To amend chapter 7 of title 11 of the United States Code, to exclude medically distress debtors from the application of the means test, to amend the Truth in Lending Act to require certain disclosures in connection with credit card applications and solicitations, and for other purposes.

May 5, 2005

Mr. RUPPERSBERGER introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To amend chapter 7 of title 11 of the United States Code, to exclude medically distress debtors from the application of the means test, to amend the Truth in Lending Act to require certain disclosures in connection with credit card applications and solicitations, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Consumer Debt Prevention and Education Act of 2005'.

SEC. 2. AMENDMENT TO TITLE 11 OF THE UNITED STATES CODE.

(a) Amendment- Section 101(a)(2)(C) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Public Law 109-8) is amended by adding at the end of section 707(b) of title 11 of the United States Code, as added by such Act, the following:

`(8)(A) No judge, United States trustee (or bankruptcy administrator, if any), trustee, or other party in interest may file a motion under paragraph (2) if the debtor is a medically distressed debtor.

`(B) In this paragraph, the term medically distressed debtor' means a debtor who, in any consecutive 12-month period during the 3 years before the date of the filing of the petition--

`(i) had medical expenses for the debtor, a dependent of the debtor, or a member of the debtor's household that were not paid by any third party payor and were in excess of 25 percent of the debtor's household income for such 12-month period;

`(ii) was a member of a household in which 1 or more members (including the debtor) lost all or substantially all of the member's employment or business income for 4 or more weeks during such 12-month period due to a medical problem of a member of the household or a dependent of the debtor; or

`(iii) was a member of a household in which 1 or more members (including the debtor) lost all or substantially all of the member's alimony or support income for 4 or more weeks during such 12-month period due to a medical problem of a person obligated to pay alimony or support.'.

(b) Effective Date- The amendment made by subsection (a) shall take effect on April 20, 2005.

SEC. 3. DISCLOSURES IN CREDIT CARD SOLICITATIONS.

Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended--

(1) by redesignating paragraph (5) as paragraph (6); and

(2) by inserting after paragraph (4) the following new paragraph:

`(5) BROCHURE-

`(A) IN GENERAL- In addition to the information required under paragraph (1), any application to open a credit card account for any person under an open end consumer credit plan, or a solicitation to open such an account without requiring an application, that is mailed to consumers shall be accompanied by a brochure that describes the following:

`(i) An explanation of credit scores and the negative effects that low credit scores can have on the consumer.

`(ii) An explanation of how being over a credit limit hurts the consumer.

`(iii) An explanation of how long it would take paying off a credit balance by just making the minimum payments required and the effect that negative amortization may have in extending such time.

`(B) BOARD- The Board shall--

`(i) prescribe regulations that establish the minimum requirements for the brochure required under subparagraph (A); and

`(ii) develop a model brochure that meets such requirements.'.

END