Area of Impact Issue H.R. 833¹ Section S. 625² Section Details Chapter 7 Means testing §102 §102 Six-month pre-petition income (with exclusion in 833) less (1) living expenses, using IRS collection standards, (2) secured debt, (3) priority debt, (4) charitable contributions, (5) (in 833 only) private school expenses. Presume abuse if resulting net monthly income is at least $100 (833) or $250 (625). Presumption overcome only by showing extraordinary circumstances, detailed and sworn to by debtor and attorney. Trustee (833) or UST (625) must file statement regarding presumption of abuse; court must serve on creditors. Trustee must file motion or statement in all presumption cases where income is above defined median. General standing limited by median income. Debtor attorney liability §102(a)(3) §102(a)(3) Fees shifted to debtor attorney if bankruptcy filing is not substantially justified (625) or violation of rule 9011 (833). Debtor attorney also warrants accuracy of lists, schedules and documents. Domestic support priority §139 §142 Support of obligations would be first priority, ahead of administrative expenses. Retention of personal property security §119 §304 Debtor may not retain personal property secured by PMSI unless agrees within 45 days after §341 meeting to reaffirm or redeem. Chapter 13 Secured claims: Stripdown/adequate protection §§122, 135 §§306(b), 309(c) PMSIs within five years of bankruptcy not subject to stripdown (833). All secured debts within six months of bankruptcy and motor vehicle loans with five years not subject to stripdown (625). Pre-confirmation adequate protection must be paid debtor in no less than contractual payments. Timing of events §605 §317 Ninety days for plan (625). Twenty days for confirmation after 341 (833). Length of Plan §606 §318 Five years minimum plan required for debtors with more than median income (833) or debtors who convert from chapter 7 to chapter 13 (625). Debtor who first files in chapter 13 only required to do three-year plan (625). Superdischarge §§127, 807 §§314, 707 Eliminates superdischarge for §523(a)(1), (2), (3)(b), (4) and (6) (personal injury only). Limit on co-debtor stay §131   Terminates the co-debtor stay 30 days from filing where the debtor did not receive consideration for claim held by creditor. General Successive discharge; time between filings §137 §312 No chapter 13 discharge if any prior discharge in a case filed within five years. No chapter 7 discharge if any prior discharge in a chapter 7 case filed within eight years. Tax returns §603(b) §315(b) Three years of returns must be filed within 45 days of case filing (extendable once for 45 days maximum) or automatic dismissal. Creditors may inspect and copy. Audits §602 §601 Random audits of 0.4 percent of consumer filings and scheduled deviating from mean, conducted under GAAS by licensed or certified public accountants (833), or conducted under regulations of the Attorney General (625). Debtor education §§104, 302(b) §§104, 105(b) Completion of education programs made a condition for discharge; pilot programs run concurrent with mandatory programs. Credit counseling §302(a) §105(a) Counseling from an approved credit counseling service made a requirement of eligibility under §109; exigency exception if services are unavailable. Notice to creditors §603(a) §315(a) Creditors must be served at addresses filed with the court or (833 only) at the address on the last correspondence with the debtor. Homestead exemptions §§124, 147 §307 730-day residency requirement for use of state exemptions; $250,000 homestead cap, waivable by state legislation (833) only. No cap in Senate bill at this point. Reaffirmations §§108, 114 §204 Reaffirmation of unsecured debts requires court fairness hearing; waivable by represented debtor. No class actions for violation of discharge injunction (833 only). Limitation on luxury goods §133 §310 Presumption that debts owed to single creditor aggregating over $250 for luxury goods, or cash advances aggregating over $250 within 90 days of filing are non-dischargeable (833); $750 within 70 days (625). Automatic stay §136 §311 Excepts from the stay eviction actions by lessor against debtor involving residential real property where the underlying lease has terminated. In rem relief from stay §118 §303 Excepts from the stay actions to provide relief to a creditor secured by real property if the case involves a transfer of all or part ownership of real property, as part of scheme to delay or defraud. Debt incurred to pay non-dischargeable debts   §314 Excepts from discharge debts incurred within 70 days to pay non-dischargeable debts. Post-petition income of chapter 11 debtor   §321 Provides that such income will be deemed property of the estate in individual chapter 11 cases. Appellate procedure §612 N/A Direct appeal to the courts of appeal, with intermediate appeal to BAP if all parties consent (833 only).

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Footnotes

¹ As passed by the House on May 5, 1999. Return to article

² As pending in the Senate, July 1999. Return to article