Summary: H.R.3146 — 105th Congress (1997-1998)All Information (Except Text)

There is one summary for H.R.3146. Bill summaries are authored by CRS.

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Introduced in House (02/03/1998)

Consumer Lenders and Borrowers Bankruptcy Accountability Act of 1998 - Amends Federal bankruptcy law to expand the list of creditors' claims, both unsecured and secured, that the court shall disallow upon objection by a party in interest where the creditor has performed or failed to perform specified actions. Requires creditors to establish by clear and convincing evidence the debtor's use of false statements in the credit application or the creditor's actual and reasonable reliance on an express fraudulent statement by the debtor in order for certain consumer debts under an open end credit plan to be determined nondischargeable.

(Sec. 3) Modifies bankruptcy trustee avoidance powers to: (1) provide that transfer of an individual debtor's right to receive income is not effective until the time it is to be paid to the debtor; and (2) preclude a bankruptcy trustee from avoiding a voluntary transfer of property whose aggregate amount is less than $600.

(Sec. 4) Mandates sanctions for certain creditor abuses of the bankruptcy system, including the award of reasonable attorney's fees and punitive and actual damages.

(Sec. 5) Requires a consumer debtor to file, contemporaneously with the filing of the bankruptcy petition, a written acknowledgment of receipt of an official explanation of bankruptcy options and alternatives, including relief provided by private credit counseling agencies.

(Sec. 6) Amends the Fair Credit Reporting Act to prohibit a consumer report from containing information pertaining to certain: (1) chapter 7 (Liquidation) cases and non-discharged chapter 12 (Adjustment of Debts of a Family Farmer With Regular Income) and chapter 13 (Adjustment of Debts of an Individual With Regular Income) cases whose disposition antedates the report by more than ten years (currently applicable only to chapter 11 (Reorganization) cases); and (2) discharged chapter 12 or 13 cases whose disposition antedates the report by more than five years.

Amends the bankruptcy code to revise procedural guidelines governing a Chapter 13 debtor.

(Sec. 7) Modifies bankruptcy exemption guidelines to deny such an exemption in excess of $100,000 for certain property converted by an insolvent debtor into a form of property that is otherwise exempt in an unlimited amount.

(Sec. 8) Revises criteria for dismissal of an individual debtor's petition in bankruptcy to authorize the court to dismiss if it finds that granting relief would be an abuse of Chapter 7, as defined. (Currently, substantial abuse is required.) Precludes a finding of abuse if the debtor's household income does not exceed $60,000, adjusted upward by $5,000 for each household member exceeding four.

(Sec. 9) Cites circumstances under which the bankruptcy court may terminate the automatic stay against debtor's creditors if the debtor has previously filed petitions within a specified time-frame.

Modifies guidelines governing nonattorney bankruptcy petition preparers to mandate that as a prerequisite to any collection of fees for services: (1) such preparers officially disclose to debtors that they cannot practice law or give legal advice; and (2) such disclosure be signed by the debtor and filed with the requisite court documents.

(Sec. 10) Denies a discharge in bankruptcy: (1) to a debtor that has intentionally omitted property from the bankruptcy schedule of assets; (2) if such omission was material; and (3) if the debtor would not have been entitled to fully exempt such property had it been timely listed in such schedule.

(Sec. 11) Revises guidelines concerning debt adjustment plans for individuals with regular income to exclude the satisfaction of any penalty rate from the determination of the amount necessary to cure a default (thus restricting interest on interest). Mandates confirmation of a plan that: (1) provides that the claim holder retain the lien securing an allowed secured claim until the claim is paid; and (2) specifies the interest rate to be paid to an allowed secured claim holder for deferred payments.

(Sec. 12) Revises lien avoidance guidelines affecting debtor's property that is exempt from the bankruptcy estate. Voids any lien on the debtor's interest in any personal or household item unless the lienholder timely files a sworn declaration that the item's purchase price exceeded $1,500. Permits a debtor to void an unenforceable tax lien. Provides that, in a proceeding under Chapter 7 or Chapter 13, a rent-to-own contract enjoys the same status as a purchase contract.

Modifies Chapter 13 guidelines to declare that confirmation of a plan renders the property of the estate and the debtor, whether or not revested in the debtor, free and clear of any lien held by a holder of a secured claim with notice of the case that has not filed a timely proof of claim and served that proof on the debtor and the debtor's attorney. States that such a lien duly perfected before the petition date, and secured by a claim on which the last payment is due after the due date of the final plan payment, may be so affected only to the extent the plan proposes to cure any default.

Permits the court to approve payment of allowed secured claims over a period that exceeds the current statutory limit of five years.

(Sec. 13) Modifies the exceptions to a discharge in bankruptcy to: (1) repeal the proscription against discharge of a debt incurred to pay a nondischargeable Federal tax; and (2) prohibit discharge of a filing fee imposed by any court upon a prisoner.

Exempts retirement funds from the estate in bankruptcy to the extent that such funds are exempt from taxation in the Tax Code.

Redefines "utility" for purposes of utility service provided to a party in bankruptcy to include any provider of gas, electric, telephone, telecommunication, cable television, satellite communication, water, or sewer service, whether or not such service is a regulated monopoly.