Section 524(a) of the House amendment represents a compromise between the House bill and the Senate amendment. Section 524(b) of the House amendment is new, and represents standards clarifying the operation of section 524(a)(3) with respect to community property.
Sections 524(c) and (d) represent a compromise between the House bill and Senate amendment on the issue of reaffirmation of a debt discharged in bankruptcy. Every reaffirmation to be enforceable must be approved by the court, and any debtor may rescind a reaffirmation for 30 days from the time the reaffirmation becomes enforceable. If the debtor is an individual the court must advise the debtor of various effects of reaffirmation at a hearing. In addition, to any extent the debt is a consumer debt that is not secured by real property of the debtor reaffirmation is permitted only if the court approves the reaffirmation agreement, before granting a discharge under section 727, 1141, or 1328, as not imposing a hardship on the debtor or a dependent of the debtor and in the best interest of the debtor; alternatively, the court may approve an agreement entered into in good faith that is in settlement of litigation of a complaint to determine dischargeability or that is entered into in connection with redemption under section 722. The hearing on discharge under section 524(d) will be held whether or not the debtor desires to reaffirm any debts.
Subsection (a) specifies that a discharge in a bankruptcy case voids any judgment to the extent that it is a determination of the personal liability of the debtor with respect to a prepetition debt, and operates as an injunction against the commencement or continuation of an action, the employment of process, or any act, including telephone calls, letters, and personal contacts, to collect, recover, or offset any discharged debt as a personal liability of the debtor, or from property of the debtor, whether or not the debtor has waived discharge of the debt involved. The injunction is to give complete effect to the discharge and to eliminate any doubt concerning the effect of the discharge as a total prohibition on debt collection efforts. This paragraph has been expanded over a comparable provision in Bankruptcy Act § 14f [section 32(f) of former title 11] to cover any act to collect, such as dunning by telephone or letter, or indirectly through friends, relatives, or employers, harassment, threats of repossession, and the like. The change is consonant with the new policy forbidding binding reaffirmation agreements under proposed 11 U.S.C. 524(b), and is intended to insure that once a debt is discharged, the debtor will not be pressured in any way to repay it. In effect, the discharge extinguishes the debt, and creditors may not attempt to avoid that. The language “whether or not discharge of such debt is waived” is intended to prevent waiver of discharge of a particular debt from defeating the purposes of this section. It is directed at waiver of discharge of a particular debt, not waiver of discharge in toto as permitted under section 727(a)(9).
Subsection (a) also codifies the split discharge for debtors in community property states. If community property was in the estate and community claims were discharged, the discharge is effective against community creditors of the nondebtor spouse as well as of the debtor spouse.
Subsection (b) gives further effect to the discharge. It prohibits reaffirmation agreements after the commencement of the case with respect to any dischargeable debt. The prohibition extends to agreements the consideration for which in whole or in part is based on a dischargeable debt, and it applies whether or not discharge of the debt involved in the agreement has been waived. Thus, the prohibition on reaffirmation agreements extends to debts that are based on discharged debts. Thus, “second generation” debts, which included all or a part of a discharged debt could not be included in any new agreement for new money. This subsection will not have any effect on reaffirmations of debts discharged under the Bankruptcy Act [former title 11]. It will only apply to discharges granted if commenced under the new title 11 bankruptcy code.
Subsection (c) grants an exception to the anti-reaffirmation provision. It permits reaffirmation in connection with the settlement of a proceeding to determine the dischargeability of the debt being reaffirmed, or in connection with a redemption agreement permitted under section 722. In either case, the reaffirmation agreement must be entered into in good faith and must be approved by the court.
Subsection (d) provides the discharge of the debtor does not affect co-debtors or guarantors.
The Bankruptcy Act, referred to in subsec. (b)(1), is act July 1, 1898, ch. 541, 30 Stat. 544, which was classified generally to former Title 11.
The date of the enactment of this subsection, referred to in subsec. (g)(7), is the date of enactment of Pub. L. 103–394, which enacted subsec. (g) and was approved
The date of the enactment of this Act, referred to in subsec. (h), probably means the date of enactment of Pub. L. 103–394, which enacted subsec. (h) and was approved
The Truth in Lending Act, referred to in subsec. (k), is title I of Pub. L. 90–321,
Section 19(b)(1)(A)(iv) of the Federal Reserve Act, referred to in subsecs. (k)(6)(B) and (m)(2), is classified to section 461(b)(1)(A)(iv) of Title 12, Banks and Banking.
2019—Subsec. (a)(1). Pub. L. 116–54, § 4(a)(9)(A)(i), inserted “1192,” after “1141,”.
Subsec. (a)(3). Pub. L. 116–54, § 4(a)(9)(A)(ii), inserted “1192,” after “523,”.
Subsec. (c)(1). Pub. L. 116–54, § 4(a)(9)(B), inserted “1192,” after “1141,”.
Subsec. (d). Pub. L. 116–54, § 4(a)(9)(C), inserted “1192,” after “1141,” in introductory provisions.
2010—Subsec. (k)(3)(J)(i). Pub. L. 111–327, § 2(a)(19)(A), in last undesignated par., substituted “property securing the lien” for “security property” and “amount of the allowed secured claim” for “current value of the security property” and inserted “must” before “make a single payment”.
Subsec. (k)(5)(B). Pub. L. 111–327, § 2(a)(19)(B), substituted “that,” for “that”.
2005—Subsec. (a)(3). Pub. L. 109–8, § 1210, substituted “section 523, 1228(a)(1), or 1328(a)(1), or that” for “section 523, 1228(a)(1), or 1328(a)(1) of this title, or that”.
Subsec. (c)(2). Pub. L. 109–8, § 203(a)(1), added par. (2) and struck out former par. (2) which read as follows:
“(2)(A) such agreement contains a clear and conspicuous statement which advises the debtor that the agreement may be rescinded at any time prior to discharge or within sixty days after such agreement is filed with the court, whichever occurs later, by giving notice of rescission to the holder of such claim; and
“(B) such agreement contains a clear and conspicuous statement which advises the debtor that such agreement is not required under this title, under nonbankruptcy law, or under any agreement not in accordance with the provisions of this subsection;”.
Subsecs. (i), (j). Pub. L. 109–8, § 202, added subsecs. (i) and (j).
Subsecs. (k) to (m). Pub. L. 109–8, § 203(a)(2), added subsecs. (k) to (m).
1994—Subsec. (a)(3). Pub. L. 103–394, § 501(d)(14)(A), substituted “1328(a)(1)” for “1328(c)(1)”. See 1986 Amendment note below.
Subsec. (c)(2). Pub. L. 103–394, § 103(a)(1), designated existing provisions as subpar. (A), inserted “and” at end, and added subpar. (B).
Subsec. (c)(3). Pub. L. 103–394, § 103(a)(2), struck out “such agreement” after “which states that” in introductory provisions, struck out “and” at end of subpar. (A), inserted “such agreement” in subpars. (A) and (B), and added subpar. (C).
Subsec. (c)(4). Pub. L. 103–394, § 501(d)(14)(B), substituted “rescission” for “recission”.
Subsec. (d). Pub. L. 103–394, § 103(b), inserted “and was not represented by an attorney during the course of negotiating such agreement” after “this section” in introductory provisions.
Subsec. (d)(1)(B)(ii). Pub. L. 103–394, § 501(d)(14)(C), inserted “and” at end.
Subsecs. (g), (h). Pub. L. 103–394, § 111(a), added subsecs. (g) and (h).
1986—Subsec. (a)(1). Pub. L. 99–554, § 257(o)(1), inserted reference to section 1228 of this title.
Subsec. (a)(3). Pub. L. 99–554, § 257(o)(2), which directed the substitution of “, 1228(a)(1), or 1328(a)(1)” for “or 1328(a)(1)” was executed by making the substitution for “or 1328(c)(1)” to reflect the probable intent of Congress. See 1994 Amendment note above.
Subsec. (c)(1). Pub. L. 99–554, § 257(o)(1), inserted reference to section 1228 of this title.
Subsec. (d). Pub. L. 99–554, § 257(o)(1), inserted reference to section 1228 of this title.
Pub. L. 99–554, § 282, substituted “shall” for “may” before “hold” in first sentence, inserted “any” after “At” in second sentence, and inserted “the court shall hold a hearing at which the debtor shall appear in person and” after “then” in third sentence.
Subsec. (d)(2). Pub. L. 99–554, § 283(k), substituted “section” for “subsection” after “subsection (c)(6) of this”.
1984—Subsec. (a)(2). Pub. L. 98–353, §§ 308(a), 455, struck out “or from property of the debtor,” before “whether or not discharge”, and substituted “an act” for “any act”.
Subsec. (a)(3). Pub. L. 98–353, § 455, substituted “an act” for “any act”.
Subsec. (c)(2). Pub. L. 98–353, § 308(b)(1), (3), added par. (2). Former par. (2), which related to situations where the debtor had not rescinded the agreement within 30 days after the agreement became enforceable, was struck out.
Subsec. (c)(3), (4). Pub. L. 98–352, § 308(b)(3), added pars. (3) and (4). Former pars. (3) and (4) redesignated (5) and (6), respectively.
Subsec. (c)(5). Pub. L. 98–353, § 308(b)(2), redesignated former par. (3) as (5).
Subsec. (c)(6). Pub. L. 98–353, § 308(b)(2), (4), redesignated former par. (4) as (6) and generally amended par. (6), as so redesignated, thereby striking out provisions relating to court approval of such agreements as are entered into in good faith and are in settlement of litigation under section 523 of this title or provide for redemption under section 722 of this title.
Subsec. (d)(2). Pub. L. 98–353, § 308(c), substituted “subsection (c)(6)” for “subsection (c)(4)”.
Subsec. (f). Pub. L. 98–353, § 308(d), added subsec. (f).
Amendment by Pub. L. 116–54 effective 180 days after
Amendment by Pub. L. 109–8 effective 180 days after
Amendment by Pub. L. 103–394 effective
Amendment by section 257 of Pub. L. 99–554 effective 30 days after
Amendment by sections 282 and 283 of Pub. L. 99–554 effective 30 days after
Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after
Pub. L. 103–394, title I, § 111(b),