Notes on 11 U.S.C. § 523 : US Code - Notes

Search Notes on 11 U.S.C. § 523 : US Code - Notes

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2590; Pub. L. 96-56, Sec.
3, Aug. 14, 1979, 93 Stat. 387; Pub. L. 97-35, title XXIII, Sec.
2334(b), Aug. 13, 1981, 95 Stat. 863; Pub. L. 98-353, title III,
Secs. 307, 371, 454, July 10, 1984, 98 Stat. 353, 364, 375; Pub. L.
99-554, title II, Secs. 257(n), 281, 283(j), Oct. 27, 1986, 100
Stat. 3115-3117; Pub. L. 101-581, Sec. 2(a), Nov. 15, 1990, 104
Stat. 2865; Pub. L. 101-647, title XXV, Sec. 2522(a), title XXXI,
Sec. 3102(a), title XXXVI, Sec. 3621, Nov. 29, 1990, 104 Stat.
4865, 4916, 4964; Pub. L. 103-322, title XXXII, Sec. 320934, Sept.
13, 1994, 108 Stat. 2135; Pub. L. 103-394, title II, Sec. 221,
title III, Secs. 304(e), (h)(3), 306, 309, title V, Sec.
501(d)(13), Oct. 22, 1994, 108 Stat. 4129, 4133-4135, 4137, 4145;
Pub. L. 104-134, title I, Sec. 101[(a)] [title VIII, Sec. 804(b)],
Apr. 26, 1996, 110 Stat. 1321, 1321-74; renumbered title I, Pub. L.
104-140, Sec. 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 104-193,
title III, Sec. 374(a), Aug. 22, 1996, 110 Stat. 2255; Pub. L. 105-
244, title IX, Sec. 971(a), Oct. 7, 1998, 112 Stat. 1837; Pub. L.
107-204, title VIII, Sec. 803, July 30, 2002, 116 Stat. 801; Pub.
L. 109-8, title II, Secs. 215, 220, 224(c), title III, Secs. 301,
310, 314(a), title IV, Sec. 412, title VII, Sec. 714, title XII,
Secs. 1209, 1235, title XIV, Sec. 1404(a), title XV, Sec.
1502(a)(2), Apr. 20, 2005, 119 Stat. 54, 59, 64, 75, 84, 88, 107,
128, 194, 204, 215, 216.)
HISTORICAL AND REVISION NOTES
LEGISLATIVE STATEMENTS
Section 523(a)(1) represents a compromise between the position
taken in the House bill and the Senate amendment. Section 523(a)(2)
likewise represents a compromise between the position taken in the
House bill and the Senate amendment with respect to the false
financial statement exception to discharge. In order to clarify
that a "renewal of credit" includes a "refinancing of credit",
explicit reference to a refinancing of credit is made in the
preamble to section 523(a)(2). A renewal of credit or refinancing
of credit that was obtained by a false financial statement within
the terms of section 523(a)(2) is nondischargeable. However, each
of the provisions of section 523(a)(2) must be proved. Thus, under
section 523(a)(2)(A) a creditor must prove that the debt was
obtained by false pretenses, a false representation, or actual
fraud, other than a statement respecting the debtor's or an
insider's financial condition. Subparagraph (A) is intended to
codify current case law e.g., Neal v. Clark, 95 U.S. 704 (1887) [24
L. Ed. 586], which interprets "fraud" to mean actual or positive
fraud rather than fraud implied in law. Subparagraph (A) is
mutually exclusive from subparagraph (B). Subparagraph (B) pertains
to the so-called false financial statement. In order for the debt
to be nondischargeable, the creditor must prove that the debt was
obtained by the use of a statement in writing (i) that is
materially false; (ii) respecting the debtor's or an insider's
financial condition; (iii) on which the creditor to whom the debtor
is liable for obtaining money, property, services, or credit
reasonably relied; (iv) that the debtor caused to be made or
published with intent to deceive. Section 523(a)(2)(B)(iv) is not
intended to change from present law since the statement that the
debtor causes to be made or published with the intent to deceive
automatically includes a statement that the debtor actually makes
or publishes with an intent to deceive. Section 523(a)(2)(B) is
explained in the House report. Under section 523(a)(2)(B)(i) a
discharge is barred only as to that portion of a loan with respect
to which a false financial statement is materially false.
In many cases, a creditor is required by state law to refinance
existing credit on which there has been no default. If the creditor
does not forfeit remedies or otherwise rely to his detriment on a
false financial statement with respect to existing credit, then an
extension, renewal, or refinancing of such credit is
nondischargeable only to the extent of the new money advanced; on
the other hand, if an existing loan is in default or the creditor
otherwise reasonably relies to his detriment on a false financial
statement with regard to an existing loan, then the entire debt is
nondischargeable under section 523(a)(2)(B). This codifies the
reasoning expressed by the second circuit in In re Danns, 558 F.2d
114 (2d Cir. 1977).
Section 523(a)(3) of the House amendment is derived from the
Senate amendment. The provision is intended to overrule Birkett v.
Columbia Bank, 195 U.S. 345 (1904) [25 S.Ct. 38, 49 L.Ed. 231, 12
Am.Bankr.Rep. 691].
Section 523(a)(4) of the House amendment represents a compromise
between the House bill and the Senate amendment.
Section 523(a)(5) is a compromise between the House bill and the
Senate amendment. The provision excepts from discharge a debt owed
to a spouse, former spouse or child of the debtor, in connection
with a separation agreement, divorce decree, or property settlement
agreement, for alimony to, maintenance for, or support of such
spouse or child but not to the extent that the debt is assigned to
another entity. If the debtor has assumed an obligation of the
debtor's spouse to a third party in connection with a separation
agreement, property settlement agreement, or divorce proceeding,
such debt is dischargeable to the extent that payment of the debt
by the debtor is not actually in the nature of alimony,
maintenance, or support of debtor's spouse, former spouse, or
child.
Section 523(a)(6) adopts the position taken in the House bill and
rejects the alternative suggested in the Senate amendment. The
phrase "willful and malicious injury" covers a willful and
malicious conversion.
Section 523(a)(7) of the House amendment adopts the position
taken in the Senate amendment and rejects the position taken in the
House bill. A penalty relating to a tax cannot be nondischargeable
unless the tax itself is nondischargeable.
Section 523(a)(8) represents a compromise between the House bill
and the Senate amendment regarding educational loans. This
provision is broader than current law which is limited to federally
insured loans. Only educational loans owing to a governmental unit
or a nonprofit institution of higher education are made
nondischargeable under this paragraph.
Section 523(b) is new. The section represents a modification of
similar provisions contained in the House bill and the Senate
amendment.
Section 523(c) of the House amendment adopts the position taken
in the Senate amendment.
Section 523(d) represents a compromise between the position taken
in the House bill and the Senate amendment on the issue of
attorneys' fees in false financial statement complaints to
determine dischargeability. The provision contained in the House
bill permitting the court to award damages is eliminated. The court
must grant the debtor judgment or a reasonable attorneys' fee
unless the granting of judgment would be clearly inequitable.
Nondischargeable debts: The House amendment retains the basic
categories of nondischargeable tax liabilities contained in both
bills, but restricts the time limits on certain nondischargeable
taxes. Under the amendment, nondischargeable taxes cover taxes
entitled to priority under section 507(a)(6) of title 11 and, in
the case of individual debtors under chapters 7, 11, or 13, tax
liabilities with respect to which no required return had been filed
or as to which a late return had been filed if the return became
last due, including extensions, within 2 years before the date of
the petition or became due after the petition or as to which the
debtor made a fraudulent return, entry or invoice or fraudulently
attempted to evade or defeat the tax.
In the case of individuals in liquidation under chapter 7 or in
reorganization under chapter 11 of title 11, section 1141(d)(2)
incorporates by reference the exceptions to discharge continued in
section 523. Different rules concerning the discharge of taxes
where a partnership or corporation reorganizes under chapter 11,
apply under section 1141.
The House amendment also deletes the reduction rule contained in
section 523(e) of the Senate amendment. Under that rule, the amount
of an otherwise nondischargeable tax liability would be reduced by
the amount which a governmental tax authority could have collected
from the debtor's estate if it had filed a timely claim against the
estate but which it did not collect because no such claim was
filed. This provision is deleted in order not to effectively compel
a tax authority to file claim against the estate in "no asset"
cases, along with a dischargeability petition. In no-asset cases,
therefore, if the tax authority is not potentially penalized by
failing to file a claim, the debtor in such cases will have a
better opportunity to choose the prepayment forum, bankruptcy court
or the Tax Court, in which to litigate his personal liability for a
nondischargeable tax.
The House amendment also adopts the Senate amendment provision
limiting the nondischargeability of punitive tax penalties, that
is, penalties other than those which represent collection of a
principal amount of tax liability through the form of a "penalty."
Under the House amendment, tax penalties which are basically
punitive in nature are to be nondischargeable only if the penalty
is computed by reference to a related tax liability which is
nondischargeable or, if the amount of the penalty is not computed
by reference to a tax liability, the transaction or event giving
rise to the penalty occurred during the 3-year period ending on the
date of the petition.
SENATE REPORT NO. 95-989
This section specifies which of the debtor's debts are not
discharged in a bankruptcy case, and certain procedures for
effectuating the section. The provision in Bankruptcy Act Sec. 17c
[section 35(c) of former title 11] granting the bankruptcy courts
jurisdiction to determine dischargeability is deleted as
unnecessary, in view of the comprehensive grant of jurisdiction
prescribed in proposed 28 U.S.C. 1334(b), which is adequate to
cover the full jurisdiction that the bankruptcy courts have today
over dischargeability and related issues under Bankruptcy Act Sec.
17c. The Rules of Bankruptcy Procedure will specify, as they do
today, who may request determinations of dischargeability, subject,
of course, to proposed 11 U.S.C. 523(c), and when such a request
may be made. Proposed 11 U.S.C. 350, providing for reopening of
cases, provides one possible procedure for a determination of
dischargeability and related issues after a case is closed.
Subsection (a) lists nine kinds of debts excepted from discharge.
Taxes that are excepted from discharge are set forth in paragraph
(1). These include claims against the debtor which receive priority
in the second, third and sixth categories (Sec. 507(a)(3)(B) and
(c) and (6)). These categories include taxes for which the tax
authority failed to file a claim against the estate or filed its
claim late. Whether or not the taxing authority's claim is secured
will also not affect the claim's nondischargeability if the tax
liability in question is otherwise entitled to priority.
Also included in the nondischargeable debts are taxes for which
the debtor had not filed a required return as of the petition date,
or for which a return had been filed beyond its last permitted due
date (Sec. 523(a)(1)(B)). For this purpose, the date of the tax
year to which the return relates is immaterial. The late return
rule applies, however, only to the late returns filed within three
years before the petition was filed, and to late returns filed
after the petition in title 11 was filed. For this purpose, the
taxable year in question need not be one or more of the three years
immediately preceding the filing of the petition.
Tax claims with respect to which the debtor filed a fraudulent
return, entry or invoice, or fraudulently attempted to evade or
defeat any tax (Sec. 523(a)(1)(C)) are included. The date of the
taxable year with regard to which the fraud occurred is immaterial.
Also included are tax payments due under an agreement for
deferred payment of taxes, which a debtor had entered into with the
Internal Revenue Service (or State or local tax authority) before
the filing of the petition and which relate to a prepetition tax
liability (Sec. 523(a)(1)(D)) are also nondischargeable. This
classification applies only to tax claims which would have received
priority under section 507(a) if the taxpayer had filed a title 11
petition on the date on which the deferred payment agreement was
entered into. This rule also applies only to installment payments
which become due during and after the commencement of the title 11
case. Payments which had become due within one year before the
filing of the petition receive sixth priority, and will be
nondischargeable under the general rule of section 523(a)(1)(A).
The above categories of nondischargeability apply to customs
duties as well as to taxes.
Paragraph (2) provides that as under Bankruptcy Act Sec. 17a(2)
[section 35(a)(2) of former title 11], a debt for obtaining money,
property, services, or a refinancing extension or renewal of credit
by false pretenses, a false representation, or actual fraud, or by
use of a statement in writing respecting the debtor's financial
condition that is materially false, on which the creditor
reasonably relied, and which the debtor made or published with
intent to deceive, is excepted from discharge. This provision is
modified only slightly from current section 17a(2). First, "actual
fraud" is added as a ground for exception from discharge. Second,
the creditor must not only have relied on a false statement in
writing, but the reliance must have been reasonable. This codifies
case law construing present section 17a(2). Third, the phrase "in
any manner whatsoever" that appears in current law after "made or
published" is deleted as unnecessary, the word "published" is used
in the same sense that it is used in defamation cases.
Unscheduled debts are excepted from discharge under paragraph
(3). The provision, derived from section 17a(3) [section 35(a)(3)
of former title 11], follows current law, but clarifies some
uncertainties generated by the case law construing 17a(3). The debt
is excepted from discharge if it was not scheduled in time to
permit timely action by the creditor to protect his rights, unless
the creditor had notice or actual knowledge of the case.
Paragraph (4) excepts debts for fraud incurred by the debtor
while acting in a fiduciary capacity or for defalcation,
embezzlement, or misappropriation.
Paragraph (5) provides that debts for willful and malicious
conversion or injury by the debtor to another entity or the
property of another entity are nondischargeable. Under this
paragraph "willful" means deliberate or intentional. To the extent
that Tinker v. Colwell, 139 U.S. 473 (1902), held that a less
strict standard is intended, and to the extent that other cases
have relied on Tinker to apply a "reckless disregard" standard,
they are overruled.
Paragraph (6) excepts from discharge debts to a spouse, former
spouse, or child of the debtor for alimony to, maintenance for, or
support of the spouse or child. This language, in combination with
the repeal of section 456(b) of the Social Security Act (42 U.S.C.
656(b)) by section 326 of the bill, will apply to make
nondischargeable only alimony, maintenance, or support owed
directly to a spouse or dependent. What constitutes alimony,
maintenance, or support, will be determined under the bankruptcy
law, not State law. Thus, cases such as In re Waller, 494 F.2d 447
(6th Cir. 1974), are overruled, and the result in cases such as
Fife v. Fife, 1 Utah 2d 281, 265 P.2d 642 (1952) is followed. The
proviso, however, makes nondischargeable any debts resulting from
an agreement by the debtor to hold the debtor's spouse harmless on
joint debts, to the extent that the agreement is in payment of
alimony, maintenance, or support of the spouse, as determined under
bankruptcy law considerations as to whether a particular agreement
to pay money to a spouse is actually alimony or a property
settlement.
Paragraph (7) makes nondischargeable certain liabilities for
penalties including tax penalties if the underlying tax with
respect to which the penalty was imposed is also nondischargeable
(sec. 523(a)(7)). These latter liabilities cover those which, but
are penal in nature, as distinct from so-called "pecuniary loss"
penalties which, in the case of taxes, involve basically the
collection of a tax under the label of a "penalty." This provision
differs from the bill as introduced, which did not link the
nondischarge of a tax penalty with the treatment of the underlying
tax. The amended provision reflects the existing position of the
Internal Revenue Service as to tax penalties imposed by the
Internal Revenue Code (Rev.Rul. 68-574, 1968-2 C.B. 595).
Paragraph (8) follows generally current law and excerpts from
discharge student loans until such loans have been due and owing
for five years. Such loans include direct student loans as well as
insured and guaranteed loans. This provision is intended to be self-
executing and the lender or institution is not required to file a
complaint to determine the nondischargeability of any student loan.
Paragraph (9) excepts from discharge debts that the debtor owed
before a previous bankruptcy case concerning the debtor in which
the debtor was denied a discharge other than on the basis of the
six-year bar.
Subsection (b) of this section permits discharge in a bankruptcy
case of an unscheduled debt from a prior case. This provision is
carried over from Bankruptcy Act Sec. 17b [section 35(b) of former
title 11]. The result dictated by the subsection would probably not
be different if the subsection were not included. It is included
nevertheless for clarity.
Subsection (c) requires a creditor who is owed a debt that may be
excepted from discharge under paragraph (2), (4), or (5), (false
statements, defalcation or larceny misappropriation, or willful and
malicious injury) to initiate proceedings in the bankruptcy court
for an exception to discharge. If the creditor does not act, the
debt is discharged. This provision does not change current law.
Subsection (d) is new. It provides protection to a consumer
debtor that dealt honestly with a creditor who sought to have a
debt excepted from discharge on the ground of falsity in the
incurring of the debt. The debtor may be awarded costs and a
reasonable attorney's fee for the proceeding to determine the
dischargeability of a debt under subsection (a)(2), if the court
finds that the proceeding was frivolous or not brought by its
creditor in good faith.
The purpose of the provision is to discourage creditors from
initiating proceedings to obtaining a false financial statement
exception to discharge in the hope of obtaining a settlement from
an honest debtor anxious to save attorney's fees. Such practices
impair the debtor's fresh start and are contrary to the spirit of
the bankruptcy laws.
HOUSE REPORT NO. 95-595
Subsection (a) lists eight kinds of debts excepted from
discharge. Taxes that are entitled to priority are excepted from
discharge under paragraph (1). In addition, taxes with respect to
which the debtor made a fraudulent return or willfully attempted to
evade or defeat, or with respect to which a return (if required)
was not filed or was not filed after the due date and after one
year before the bankruptcy case are excepted from discharge. If the
taxing authority's claim has been disallowed, then it would be
barred by the more modern rules of collateral estoppel from
reasserting that claim against the debtor after the case was
closed. See Plumb, The Tax Recommendations of the Commission on the
Bankruptcy Laws: Tax Procedures, 88 Harv.L.Rev. 1360, 1388 (1975).
As under Bankruptcy Act Sec. 17a(2) [section 35(a)(2) of former
title 11], debt for obtaining money, property, services, or an
extension or renewal of credit by false pretenses, a false
representation, or actual fraud, or by use of a statement in
writing respecting the debtor's financial condition that is
materially false, on which the creditor reasonably relied, and that
the debtor made or published with intent to deceive, is excepted
from discharge. This provision is modified only slightly from
current section 17a(2). First, "actual fraud" is added as a grounds
for exception from discharge. Second, the creditor must not only
have relied on a false statement in writing, the reliance must have
been reasonable. This codifies case law construing this provision.
Third, the phrase "in any manner whatsoever" that appears in
current law after "made or published" is deleted as unnecessary.
The word "published" is used in the same sense that it is used in
slander actions.
Unscheduled debts are excepted from discharge under paragraph
(3). The provision, derived from section 17a(3) [section 35(a)(3)
of former title 11], follows current law, but clarifies some
uncertainties generated by the case law construing 17a(3). The debt
is excepted from discharge if it was not scheduled in time to
permit timely action by the creditor to protect his rights, unless
the creditor had notice or actual knowledge of the case.
Paragraph (4) excepts debts for embezzlement or larceny. The
deletion of willful and malicious conversion from Sec. 17a(2) of
the Bankruptcy Act [section 35(a)(2) of former title 11] is not
intended to effect a substantive change. The intent is to include
in the category of non-dischargeable debts a conversion under which
the debtor willfully and maliciously intends to borrow property for
a short period of time with no intent to inflict injury but on
which injury is in fact inflicted.
Paragraph (5) excepts from discharge debts to a spouse, former
spouse, or child of the debtor for alimony to, maintenance for, or
support of, the spouse or child. This language, in combination with
the repeal of section 456(b) of the Social Security Act (42 U.S.C.
656(b)) by section 327 of the bill, will apply to make
nondischargeable only alimony, maintenance, or support owed
directly to a spouse or dependent. See Hearings, pt. 2, at 942.
What constitutes alimony, maintenance, or support, will be
determined under the bankruptcy laws, not State law. Thus, cases
such as In re Waller, 494 F.2d 447 (6th Cir. 1974); Hearings, pt.
3, at 1308-10, are overruled, and the result in cases such as Fife
v. Fife, 1 Utah 2d 281, 265 P.2d 642 (1952) is followed. This
provision will, however, make nondischargeable any debts resulting
from an agreement by the debtor to hold the debtor's spouse
harmless on joint debts, to the extent that the agreement is in
payment of alimony, maintenance, or support of the spouse, as
determined under bankruptcy law considerations that are similar to
considerations of whether a particular agreement to pay money to a
spouse is actually alimony or a property settlement. See Hearings,
pt. 3, at 1287-1290.
Paragraph (6) excepts debts for willful and malicious injury by
the debtor to another person or to the property of another person.
Under this paragraph, "willful" means deliberate or intentional. To
the extent that Tinker v. Colwell, 193 U.S. 473 (1902) [24 S.Ct.
505, 48 L.Ed. 754, 11 Am.Bankr.Rep. 568], held that a looser
standard is intended, and to the extent that other cases have
relied on Tinker to apply a "reckless disregard" standard, they are
overruled.
Paragraph (7) excepts from discharge a debt for a fine, penalty,
or forfeiture payable to and for the benefit of a governmental
unit, that is not compensation for actual pecuniary loss.
Paragraph (8) [enacted as (9)] excepts from discharge debts that
the debtor owed before a previous bankruptcy case concerning the
debtor in which the debtor was denied a discharge other than on the
basis of the six-year bar.
Subsection (d) is new. It provides protection to a consumer
debtor that dealt honestly with a creditor who sought to have a
debt excepted from discharge on grounds of falsity in the incurring
of the debt. The debtor is entitled to costs of and a reasonable
attorney's fee for the proceeding to determine the dischargeability
of a debt under subsection (a)(2), if the creditor initiated the
proceeding and the debt was determined to be dischargeable. The
court is permitted to award any actual pecuniary loss that the
debtor may have suffered as a result of the proceeding (such as
loss of a day's pay). The purpose of the provision is to discourage
creditors from initiating false financial statement exception to
discharge actions in the hopes of obtaining a settlement from an
honest debtor anxious to save attorney's fees. Such practices
impair the debtor's fresh start.
REFERENCES IN TEXT
The Internal Revenue Code of 1986, referred to in subsec. (a), is
classified generally to Title 26, Internal Revenue Code.
Section 103 of the Truth in Lending Act, referred to in subsec.
(a)(2)(C)(ii)(I), is classified to section 1602 of Title 15,
Commerce and Trade.
The Bankruptcy Act, referred to in subsecs. (a)(10) and (b), is
act July 1, 1898, ch. 541, 30 Stat. 544, as amended, which was
classified generally to former Title 11. Sections 14c and 17a of
the Bankruptcy Act were classified to sections 32(c) and 35(a) of
former Title 11.
Section 408(b)(1) of the Employee Retirement Income Security Act
of 1974, referred to in subsec. (a)(18)(A), is classified to
section 1108(b)(1) of Title 29, Labor.
Section 3(a)(47) of the Securities Exchange Act of 1934, referred
to in subsec. (a)(19)(A)(i), is classified to section 78c(a)(47) of
Title 15, Commerce and Trade.
Section 439A of the Higher Education Act of 1965, referred to in
subsec. (b), was classified to section 1087-3 of Title 20,
Education, and was repealed by Pub. L. 95-598, title III, Sec. 317,
Nov. 6, 1978, 92 Stat. 2678.
Section 733(g) of the Public Health Service Act, referred to in
subsec. (b), was repealed by Pub. L. 95-598, title III, Sec. 327,
Nov. 6, 1978, 92 Stat. 2679. A subsec. (g), containing similar
provisions, was added to section 733 by Pub. L. 97-35, title XXVII,
Sec. 2730, Aug. 13, 1981, 95 Stat. 919. Section 733 was
subsequently omitted in the general revision of subchapter V of
chapter 6A of Title 42, The Public Health and Welfare, by Pub. L.
102-408, title I, Sec. 102, Oct. 13, 1992, 106 Stat. 1994. See
section 292f(g) of Title 42.
AMENDMENTS
2005 - Pub. L. 109-8, Sec. 1209(1), transferred par. (15) and
inserted it after subsec. (a)(14A). See 1994 Amendments note below.
Pub. L. 109-8, Sec. 215(3), in par. (15), inserted "to a spouse,
former spouse, or child of the debtor and" before "not of the kind"
and "or" after "court of record," and substituted a semicolon for
"unless -
"(A) the debtor does not have the ability to pay such debt from
income or property of the debtor not reasonably necessary to be
expended for the maintenance or support of the debtor or a
dependent of the debtor and, if the debtor is engaged in a
business, for the payment of expenditures necessary for the
continuation, preservation, and operation of such business; or
"(B) discharging such debt would result in a benefit to the
debtor that outweighs the detrimental consequences to a spouse,
former spouse, or child of the debtor;".
Subsec. (a). Pub. L. 109-8, Sec. 714(2), inserted at end "For
purposes of this subsection, the term 'return' means a return that
satisfies the requirements of applicable nonbankruptcy law
(including applicable filing requirements). Such term includes a
return prepared pursuant to section 6020(a) of the Internal Revenue
Code of 1986, or similar State or local law, or a written
stipulation to a judgment or a final order entered by a
nonbankruptcy tribunal, but does not include a return made pursuant
to section 6020(b) of the Internal Revenue Code of 1986, or a
similar State or local law."
Subsec. (a)(1)(A). Pub. L. 109-8, Sec. 1502(a)(2), substituted
"507(a)(3)" for "507(a)(2)".
Subsec. (a)(1)(B). Pub. L. 109-8, Sec. 714(1)(A), inserted "or
equivalent report or notice," after "a return," in introductory
provisions.
Subsec. (a)(1)(B)(i). Pub. L. 109-8, Sec. 714(1)(B), inserted "or
given" after "filed".
Subsec. (a)(1)(B)(ii). Pub. L. 109-8, Sec. 714(1)(C), inserted
"or given" after "filed" and ", report, or notice" after "return".
Subsec. (a)(2)(C). Pub. L. 109-8, Sec. 310, amended subpar. (C)
generally. Prior to amendment, subpar. (C) read as follows: "for
purposes of subparagraph (A) of this paragraph, consumer debts owed
to a single creditor and aggregating more than $1,000 for 'luxury
goods or services' incurred by an individual debtor on or within 60
days before the order for relief under this title, or cash advances
aggregating more than $1,000 that are extensions of consumer credit
under an open end credit plan obtained by an individual debtor on
or within 60 days before the order for relief under this title, are
presumed to be nondischargeable; 'luxury goods or services' do not
include goods or services reasonably acquired for the support or
maintenance of the debtor or a dependent of the debtor; an
extension of consumer credit under an open end credit plan is to be
defined for purposes of this subparagraph as it is defined in the
Consumer Credit Protection Act;".
Subsec. (a)(5). Pub. L. 109-8, Sec. 215(1)(A), added par. (5) and
struck out former par. (5) which read as follows: "to a spouse,
former spouse, or child of the debtor, for alimony to, maintenance
for, or support of such spouse or child, in connection with a
separation agreement, divorce decree or other order of a court of
record, determination made in accordance with State or territorial
law by a governmental unit, or property settlement agreement, but
not to the extent that -
"(A) such debt is assigned to another entity, voluntarily, by
operation of law, or otherwise (other than debts assigned
pursuant to section 408(a)(3) of the Social Security Act, or any
such debt which has been assigned to the Federal Government or to
a State or any political subdivision of such State); or
"(B) such debt includes a liability designated as alimony,
maintenance, or support, unless such liability is actually in the
nature of alimony, maintenance, or support;"
Subsec. (a)(8). Pub. L. 109-8, Sec. 220, added par. (8) and
struck out former par. (8) which read as follows: "for an
educational benefit overpayment or loan made, insured or guaranteed
by a governmental unit, or made under any program funded in whole
or in part by a governmental unit or nonprofit institution, or for
an obligation to repay funds received as an educational benefit,
scholarship or stipend, unless excepting such debt from discharge
under this paragraph will impose an undue hardship on the debtor
and the debtor's dependents;".
Subsec. (a)(9). Pub. L. 109-8, Sec. 1209(2), substituted "motor
vehicle, vessel, or aircraft" for "motor vehicle".
Subsec. (a)(14A). Pub. L. 109-8, Sec. 314(a), added par. (14A).
Subsec. (a)(14B). Pub. L. 109-8, Sec. 1235, added par. (14B).
Subsec. (a)(16). Pub. L. 109-8, Sec. 412, struck out "dwelling"
after "debtor's interest in a" and "housing" after "share of a
cooperative" and substituted "ownership," for "ownership or" and
"or a lot in a homeowners association, for as long as the debtor or
the trustee has a legal, equitable, or possessory ownership
interest in such unit, such corporation, or such lot," for "but
only if such fee or assessment is payable for a period during which
-
"(A) the debtor physically occupied a dwelling unit in the
condominium or cooperative project; or
"(B) the debtor rented the dwelling unit to a tenant and
received payments from the tenant for such period,".
Subsec. (a)(17). Pub. L. 109-8, Sec. 301, substituted "on a
prisoner by any court" for "by a court" and "subsection (b) or
(f)(2) of section 1915" for "section 1915(b) or (f)" and inserted
"(or a similar non-Federal law)" after "title 28" in two places.
Subsec. (a)(18). Pub. L. 109-8, Sec. 224(c), added par. (18).
Pub. L. 109-8, Sec. 215(1)(B), struck out par. (18) which read as
follows: "owed under State law to a State or municipality that is -

"(A) in the nature of support, and
"(B) enforceable under part D of title IV of the Social
Security Act (42 U.S.C. 601 et seq.); or".
Subsec. (a)(19)(B). Pub. L. 109-8, Sec. 1404(a), inserted ",
before, on, or after the date on which the petition was filed,"
after "results" in introductory provisions.
Subsec. (c)(1). Pub. L. 109-8, Sec. 215(2), substituted "or (6)"
for "(6), or (15)" in two places.
Subsec. (e). Pub. L. 109-8, Sec. 1209(3), substituted "an
insured" for "a insured".
2002 - Subsec. (a)(19). Pub. L. 107-204 added par. (19).
1998 - Subsec. (a)(8). Pub. L. 105-244 substituted "stipend,
unless" for "stipend, unless - " and struck out "(B)" before
"excepting such debt" and subpar. (A) which read as follows: "such
loan, benefit, scholarship, or stipend overpayment first became due
more than 7 years (exclusive of any applicable suspension of the
repayment period) before the date of the filing of the petition;
or".
1996 - Subsec. (a)(5)(A). Pub. L. 104-193, Sec. 374(a)(4),
substituted "section 408(a)(3)" for "section 402(a)(26)".
Subsec. (a)(17). Pub. L. 104-134 added par. (17).
Subsec. (a)(18). Pub. L. 104-193, Sec. 374(a)(1)-(3), added par.
(18).
1994 - Par. (15). Pub. L. 103-394, Sec. 304(e)[(1)], amended this
section by adding par. (15) at the end. See 2005 Amendment note
above.
Subsec. (a). Pub. L. 103-394, Sec. 501(d)(13)(A)(i), substituted
"1141," for "1141,," in introductory provisions.
Subsec. (a)(1)(A). Pub. L. 103-394, Sec. 304(h)(3), substituted
"507(a)(8)" for "507(a)(7)".
Subsec. (a)(2)(C). Pub. L. 103-394, Secs. 306, 501(d)(13)(A)(ii),
substituted "$1,000 for" for "$500 for", "60" for "forty" after
"incurred by an individual debtor on or within", and "60" for
"twenty" after "obtained by an individual debtor on or within", and
struck out "(15 U.S.C. 1601 et seq.)" after "Protection Act".
Subsec. (a)(11). Pub. L. 103-322, Sec. 320934(1), struck out "or"
after semicolon at end.
Subsec. (a)(12). Pub. L. 103-322, Sec. 320934(2), which directed
the substitution of "; or" for a period at end of par. (12), could
not be executed because a period did not appear at end.
Subsec. (a)(13). Pub. L. 103-394, Sec. 221(1), substituted
semicolon for period at end.
Pub. L. 103-322, Sec. 320934(3), added par. (13).
Subsec. (a)(14). Pub. L. 103-394, Sec. 221(2), added par. (14).
Subsec. (a)(16). Pub. L. 103-394, Sec. 309, added par. (16).
Subsec. (b). Pub. L. 103-394, Sec. 501(d)(13)(B), struck out "(20
U.S.C. 1087-3)" after "Act of 1965" and "(42 U.S.C. 294f)" after
"Service Act".
Subsec. (c)(1). Pub. L. 103-394, Sec. 304(e)(2), substituted
"(6), or (15)" for "or (6)" in two places.
Subsec. (e). Pub. L. 103-394, Sec. 501(d)(13)(C), substituted
"insured depository institution" for "depository institution or
insured credit union".
1990 - Subsec. (a)(8). Pub. L. 101-647, Sec. 3621, substituted
"for an educational benefit overpayment or loan made, insured or
guaranteed by a governmental unit, or made under any program funded
in whole or in part by a governmental unit or nonprofit
institution, or for an obligation to repay funds received as an
educational benefit, scholarship or stipend, unless" for "for an
educational loan made, insured, or guaranteed by a governmental
unit, or made under any program funded in whole or in part by a
governmental unit or a nonprofit institution, unless" in
introductory provisions and amended subpar. (A) generally. Prior to
amendment, subpar. (A) read as follows: "such loan first became due
before five years (exclusive of any applicable suspension of the
repayment period) before the date of the filing of the petition;
or".
Subsec. (a)(9). Pub. L. 101-581 and Pub. L. 101-647, Sec.
3102(a), identically amended par. (9) generally. Prior to
amendment, par. (9) read as follows: "to any entity, to the extent
that such debt arises from a judgment or consent decree entered in
a court of record against the debtor wherein liability was incurred
by such debtor as a result of the debtor's operation of a motor
vehicle while legally intoxicated under the laws or regulations of
any jurisdiction within the United States or its territories
wherein such motor vehicle was operated and within which such
liability was incurred; or".
Subsec. (a)(11), (12). Pub. L. 101-647, Sec. 2522(a)(1), added
pars. (11) and (12).
Subsec. (c). Pub. L. 101-647, Sec. 2522(a)(3), designated
existing provisions as par. (1) and added par. (2).
Subsec. (e). Pub. L. 101-647, Sec. 2522(a)(2), added subsec. (e).
1986 - Subsec. (a). Pub. L. 99-554, Sec. 257(n), inserted
reference to sections 1228(a) and 1228(b) of this title.
Subsec. (a)(1)(A). Pub. L. 99-554, Sec. 283(j)(1)(A), substituted
"507(a)(7)" for "507(a)(6)".
Subsec. (a)(5). Pub. L. 99-554, Sec. 281, struck out the comma
after "decree" and inserted ", determination made in accordance
with State or territorial law by a governmental unit," after
"record".
Subsec. (a)(9), (10). Pub. L. 99-554, Sec. 283(j)(1)(B),
redesignated par. (9) relating to debts incurred by persons driving
while intoxicated, added by Pub. L. 98-353, as (10).
Subsec. (b). Pub. L. 99-554, Sec. 283(j)(2), substituted
"Service" for "Services".
1984 - Subsec. (a)(2). Pub. L. 98-353, Sec. 454(a)(1), in
provisions preceding subpar. (A), struck out "obtaining" after
"for", and substituted "refinancing of credit, to the extent
obtained" for "refinance of credit,".
Subsec. (a)(2)(A). Pub. L. 98-353, Sec. 307(a)(1), struck out
"or" at end.
Subsec. (a)(2)(B). Pub. L. 98-353, Sec. 307(a)(2), inserted "or"
at end.
Subsec. (a)(2)(B)(iii). Pub. L. 98-353, Sec. 454(a)(1)(A), struck
out "obtaining" before "such".
Subsec. (a)(2)(C). Pub. L. 98-353, Sec. 307(a)(3), added subpar.
(C).
Subsec. (a)(5). Pub. L. 98-353, Sec. 454(b)(1), inserted "or
other order of a court of record" after "divorce decree," in
provisions preceding subpar. (A).
Subsec. (a)(5)(A). Pub. L. 98-353, Sec. 454(b)(2), inserted ", or
any such debt which has been assigned to the Federal Government or
to a State or any political subdivision of such State".
Subsec. (a)(8). Pub. L. 98-353, Secs. 371(1), 454(a)(2), struck
out "of higher education" after "a nonprofit institution of" and
struck out "or" at end.
Subsec. (a)(9). Pub. L. 98-353, Sec. 371(2), added the par. (9)
relating to debts incurred by persons driving while intoxicated.
Subsec. (c). Pub. L. 98-353, Sec. 454(c), inserted "of a kind"
after "debt".
Subsec. (d). Pub. L. 98-353, Sec. 307(b), substituted "the court
shall grant judgment in favor of the debtor for the costs of, and a
reasonable attorney's fee for, the proceeding if the court finds
that the position of the creditor was not substantially justified,
except that the court shall not award such costs and fees if
special circumstances would make the award unjust" for "the court
shall grant judgment against such creditor and in favor of the
debtor for the costs of, and a reasonable attorney's fee for, the
proceeding to determine dischargeability, unless such granting of
judgment would be clearly inequitable".
1981 - Subsec. (a)(5)(A). Pub. L. 97-35 substituted "law, or
otherwise (other than debts assigned pursuant to section 402(a)(26)
of the Social Security Act);" for "law, or otherwise;".
1979 - Subsec. (a)(8). Pub. L. 96-56 substituted "for an
educational loan made, insured, or guaranteed by a governmental
unit, or made under any program funded in whole or in part by a
governmental unit or a nonprofit institution of higher education"
for "to a governmental unit, or a nonprofit institution of higher
education, for an educational loan" in the provisions preceding
subpar. (A) and inserted "(exclusive of any applicable suspension
of the repayment period)" after "before five years" in subpar. (A).
EFFECTIVE DATE OF 2005 AMENDMENT
Pub. L. 109-8, title XIV, Sec. 1404(b), Apr. 20, 2005, 119 Stat.
215, provided that: "The amendment made by subsection (a) [amending
this section] is effective beginning July 30, 2002."
Amendment by sections 215, 220, 224(c), 301, 310, 314(a), 412,
714, 1209, 1235, and 1502(a)(2) of Pub. L. 109-8 effective 180 days
after Apr. 20, 2005, and not applicable with respect to cases
commenced under this title before such effective date, except as
otherwise provided, see section 1501 of Pub. L. 109-8, set out as a
note under section 101 of this title.
EFFECTIVE DATE OF 1998 AMENDMENT
Pub. L. 105-244, title IX, Sec. 971(b), Oct. 7, 1998, 112 Stat.
1837, provided that: "The amendment made by subsection (a)
[amending this section] shall apply only with respect to cases
commenced under title 11, United States Code, after the date of
enactment of this Act [Oct. 7, 1998]."
EFFECTIVE DATE OF 1996 AMENDMENT
Section 374(c) of Pub. L. 104-193 provided that: "The amendments
made by this section [amending this section and section 656 of
Title 42, The Public Health and Welfare] shall apply only with
respect to cases commenced under title 11 of the United States Code
after the date of the enactment of this Act [Aug. 22, 1996]."
For provisions relating to effective date of title III of Pub. L.
104-193, see section 395(a)-(c) of Pub. L. 104-193, set out as a
note under section 654 of Title 42, The Public Health and Welfare.
EFFECTIVE DATE OF 1994 AMENDMENT
Amendment by Pub. L. 103-394 effective Oct. 22, 1994, and not
applicable with respect to cases commenced under this title before
Oct. 22, 1994, see section 702 of Pub. L. 103-394, set out as a
note under section 101 of this title.
EFFECTIVE DATE OF 1990 AMENDMENTS
Section 3104 of title XXXI of Pub. L. 101-647 provided that:
"(a) Effective Date. - This title and the amendments made by this
title [amending this section and section 1328 of this title and
enacting provisions set out as a note under section 101 of this
title] shall take effect on the date of the enactment of this Act
[Nov. 29, 1990].
"(b) Application of Amendments. - The amendments made by this
title [amending this section and section 1328 of this title] shall
not apply with respect to cases commenced under title 11 of the
United States Code before the date of the enactment of this Act."
Amendment by section 3621 of Pub. L. 101-647 effective 180 days
after Nov. 29, 1990, see section 3631 of Pub. L. 101-647, set out
as an Effective Date note under section 3001 of Title 28, Judiciary
and Judicial Procedure.
Section 4 of Pub. L. 101-581 provided that:
"(a) Effective Date. - This Act and the amendments made by this
Act [amending this section and section 1328 of this title and
enacting provisions set out as a note under section 101 of this
title] shall take effect on the date of the enactment of this Act
[Nov. 15, 1990].
"(b) Application of Amendments. - The amendments made by this Act
[amending this section and section 1328 of this title] shall not
apply with respect to cases commenced under title 11 of the United
States Code before the date of the enactment of this Act."
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 257 of Pub. L. 99-554 effective 30 days
after Oct. 27, 1986, but not applicable to cases commenced under
this title before that date, see section 302(a), (c)(1) of Pub. L.
99-554, set out as a note under section 581 of Title 28, Judiciary
and Judicial Procedure.
Amendment by sections 281 and 283 of Pub. L. 99-554 effective 30
days after Oct. 27, 1986, see section 302(a) of Pub. L. 99-554.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-353 effective with respect to cases filed
90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
set out as a note under section 101 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-35 effective Aug. 13, 1981, see section
2334(c) of Pub. L. 97-35, set out as a note under section 656 of
Title 42, The Public Health and Welfare.
ADJUSTMENT OF DOLLAR AMOUNTS
For adjustment of dollar amounts specified in subsec.
(a)(2)(C)(i) of this section by the Judicial Conference of the
United States, see note set out under section 104 of this title.
(!1) See References in Text note below.