finance charges. Several related
provisions exist in the House bill.
Side-by-side comparison. The chart below provides a brief comparison of
selected provisions in the Senate and House bills.13
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Means test, 11 U.S.C. § § 704, 707:
Implementation Would amend 11 U.S.C. §All parties may move for
trustee, or any party inbut the standing trustee
interest to challenge amust review each filing and
debtor’s eligibility to filemove for conversion where
under chapter 7. Ifabuse is found. § 102
indicated, the U.S. trustee
must file a statement that
the debtor’s case is a
presumed abuse of chapter
Definition of “currentIncome excludes SocialExcludes Social Security
monthly income”Security benefits.benefits and payments to
victims of war crimes or
crimes against humanity.
13For a detailed side-by-side comparison prepared by the law firm of Davis Polk & Wardwell
of the U.S. Code as amended by the respective bills, see
<[www.dpw.com/bankruptcyreform]>. Additional side-by-side comparisons are available
at the American Bankruptcy Institute’s website <[www.abiworld.org/legis]>.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Presumed abuseDebtor presumed to beAbuse exists if, by
abusing chapter 7 if currentcalculating monthly
monthly income, excludingincome, excluding allowed
allowed deductions, secureddeductions, secured debt
debt payments, and prioritypayments, and priority
unsecured debt payments,unsecured debt payments,
multiplied by 60, wouldand multiplying by 60
permit a debtor to pay themonths, there is a surplus
lesser of 25% ofof not less than $6,000 (or
nonpriority unsecured debt$100 per month over 60
or $15,000 (or $250 permonths). § 102.
month over 60 months).
Calculation of permissibleExpenses to be calculated Expenses to be calculated
monthly living expenses“under standards issued byas specified under the
the Internal RevenueNational Standards and
Service for the area inLocal Standards, and the
which the debtor resides.” debtor’s actual monthly
expenses for the categories
Individualized expensesspecified as Other
may include charitable andNecessary Expenses issued
religious contributions ofby the Internal Revenue
up to 15% of the debtor’sService for the area in
gross annual income; debtswhich the debtor resides. A
incurred to protect thedebtor may also subtract an
debtor’s family fromallowance of up to 5% of
domestic violence; actualthe IRS food and clothing
expenses for the care andcategories.
support of nondependent,
elderly, ill or disabledIndividualized expenses
household or familymay include private school
members; and, arrearagetuition of up to $10,000 per
payments to securedyear; charitable and
creditors necessary toreligious contributions of
maintain possession of theup to 15% of the debtor’s
debtor’s home or motorgross annual income,
vehicle.§ 102.administrative expenses,
and reasonable attorneys
fees. § 102.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
To rebut the presumptionThe debtor mustThe debtor must
of abusedemonstrate “specialdemonstrate “extraordinary
circumstances.” § 102.circumstances.” § 102.
Safe harbor exemptionThe U.S. trustee orNo party may make a
from the means testbankruptcy administratormotion to convert the
may file a statement that adebtor to chapter 13 if the
conversion motion would debtor (and spouse
not be appropriate if thecombined) have a monthly
debtor’s current monthlyincome “equal to or less
income is less than thethan the regional median
highest national or thehousehold income
applicable State mediancalculated on a semiannual
family income. basis.” § 102.
The U.S. trustee may also
decline to file a motion to
convert if the debtor’s
monthly income is between
100 and 150% of the
national or applicable State
median income, and would
permit a debtor to pay the
lesser of 25% of
nonpriority unsecured debt
or $15,000 (or $250 per
month over 60 months). §
Attorney sanctions forIf a trustee moves to have aIf a panel trustee brings a
improper filingdebtor’s case converted andsuccessful motion for
the court approves it anddismissal or conversion,
finds that the filing wascounsel for the debtor will
“frivolous,” counsel for thebe liable to reimburse the
debtor must reimburse thetrustee for costs, attorneys’
trustee for costs, includingfees, and payment of a civil
attorneys’ fees, and may bepenalty if the court finds a
required to pay a civilviolation of Bankruptcy
penalty. § 102.Rule 9011. § 102.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Creditor sanctions forThe court may award theThe court may award the
improper motionsdebtor costs for contestingdebtor costs in contesting
an unsuccessful motion toan unsuccessful motion to
convert if the court findsconvert if the court finds
that the motion was notthat the motion was not
substantially justified, orsubstantially justified, or
was intended to coerce thewas intended to coerce the
debtor into waiving rightsdebtor into waiving rights
under the Bankruptcyunder the Bankruptcy
Code. A creditor whoseCode. § 102
claim is less than $1000 is
not liable for sanctions. §
102
Dismissal of filings byA crime victim or party inNo comparable provision.
persons convicted ofinterest may request
violent crimes or drugdismissal of the voluntary
traffickingbankruptcy case of the
convicted debtor. The
court must grant the
dismissal unless the filing is
necessary to satisfy a
domestic support
obligation. § 102
Mandatory creditDebtor must undergo creditComparable provisions, but
counseling counseling within 180 daysthe debtor must undergo
of filing, and may notcredit counseling within 90
obtain a discharge untildays of filing. Debtors
completion of a personalmust also complete an
financial managementapproved instructional
instructional course. course.
The U.S. trustee orThe Federal Trade
bankruptcy administratorCommission and the U.S.
for the judicial district istrustee shall regulate and
directed to oversee andapprove credit counseling
approve nonprofit budgetagencies. § 302.
and credit counseling
agencies. § 106
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
AuditsThe Attorney General isComparable provision at
directed to establish a§ 602.
procedure to ensure random
audits of no less than 1out
of every 250 individual
filings; The U.S. trustee is
authorized to enter into
contracts with auditors, and
to take action when
misstatements in the
debtor’s petition and
schedules are identified.
§ 601.
Promotion of alternativeCreditor’s allowable claimThe court may reduce a
dispute resolutionmay be reduced by 20% ifcreditor’s claim by 20% if
a court finds that thethe debtor can prove by
creditor “unreasonably“clear and convincing”
refused to negotiate aevidence that a creditor
reasonable alternativeunreasonably refused to
repayment schedulenegotiate alternative
proposed by an approvedrepayment of at least 60%
credit counseling agency.”of the debt. § 109.
§ 201.
Reaffirmation agreementsImposes enhancedImposes enhanced
requirements for approvalrequirements for approval
of a reaffirmationof a reaffirmation
agreement when the debtoragreement when the debtor
is not represented byis not represented by
counsel; requires U.S.counsel. § 108.
Attorney and FBI to
investigate abusiveAllows a debtor to recover
reaffirmation practices;actual damages or $1000,
authorizes states attorneywhichever is greater, when
generals to bring classa creditor violates
actions to recover damagesreaffirmation agreement
for violations ofrequirements, but prohibits
reaffirmation provisions. class actions to redress
§ 203.abusive reaffirmation
practices by creditors.
§ 114.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Homestead exemptionImposes a federal cap ofImposes lengthened
$100,000 on exemptionsresidency requirements.
under state law and§§ 124-125.
lengthened residency
requirements. States are notImposes a $250,000 cap on
permitted to opt out of thehomestead exemptions
federal cap. §§ 307, 308(except for family farmers).
and 324.Allows states to opt out of
the monetary cap; delays
effective date until the end
of the first regular session
of each state legislature
following enactment. §
Exemption for saving forSubject to certain IRSAllows a debtor, subject to
postsecondary educationrequirements, excludescertain requirements, to
funds up to $5000 madeexempt up to $50,000 for
within a year of filing in anone child, or $100,000 per
education individualfamily for postsecondary
retirement account; and/oreducation. § 113.
funds used to purchase a
tuition credit or certificate
under a qualified state
tuition program. §225
Retirement SavingsWould clarify and expandComparable provision at
Exemption Broadenedthe law to provide that§ 203.
retirement accounts that are
tax exempt under the
Internal Revenue Code are
exempted from the debtor’s
estate. § 224
Withheld Wages forWithheld wages forNo comparable provision.
Contributions tocontributions to employee
Employee Benefit Plansbenefit plans would be
excluded from the debtor
(employer’s ) estate. This
would override the current
unsecured priority at §
507(a)(3) which caps
priority benefit claims at
$4,300. § 322.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Domestic support owed toWould move domesticComparable provision at
individuals andsupport obligations to first§ 139.
government units madepriority, which is currently
first priorityallocated to administrative
expenses of the bankruptcy
estate. Administrative
expenses would become
second priority. § 212.
Priority assigned toA new § 507 tenth priorityComparable provision at
claims for liabilityis created for unsecured § 129.
incurred by the debtorclaims for liability incurred
DUIby a debtor from driving or
operating a vessel while
under the influence of
alcohol or drugs. Claims of
this nature are also
nondischargeable. § 223.
Trustee notification ofWould direct the trustee toComparable provision at
child support claimnotify a priority child§ 149.
holderssupport recipient of the
existence of a state child
support enforcement
agency, and, upon
discharge, the existence of
nondischargeable and
reaffirmed debt. § 219.
Definition of “householdDefines household goodsDefines household goods
goods”narrowly to include only 1more broadly to include
radio; 1 television; 1 VCR;“personal property
and 1 personal computernormally found in or
but only if used for thearound a residence,”
education or entertainmentexcluding motor vehicles.
of a minor child. § 313.§ 145.
Plan durationDebtors who have beenChapter 13 plans to have 5
converted to chapter 13year duration for families
from chapter 7 will have 5whose monthly income is
year plans; other debtorsnot less than the highest
will have 3 year plans. national median family
§ 318.income. Families below the
highest national median
income would have 3 year
plans. § 606.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Residential lease exceptedThe automatic stay will notComparable provision at
from the automatic stayoperate to stop the§ 136.
continuation of, or in some
cases, the commencement
of eviction actions by a
lessor against a debtor
involving rental property in
which the debtor resides. §
Nondischargeable debts
Consumer debts presumed Consumer debts owed to aConsumer debts owed to a
fraudulentsingle creditor for moresingle creditor for more
than $250 for “luxurythan $250 for “luxury
goods” incurred within 90goods” incurred within 90
days of filing; and cashdays of filing presumed to
advances for more thanbe fraudulent. § 133
$750 under an open end
credit plan within 70 days
of filing are presumed to be
nondischargeable.
§ 310
Debts incurred to payDebts incurred with anComparable provision, but
nondischargeable debtsintent to pay aall debts incurred within 90
are nondischargeablenondischargeable debt willdays of filing to pay
become nondischargeable;nondischargeable debts are
debts incurred within 70nondischargeable without
days will be presumed to beregard to intent. § 146.
nondischargeable. § 314.
Debts to government unitsDefines “domestic supportComparable provisions at
for domestic supportobligation” to include debts§§ 138-139.
owed to or recoverable by a
governmental unit. §§ 211,
Expanded definition ofAdds qualified educationalComparable provision at
student loanloans as defined under §§ 281.
221 of the IRS to those
educational loans that are
currently nondischargeable.
§ 220.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Expanded definition ofExpands the types of post-Comparable provision at
nondischargeablepetition condo and§ 214.
condominium andhomeowners association
homeowners associationfees that are
feesnondischargeable by
omitting requirement that in
order to be
nondischargeable the debtor
must reside in it
postpetition.
§ 414.
Debts incurred through theAny debt that results fromNo comparable provision.
commission of violence atany judgment entered in a
health care facilities,state or federal court for
including abortion clinicsdamages to a clinic or
violation of the civil rights
of individuals providing or
obtaining reproductive
health care services would
be nondischargeable. § 328.
Loan repayments toMakes nondischargeable,Comparable provision at
debtor’s retirementi.e., allows an employer to § 203.
savings or thrift planwithhold from debtor’s
wages loan repayments to
debtor’s savings/retirement
plan. § 224.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Lien stripping on securityChapter 13 debtors wouldConsumer debtors would
interests in consumernot be permitted tonot be permitted to
goods (cramdown)bifurcate security interestsbifurcate secured claims for
in an automobile purchasedconsumer goods purchased
within 5 years of the filing;within 5 years of the
or in other consumer goodsbankruptcy filing. A
purchased within 6-monthssecured creditor’s
of the filing. § 306.allowable claim would be
the retail cost to replace the
item. §§ 122-123.
Consumer credit practices
Amendments to the TruthTILA amended to requireTILA amended to require
in Lending Actenhanced minimumenhanced minimum
payment disclosures underpayment disclosures under
an open end credit plan;an open end credit plan;
enhanced disclosuresdisclosures related to
regarding the taxintroductory “teaser” rates;
deductibility of creditand, disclosures related to
extensions which exceedInternet-based open end
the fair market value of acredit solicitations.
dwelling for credit § 112.
transactions secured by the
consumer’s dwelling;
disclosures related to
introductory “teaser” rates;
disclosures related to
Internet-based open end
credit solicitations; and
disclosures related to late
payment deadlines and
penalties. TILA would be
amended to prohibit
termination of a credit
account because the
consumer has not incurred
finance charges. §§ 1901-
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Consumer credit studiesThe Board of Governors ofThe Board of Governors of
the Federal Reserve wouldthe Federal Reserve would
be directed to study existingbe directed to study
protections for consumersexisting protections for
for unauthorized use of aconsumers for unauthorized
dual use debit card. § 1907use of a dual use debit
card. § 111.
The Board would be
directed to study the tax
deductibility of credit
extensions which exceed
the fair market value of a
dwelling for open and
closed end credit
transactions secured by the
consumer’s dwelling; to
study the impact of
minimum periodic payment
features on consumer
default rates and financial
difficulty; and, if
appropriate, to issue
regulations to provide more
disclosure concerning these
practices. § § 110, 112.
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
Study of bankruptcy impactComptroller GeneralComparable provision at
of credit extended todirected to study§ 609.
dependent studentsbankruptcy impact of credit
extensions to students in
postsecondary school. §
Business Bankruptcy
Small business bankruptcySubtitle B of Title IV hasTitle IV of the bill deals
provisions defining awith “small business”
“small business” forchapter 11 filings. A small
chapter 11 purposes as onebusiness is defined as one
with debts underwith debts of under
$3,000,000. The debtor’s$4,000,000. The debtor’s
period of exclusivity to fileperiod of exclusivity to file
a reorganization plan is 180a reorganization plan is 90
days. A plan must bedays. A plan must be
confirmed within 175 days.confirmed within 150 days.
Provisions requireProvisions require
establishment of uniformestablishment of uniform
accounting and reportingaccounting and reporting
standards for smallstandards for small
businesses. Grounds forbusinesses. Grounds for
appointment of a trusteeappointment of a trustee
and the trustee’s generaland the trustee’s general
supervisory duties aresupervisory duties are
expanded, as are groundsexpanded, as are grounds
for dismissal or conversionfor dismissal or conversion
of the case. §§ 431-442.of the case. §§ 401-413.
Venue for chapter 11No comparable provisionVenue for filing corporate
corporate filings chapter 11 reorganizations
would be where the
debtor’s principal place of
business is located. § 304.
General provisions
In forma pauperis filingsDirects the JudicialComparable provision that
Conference to prescribegives courts broader
procedures for waivingdiscretion to waive
bankruptcy fees for anbankruptcy fees for an
individual debtor underindividual in chapter 7 who
chapter 7 whose income iscannot pay in installments.
less than 125 percent of the § 148.
income official poverty line
and who is unable to pay
the fee in installments. §
Selected ProvisionsH.R. 833 (S. 625) asH.R. 833 as passed by
passed by the Senatethe House
General effective dateSubject to expressComparable provision at
provisions otherwise, the§ 1201.
new law will take effect
180 days after enactment
and will not apply to cases
commenced before the
effective date. § 1501.
Bankruptcy judgeshipsCreates new temporaryComparable provision at
bankruptcy judgeships for § 128.
designated districts. §