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United States · Law · HR

H.R. 5116 (103rd)

Bankruptcy Reform Act of 1994

enactedUnited States· United States Congress· EN

Introduced

28 September 1994

Last action

—

Status

Became Public Law No: 103-394.

Sponsors

—

Subjects

Discovery layer

Source updated

25 September 2021

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Summary

TABLE OF CONTENTS: Title I: Improved Bankruptcy Administration Title II: Commercial Bankruptcy Issues Title III: Consumer Bankruptcy Issues Title IV: Governmental Bankruptcy Issues Title V: Technical Corrections Title VI: Severability; Effective Date; Application of Amendments Bankruptcy Reform Act of 1994 - Title I: Improved Bankruptcy Administration - Amends Federal bankruptcy law to allow, with the consent of the parties in interest, an extension of the 30 day period following conclusion of a preliminary hearing on a motion to lift an automatic stay, by the end of which a final hearing must be concluded. (Sec. 102) Amends the judicial code to mandate the jurisdiction of a Federal district court to hear appeals from interlocutory orders and decrees of bankruptcy judges increasing certain time periods for filing a bankruptcy plan. (Currently, a district court has discretion to hear such appeals by its leave only.) (Sec. 103) Revises expedited procedures for reaffirmation of debts. (Sec. 104) Permits bankruptcy court judges to hold status conferences and to issue case limitations and conditions at such conferences. Amends the Federal judicial code to change from discretionary to mandatory the authority of the judicial council of a circuit to establish a bankruptcy appellate panel service. Prescribes circumstances for the termination of a bankruptcy appellate panel. Revises appeals guidelines. (Sec. 105) Permits bankruptcy administrators (in a State 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. (Sec. 106) Amends the Bankruptcy Code to include within the definition of "person" pension benefit guarantors 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). (Sec. 107) Revises current guidelines to permit increases in incentive compensation for bankruptcy trustees. (Sec. 108) 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). (Sec. 109) Revises premerger notification requirements. (Sec. 110) Entitles members of Chapter 11 bankruptcy reorganization committees to reimbursement for actual and necessary expenses. (Sec. 111) Prescribes guidelines for supplemental injunctions issued to enjoin entities from taking legal action to receive payment with respect to any claim that under a reorganization plan is to be paid by a specified trust established to assume the debtor's liability for asbestos-related damages. (Sec. 112) Amends the judicial code to authorize bankruptcy court judges to conduct jury trials in civil proceedings under specified circumstances. (Sec. 113) Provides for a waiver of State and Federal sovereign immunity with respect to monetary recoveries and declaratory or injunctive relief under the Bankruptcy Code. Title II: Commercial Bankruptcy Issues - Amends Federal bankruptcy law to revise provisions regarding the right of a party with a security interest in certain aircraft equipment, maritime vessels, or railroad rolling stock equipment to take possession of such equipment or vessels in compliance with an equipment security agreement notwithstanding the automatic stay or property use or sale provisions of the bankruptcy code or injunctive power of the bankruptcy court, unless the trustee assumes the debtor's obligations under the agreement by a specified deadline and any default is cured. (Sec. 202) Sets forth or revises guidelines governing: (1) liability limitations with respect to noninsider transferees for avoided transfers; (2) maintenance and continued perfection of a secured creditor's position; (3) rejection of unexpired leases of real property or timeshare interests; (4) inclusion of the claims of independent sales representatives within priority claims against the bankrupt estate; (5) exclusion from the bankrupt estate of the debtor's interest in liquid or gaseous hydrocarbons; (6) a seller's right to reclaim goods from a bankrupt debtor; (7) election of a disinterested trustee; (8) rights of the partnership trustee against the general partners; (9) exclusion from the debtor's estate of certain accounts receivable and chattel paper; (10) timely filing of claims, interests, and administrative expense requests; (11) the protection of security interests in post-petition rents; and (12) spot foreign exchange contracts. Title III: Consumer Bankruptcy Issues - Permits a Chapter 13 debtor to cure a lien arising from a home mortgage default with respect to his or her principal residence until the residence is sold under the lien. (Sec. 302) Declares certain criminal fines nondischargeable under a Chapter 13 proceeding. (Sec. 303) Amends Federal bankruptcy law to modify the guidelines under which a lien shall be considered to impair an exemption. (Sec. 304) Provides that a petition in bankruptcy does not operate as an automatic stay with respect to 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 bankrupt 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 securing 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 the filing of a court form detailing the status of the child support debt. (Sec. 305) States that: (1) the rights of the mortgagee on the debtor's principal residence may not be modified; and (2) the rights of the most senior mortgagee on the debtor's principal residence may not be modified to reduce the secured claim to a value that is less than that of the allowed claim. (Sec. 306) Revises the guidelines regarding the debtor's cure of a default to limit a secured creditor to the benefit of the initial underlying agreement, including applicable nonbankruptcy law. (Sec. 307) Modifies the guidelines governing the presumed nondischargeability of certain consumer debts. 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. (Sec. 402) 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 and the Federal Deposit Insurance Act. Amends the judicial code to require a U.S. trustee to supervise the administration of cases and trustees in cases under Chapter 12 of the Bankruptcy Code. Title VI: Severability; Effective Date; Application of Amendments - Sets forth severability provisions and the effective date of this Act. Makes it inapplicable to certain cases commenced before its enactment.

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