Summary: H.R.6020 — 102nd Congress (1991-1992)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed House amended (10/03/1992)

Bankruptcy Amendments of 1992 - Title I: Improved Bankruptcy Administration - Amends Federal bankruptcy law to provide that the final hearing on a motion to lift an automatic stay must conclude within 30 days of the conclusion of the preliminary hearing on such motion, unless the 30 day period is extended with the consent of the parties in interest, or for a specific time which the court finds is required by compelling circumstances.

Limits a debtor's exclusive periods for filing a reorganization plan and soliciting acceptances to one year, and 425 days, respectively, unless the need for such an increase is attributable to circumstances for which the debtor should not justly be held accountable.

Permits the bankruptcy court to extend the filing period for a debt adjustment plan of a family farmer with regular annual income if the need for an extension is attributable to circumstances for which the debtor should not justly be held accountable.

Postpones from October 1, 1993, to October 1, 1995, the expiration date for Chapter 12 bankruptcy laws regarding family farmers.

States that the reaffirmation of a dischargeable debt is enforceable only if: (1) the reaffirmation agreement contains a clear and conspicuous statement advising the debtor that the agreement is not required under bankruptcy law, nonbankruptcy law; or a under any agreement not in accordance with bankruptcy law; and (2) the agreement is filed with the court, accompanied by a declaration that the debtor's attorney has fully advised the debtor of its legal consequences, and of any default under it.

Permits bankruptcy court judges to hold status conferences, and to issue case limitations and conditions at such conferences.

Amends the Federal judicial code to mandate that the judicial council of a circuit establish a bankruptcy appellate service composed of district bankruptcy judges in the circuit who are appointed by the council to hear appeals, subject to the consent of all parties (unless the judicial council finds that there are either insufficient judicial resources available in the circuit or the creation of such services would not likely improve the administration of justice). Sets forth appeals guidelines.

Amends the Bankruptcy Code to permit bankruptcy administrators (in States in which the bankruptcy system is administered by a Bankruptcy Administrator instead of a U.S. Trustee) to preside at meetings of creditors and equity security holders, and to examine the debtor at creditors' meetings.

Amends the Bankruptcy Code to include within the definition of "person" pension benefit guarantors, certain pension plans, and legal or beneficial owners of an asset of an eligible deferred compensation plan, or of a governmental employee pension benefit plan (thus enabling such persons, State pension funds and the Pension Benefit Guaranty Corporation to serve on creditors' committees).

Increases the incentive compensation guidelines for bankruptcy trustees.

Increases the dollar limitations and debt limits applicable to specified bankruptcy procedures (thus enlarging the range of debtors eligible to repay debts over a period from regular income Chapter 13 debtors, and accounting for inflation since 1978).

Amends the judicial code to prohibit bankruptcy fees revised by the Judicial Conference from taking effect until they have been reported to the Congress, and until the expiration of 180 days after they have been reported. Requires the Judicial Conference to report to certain congressional committees regarding the impact of waiving certain bankruptcy fees and costs for debtors who file a voluntary Chapter 11 reorganization case in forma pauperis.

Amends the Bankruptcy Code to: (1) extend from one to two years the period in which fraudulent transfers may be reviewed and voided by a bankruptcy trustee; and (2) conform its premerger notification provisions to the requirements for antitrust review of transactions under the Clayton Act.

Entitles members of Chapter 11 bankruptcy reorganization committees to reimbursement for actual and necessary expenses incurred in the performance of their duties.

Title II: Consumer Bankruptcy Issues - Permits a Chapter 13 debtor to cure a home mortgage default on its principal residence before its foreclosure sale.

Declares that senior mortage liens on a Chapter 13 debtor's principal residence may not be bifurcated to the extent they were not undersecured when they were originated.

Declares criminal fines non-dischargeable under a Chapter 13 proceeding.

Provides that a petition in bankruptcy does not operate as an automatic stay with respect to the continuation or commencement of an action or proceeding for: (1) the establishment of paternity; or (2) the establishment or modification of an order for child or spousal maintenance, or support.

Includes within the priority list of expenses and claims that are to be paid by the bankruptcy estate any claims for child or spousal support pursuant to a court order. Declares that a debtor in bankruptcy may not avoid a judicial lien that secures a debt for child and spousal support or maintenance. Prohibits a bankruptcy trustee from avoiding a transfer that was a bona fide payment of a debt for child or spousal support or maintenance pursuant to a court order.

Permits child support creditors to appear and intervene without charge, and without meeting any special local court requirement for attorney appearances, in any bankruptcy proceeding in any bankruptcy or district court upon filing a court form detailing the status of the child support debt.

Title III: Commercial Bankruptcy Issues - Declares that if a bankruptcy trustee avoids a transfer that was made between 90 days and one year before the filing of a petition in bankruptcy for the benefit of a creditor that at the time of the transfer was an insider, the trustee may not recover from a transferee that is not an insider (thus shielding a non-insider transferee from treatment as a corporate insider creditor).

Grants purchase-money security interest lenders a 20-day period in which to perfect their security interest (currently, ten days).

Provides that security interest agreement regarding property and rents, which was created before the commencement of a bankruptcy case and extended to properties likewise acquired before such commencement, also extends to rents acquired by the bankrupt estate after the commencement of the case (except to the extent that the court orders otherwise).

Amends Federal bankruptcy law to define "farmout agreement," and to articulate conditions under which any interests in liquid or gaseous hydrocarbons which have been transferred pursuant to such an agreement are excluded from a debtor's estate.

Extends from ten to 30 days the period in which a seller may make written demand upon an insolvent debtor to reclaim goods.

Presumes to be nondischargeable any consumer debts owed to a single creditor and aggregating more than $500 for "luxury goods or services" incurred by an individual debtor on or within 60 (currently 40) days before the order for relief.

Redefines debtor with respect to aircraft equipment and vessels to mean a U.S. citizen holding an operating certificate issued by the Secretary of Transportation for aircraft capble of carrying ten or more individuals.

Title IV: Governmental Bankruptcy Issues - Provides that the filing of a bankruptcy petition does not operate as an automatic stay of the creation, perfection,or enforcement of a statutory lien for an ad valorem property tax imposed by a governmental entity if such tax becomes due after the filing of a bankruptcy petition.

Modifies the eligibility requirements for municipal bankruptcy filings to require that municipalities be specifically authorized by the State to file for bankruptcy.

Title V: Technical Corrections - Makes technical and conforming corrections to the Bankruptcy Code.

Title VI: Effective Date; Application of Amendments - Sets forth the effective date of this Act. Makes it inapplicable to bankruptcy cases commenced before its enactment.