Comparison of the Bankruptcy Reform Act, H.R. 833, 106th Congress, Passed by the House and the Senate

Comparison of the Bankruptcy Reform Act, H.R. 833, 106th Congress, Passed by the House and the Senate

Order Code RL30454
CRS Report for Congress
Received through the CRS Web
Comparison of the Bankruptcy Reform Act,
H.R. 833, 106th 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,
H.R. 833, 106th 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 criminal
enforcement of drug laws.3
At this time, official House and Senate conferees have not been announced.
Whether the nongermane provisions will be stripped from the Senate bill or addressed
in a conference is the subject of speculation.4
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
148-150 (Feb. 10, 2000).

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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.
105-253, 105th Cong., 2d Sess. 22 (1998) to accompany S. 1301.
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.

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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.

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! 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.

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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 Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Means test, 11 U.S.C. § § 704, 707:
Implementation
Would amend 11 U.S.C. §
All parties may move for
707 to permit creditors, the
conversion to chapter 13,
trustee, or any party in
but the standing trustee
interest to challenge a
must review each filing and
debtor’s eligibility to file
move for conversion where
under chapter 7. If
abuse is found. § 102
indicated, the U.S. trustee
must file a statement that
the debtor’s case is a
presumed abuse of chapter
7. § 102.
Definition of “current
Income excludes Social
Excludes 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
o f t h e U . S . C o d e a s a m e n d e d b y t h e r e s p e c t i v e b i l l s , s e e
<[www.dpw.com/bankruptcyreform]>. Additional side-by-side comparisons are available
at the American Bankruptcy Institute’s website <[www.abiworld.org/legis]>.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Presumed abuse
Debtor presumed to be
Abuse exists if, by
abusing chapter 7 if current
calculating monthly
monthly income, excluding
income, excluding allowed
allowed deductions, secured
deductions, secured debt
debt payments, and priority
payments, and priority
unsecured debt payments,
unsecured debt payments,
multiplied by 60, would
and multiplying by 60
permit a debtor to pay the
months, there is a surplus
lesser of 25% of
of not less than $6,000 (or
nonpriority unsecured debt
$100 per month over 60
or $15,000 (or $250 per
months). § 102.
month over 60 months).
Calculation of permissible
Expenses to be calculated
Expenses to be calculated
monthly living expenses
“under standards issued by
as specified under the
the Internal Revenue
National Standards and
Service for the area in
Local Standards, and the
which the debtor resides.”
debtor’s actual monthly
expenses for the categories
Individualized expenses
specified as Other
may include charitable and
Necessary Expenses issued
religious contributions of
by the Internal Revenue
up to 15% of the debtor’s
Service for the area in
gross annual income; debts
which the debtor resides. A
incurred to protect the
debtor may also subtract an
debtor’s family from
allowance of up to 5% of
domestic violence; actual
the IRS food and clothing
expenses for the care and
categories.
support of nondependent,
elderly, ill or disabled
Individualized expenses
household or family
may include private school
members; and, arrearage
tuition of up to $10,000 per
payments to secured
year; charitable and
creditors necessary to
religious contributions of
maintain possession of the
up to 15% of the debtor’s
debtor’s home or motor
gross annual income,
vehicle.§ 102.
administrative expenses,
and reasonable attorneys
fees. § 102.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
To rebut the presumption
The debtor must
The debtor must
of abuse
demonstrate “special
demonstrate “extraordinary
circumstances.” § 102.
circumstances.” § 102.
Safe harbor exemption
The U.S. trustee or
No party may make a
from the means test
bankruptcy administrator
motion to convert the
may file a statement that a
debtor to chapter 13 if the
conversion motion would
debtor (and spouse
not be appropriate if the
combined) have a monthly
debtor’s current monthly
income “equal to or less
income is less than the
than the regional median
highest national or the
household income
applicable State median
calculated 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). §
102.
Attorney sanctions for
If a trustee moves to have a
If a panel trustee brings a
improper filing
debtor’s case converted and
successful motion for
the court approves it and
dismissal or conversion,
finds that the filing was
counsel for the debtor will
“frivolous,” counsel for the
be liable to reimburse the
debtor must reimburse the
trustee for costs, attorneys’
trustee for costs, including
fees, and payment of a civil
attorneys’ fees, and may be
penalty if the court finds a
required to pay a civil
violation of Bankruptcy
penalty. § 102.
Rule 9011. § 102.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Creditor sanctions for
The court may award the
The court may award the
improper motions
debtor costs for contesting
debtor costs in contesting
an unsuccessful motion to
an unsuccessful motion to
convert if the court finds
convert if the court finds
that the motion was not
that the motion was not
substantially justified, or
substantially justified, or
was intended to coerce the
was intended to coerce the
debtor into waiving rights
debtor into waiving rights
under the Bankruptcy
under the Bankruptcy
Code. A creditor whose
Code. § 102
claim is less than $1000 is
not liable for sanctions. §
102
Dismissal of filings by
A crime victim or party in
No comparable provision.
persons convicted of
interest may request
violent crimes or drug
dismissal of the voluntary
trafficking
bankruptcy case of the
convicted debtor. The
court must grant the
dismissal unless the filing is
necessary to satisfy a
domestic support
obligation. § 102
Mandatory credit
Debtor must undergo credit
Comparable provisions, but
counseling
counseling within 180 days
the debtor must undergo
of filing, and may not
credit counseling within 90
obtain a discharge until
days of filing. Debtors
completion of a personal
must also complete an
financial management
approved instructional
instructional course.
course.
The U.S. trustee or
The Federal Trade
bankruptcy administrator
Commission and the U.S.
for the judicial district is
trustee shall regulate and
directed to oversee and
approve credit counseling
approve nonprofit budget
agencies. § 302.
and credit counseling
agencies. § 106

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Audits
The Attorney General is
Comparable 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 alternative
Creditor’s allowable claim
The court may reduce a
dispute resolution
may be reduced by 20% if
creditor’s claim by 20% if
a court finds that the
the debtor can prove by
creditor “unreasonably
“clear and convincing”
refused to negotiate a
evidence that a creditor
reasonable alternative
unreasonably refused to
repayment schedule
negotiate alternative
proposed by an approved
repayment of at least 60%
credit counseling agency.”
of the debt. § 109.
§ 201.
Reaffirmation agreements
Imposes enhanced
Imposes enhanced
requirements for approval
requirements for approval
of a reaffirmation
of a reaffirmation
agreement when the debtor
agreement when the debtor
is not represented by
is not represented by
counsel; requires U.S.
counsel. § 108.
Attorney and FBI to
investigate abusive
Allows a debtor to recover
reaffirmation practices;
actual damages or $1000,
authorizes states attorney
whichever is greater, when
generals to bring class
a creditor violates
actions to recover damages
reaffirmation agreement
for violations of
requirements, but prohibits
reaffirmation provisions.
class actions to redress
§ 203.
abusive reaffirmation
practices by creditors.
§ 114.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Homestead exemption
Imposes a federal cap of
Imposes lengthened
$100,000 on exemptions
residency requirements.
under state law and
§§ 124-125.
lengthened residency
requirements. States are not
Imposes a $250,000 cap on
permitted to opt out of the
homestead 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. §
147.
Exemption for saving for
Subject to certain IRS
Allows a debtor, subject to
postsecondary education
requirements, excludes
certain requirements, to
funds up to $5000 made
exempt up to $50,000 for
within a year of filing in an
one child, or $100,000 per
education individual
family for postsecondary
retirement account; and/or
education. § 113.
funds used to purchase a
tuition credit or certificate
under a qualified state
tuition program. §225
Retirement Savings
Would clarify and expand
Comparable provision at
Exemption Broadened
the 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 for
Withheld wages for
No comparable provision.
Contributions to
contributions to employee
Employee Benefit Plans
benefit 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.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Domestic support owed to
Would move domestic
Comparable provision at
individuals and
support obligations to first
§ 139.
government units made
priority, which is currently
first priority
allocated to administrative
expenses of the bankruptcy
estate. Administrative
expenses would become
second priority. § 212.
Priority assigned to
A new § 507 tenth priority
Comparable provision at
claims for liability
is created for unsecured
§ 129.
incurred by the debtor
claims for liability incurred
DUI
by 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 of
Would direct the trustee to
Comparable provision at
child support claim
notify a priority child
§ 149.
holders
support recipient of the
existence of a state child
support enforcement
agency, and, upon
discharge, the existence of
nondischargeable and
reaffirmed debt. § 219.
Definition of “household
Defines household goods
Defines household goods
goods”
narrowly to include only 1
more broadly to include
radio; 1 television; 1 VCR;
“personal property
and 1 personal computer
normally found in or
but only if used for the
around a residence,”
education or entertainment
excluding motor vehicles.
of a minor child. § 313.
§ 145.
Plan duration
Debtors who have been
Chapter 13 plans to have 5
converted to chapter 13
year duration for families
from chapter 7 will have 5
whose monthly income is
year plans; other debtors
not 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.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Residential lease excepted
The automatic stay will not
Comparable provision at
from the automatic stay
operate 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. §
311.
Nondischargeable debts
Consumer debts presumed
Consumer debts owed to a
Consumer debts owed to a
fraudulent
single creditor for more
single creditor for more
than $250 for “luxury
than $250 for “luxury
goods” incurred within 90
goods” incurred within 90
days of filing; and cash
days of filing presumed to
advances for more than
be fraudulent. § 133
$750 under an open end
credit plan within 70 days
of filing are presumed to be
nondischargeable.
§ 310
Debts incurred to pay
Debts incurred with an
Comparable provision, but
nondischargeable debts
intent to pay a
all debts incurred within 90
are nondischargeable
nondischargeable debt will
days of filing to pay
become nondischargeable;
nondischargeable debts are
debts incurred within 70
nondischargeable without
days will be presumed to be
regard to intent. § 146.
nondischargeable. § 314.
Debts to government units
Defines “domestic support
Comparable provisions at
for domestic support
obligation” to include debts
§§ 138-139.
owed to or recoverable by a
governmental unit. §§ 211,
215.
Expanded definition of
Adds qualified educational
Comparable provision at
student loan
loans as defined under §
§ 281.
221 of the IRS to those
educational loans that are
currently nondischargeable.
§ 220.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Expanded definition of
Expands the types of post-
Comparable provision at
nondischargeable
petition condo and
§ 214.
condominium and
homeowners association
homeowners association
fees that are
fees
nondischargeable by
omitting requirement that in
order to be
nondischargeable the debtor
must reside in it
postpetition.
§ 414.
Debts incurred through the
Any debt that results from
No comparable provision.
commission of violence at
any judgment entered in a
health care facilities,
state or federal court for
including abortion clinics
damages to a clinic or
violation of the civil rights
of individuals providing or
obtaining reproductive
health care services would
be nondischargeable. § 328.
Loan repayments to
Makes nondischargeable,
Comparable provision at
debtor’s retirement
i.e., allows an employer to
§ 203.
savings or thrift plan
withhold from debtor’s
wages loan repayments to
debtor’s savings/retirement
plan. § 224.

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Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Lien stripping on security
Chapter 13 debtors would
Consumer debtors would
interests in consumer
not be permitted to
not be permitted to
goods (cramdown)
bifurcate security interests
bifurcate secured claims for
in an automobile purchased
consumer goods purchased
within 5 years of the filing;
within 5 years of the
or in other consumer goods
bankruptcy filing. A
purchased within 6-months
secured 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 Truth
TILA amended to require
TILA amended to require
in Lending Act
enhanced minimum
enhanced minimum
payment disclosures under
payment disclosures under
an open end credit plan;
an open end credit plan;
enhanced disclosures
disclosures related to
regarding the tax
introductory “teaser” rates;
deductibility of credit
and, disclosures related to
extensions which exceed
Internet-based open end
the fair market value of a
credit 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-
1906.

CRS-15
Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Consumer credit studies
The Board of Governors of
The Board of Governors of
the Federal Reserve would
the Federal Reserve would
be directed to study existing
be directed to study
protections for consumers
existing protections for
for unauthorized use of a
consumers for unauthorized
dual use debit card. § 1907
use 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.

CRS-16
Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
Study of bankruptcy impact
Comptroller General
Comparable provision at
of credit extended to
directed to study
§ 609.
dependent students
bankruptcy impact of credit
extensions to students in
postsecondary school. §
1908.
Business Bankruptcy
Small business bankruptcy
Subtitle B of Title IV has
Title IV of the bill deals
provisions defining a
with “small business”
“small business” for
chapter 11 filings. A small
chapter 11 purposes as one
business is defined as one
with debts under
with debts of under
$3,000,000. The debtor’s
$4,000,000. The debtor’s
period of exclusivity to file
period of exclusivity to file
a reorganization plan is 180
a reorganization plan is 90
days. A plan must be
days. A plan must be
confirmed within 175 days.
confirmed within 150 days.
Provisions require
Provisions require
establishment of uniform
establishment of uniform
accounting and reporting
accounting and reporting
standards for small
standards for small
businesses. Grounds for
businesses. Grounds for
appointment of a trustee
appointment of a trustee
and the trustee’s general
and the trustee’s general
supervisory duties are
supervisory duties are
expanded, as are grounds
expanded, as are grounds
for dismissal or conversion
for dismissal or conversion
of the case. §§ 431-442.
of the case. §§ 401-413.
Venue for chapter 11
No comparable provision
Venue 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 filings
Directs the Judicial
Comparable provision that
Conference to prescribe
gives courts broader
procedures for waiving
discretion to waive
bankruptcy fees for an
bankruptcy fees for an
individual debtor under
individual in chapter 7 who
chapter 7 whose income is
cannot pay in installments.
less than 125 percent of the
§ 148.
income official poverty line
and who is unable to pay
the fee in installments. §
420.

CRS-17
Selected Provisions
H.R. 833 (S. 625) as
H.R. 833 as passed by
passed by the Senate
the House
General effective date
Subject to express
Comparable 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 judgeships
Creates new temporary
Comparable provision at
bankruptcy judgeships for
§ 128.
designated districts. §
1425.