11 U.S.C. § 524 — Effect of discharge

Page 148 TITLE 11—BANKRUPTCY § 524 EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–647, title XXXI, § 3104, Nov. 29, 1990, 104 Stat. 4916, provided that: ‘‘(a) EFFECTIVE DATE.—This title and the amend- ments 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 ef- fect 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 be- fore the date of the enactment of this Act.’’ Amendment by section 3621 of Pub. L. 101–647 effec- tive 180 days after Nov. 29, 1990, see section 3631 of Pub. L. 101–647, set out as an Effective Date note under sec- tion 3001 of Title 28, Judiciary and Judicial Procedure. Pub. L. 101–581, § 4, Nov. 15, 1990, 104 Stat. 2865, pro- vided 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 be- fore 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 sec- tion 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. Court Rules and Judicial Documents ADJUSTMENT OF DOLLAR AMOUNTS The dollar amounts specified in this section were ad- justed by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows: By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘725’’ was adjusted to ‘‘800’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘1,000’’ was adjusted to ‘‘1,100’’. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘675’’ was adjusted to ‘‘725’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘950’’ was adjusted to ‘‘1,000’’. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘650’’ was adjusted to ‘‘675’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘925’’ was adjusted to ‘‘950’’. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘600’’ was adjusted to ‘‘650’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘875’’ was adjusted to ‘‘925’’. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘550’’ was adjusted to ‘‘600’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘825’’ was adjusted to ‘‘875’’. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (a)(2)(C)(i)(I), dollar amount ‘‘500’’ was adjusted to ‘‘550’’ and, in subsec. (a)(2)(C)(i)(II), dollar amount ‘‘750’’ was adjusted to ‘‘825’’. [Pub. L. 109–8 amended subsec. (a)(2)(C) generally. See 2005 Amendment note above.] By notice dated Feb. 18, 2004, 69 F.R. 8482, effective Apr. 1, 2004, in subsec. (a)(2)(C), dollar amount ‘‘1,150’’ was adjusted to ‘‘1,225’’ each time it appeared. By notice dated Feb. 13, 2001, 66 F.R. 10910, effective Apr. 1, 2001, in subsec. (a)(2)(C), dollar amount ‘‘1,075’’ was adjusted to ‘‘1,150’’ each time it appeared. By notice dated Feb. 3, 1998, 63 F.R. 7179, effective Apr. 1, 1998, in subsec. (a)(2)(C), dollar amount ‘‘1,000’’ was adjusted to ‘‘1,075’’ each time it appeared. § 524. Effect of discharge (a) A discharge in a case under this title— (1) voids any judgment at any time obtained, to the extent that such judgment is a deter- mination of the personal liability of the debt- or with respect to any debt discharged under section 727, 944, 1141, 1192, 1228, or 1328 of this title, whether or not discharge of such debt is waived; (2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to col- lect, recover or offset any such debt as a per- sonal liability of the debtor, whether or not discharge of such debt is waived; and (3) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to col- lect or recover from, or offset against, prop- erty of the debtor of the kind specified in sec- tion 541(a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from dis- charge under section 523, 1192, 1228(a)(1), or 1328(a)(1), or that would be so excepted, deter- mined in accordance with the provisions of sections 523(c) and 523(d) of this title, in a case concerning the debtor’s spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such commu- nity claim is waived. (b) Subsection (a)(3) of this section does not apply if— (1)(A) the debtor’s spouse is a debtor in a case under this title, or a bankrupt or a debtor in a case under the Bankruptcy Act, com- menced within six years of the date of the fil- ing of the petition in the case concerning the debtor; and (B) the court does not grant the debtor’s spouse a discharge in such case concerning the debtor’s spouse; or (2)(A) the court would not grant the debtor’s spouse a discharge in a case under chapter 7 of Page 149 TITLE 11—BANKRUPTCY § 524 this title concerning such spouse commenced on the date of the filing of the petition in the case concerning the debtor; and (B) a determination that the court would not so grant such discharge is made by the bank- ruptcy court within the time and in the man- ner provided for a determination under section 727 of this title of whether a debtor is granted a discharge. (c) An agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dis- chargeable in a case under this title is enforce- able only to any extent enforceable under appli- cable nonbankruptcy law, whether or not dis- charge of such debt is waived, only if— (1) such agreement was made before the granting of the discharge under section 727, 1141, 1192, 1228, or 1328 of this title; (2) the debtor received the disclosures de- scribed in subsection (k) at or before the time at which the debtor signed the agreement; (3) such agreement has been filed with the court and, if applicable, accompanied by a dec- laration or an affidavit of the attorney that represented the debtor during the course of ne- gotiating an agreement under this subsection, which states that— (A) such agreement represents a fully in- formed and voluntary agreement by the debtor; (B) such agreement does not impose an undue hardship on the debtor or a dependent of the debtor; and (C) the attorney fully advised the debtor of the legal effect and consequences of— (i) an agreement of the kind specified in this subsection; and (ii) any default under such an agreement; (4) the debtor has not rescinded such agree- ment 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; (5) the provisions of subsection (d) of this section have been complied with; and (6)(A) in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as— (i) not imposing an undue hardship on the debtor or a dependent of the debtor; and (ii) in the best interest of the debtor. (B) Subparagraph (A) shall not apply to the extent that such debt is a consumer debt se- cured by real property. (d) In a case concerning an individual, when the court has determined whether to grant or not to grant a discharge under section 727, 1141, 1192, 1228, or 1328 of this title, the court may hold a hearing at which the debtor shall appear in person. At any such hearing, the court shall inform the debtor that a discharge has been granted or the reason why a discharge has not been granted. If a discharge has been granted and if the debtor desires to make an agreement of the kind specified in subsection (c) of this sec- tion and was not represented by an attorney during the course of negotiating such agree- ment, then the court shall hold a hearing at which the debtor shall appear in person and at such hearing the court shall— (1) inform the debtor— (A) that such an agreement is not required under this title, under nonbankruptcy law, or under any agreement not made in accord- ance with the provisions of subsection (c) of this section; and (B) of the legal effect and consequences of— (i) an agreement of the kind specified in subsection (c) of this section; and (ii) a default under such an agreement; and (2) determine whether the agreement that the debtor desires to make complies with the requirements of subsection (c)(6) of this sec- tion, if the consideration for such agreement is based in whole or in part on a consumer debt that is not secured by real property of the debtor. (e) Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt. (f) Nothing contained in subsection (c) or (d) of this section prevents a debtor from voluntarily repaying any debt. (g)(1)(A) After notice and hearing, a court that enters an order confirming a plan of reorganiza- tion under chapter 11 may issue, in connection with such order, an injunction in accordance with this subsection to supplement the injunc- tive effect of a discharge under this section. (B) An injunction may be issued under sub- paragraph (A) to enjoin entities from taking legal action for the purpose of directly or indi- rectly collecting, recovering, or receiving pay- ment or recovery with respect to any claim or demand that, under a plan of reorganization, is to be paid in whole or in part by a trust de- scribed in paragraph (2)(B)(i), except such legal actions as are expressly allowed by the injunc- tion, the confirmation order, or the plan of reor- ganization. (2)(A) Subject to subsection (h), if the require- ments of subparagraph (B) are met at the time an injunction described in paragraph (1) is en- tered, then after entry of such injunction, any proceeding that involves the validity, applica- tion, construction, or modification of such in- junction, or of this subsection with respect to such injunction, may be commenced only in the district court in which such injunction was en- tered, and such court shall have exclusive juris- diction over any such proceeding without regard to the amount in controversy. (B) The requirements of this subparagraph are that— (i) the injunction is to be implemented in connection with a trust that, pursuant to the plan of reorganization— (I) is to assume the liabilities of a debtor which at the time of entry of the order for relief has been named as a defendant in per- sonal injury, wrongful death, or property- Page 150 TITLE 11—BANKRUPTCY § 524 damage actions seeking recovery for dam- ages allegedly caused by the presence of, or exposure to, asbestos or asbestos-containing products; (II) is to be funded in whole or in part by the securities of 1 or more debtors involved in such plan and by the obligation of such debtor or debtors to make future payments, including dividends; (III) is to own, or by the exercise of rights granted under such plan would be entitled to own if specified contingencies occur, a ma- jority of the voting shares of— (aa) each such debtor; (bb) the parent corporation of each such debtor; or (cc) a subsidiary of each such debtor that is also a debtor; and (IV) is to use its assets or income to pay claims and demands; and (ii) subject to subsection (h), the court de- termines that— (I) the debtor is likely to be subject to sub- stantial future demands for payment arising out of the same or similar conduct or events that gave rise to the claims that are ad- dressed by the injunction; (II) the actual amounts, numbers, and tim- ing of such future demands cannot be deter- mined; (III) pursuit of such demands outside the procedures prescribed by such plan is likely to threaten the plan’s purpose to deal equi- tably with claims and future demands; (IV) as part of the process of seeking con- firmation of such plan— (aa) the terms of the injunction proposed to be issued under paragraph (1)(A), includ- ing any provisions barring actions against third parties pursuant to paragraph (4)(A), are set out in such plan and in any disclo- sure statement supporting the plan; and (bb) a separate class or classes of the claimants whose claims are to be ad- dressed by a trust described in clause (i) is established and votes, by at least 75 per- cent of those voting, in favor of the plan; and (V) subject to subsection (h), pursuant to court orders or otherwise, the trust will op- erate through mechanisms such as struc- tured, periodic, or supplemental payments, pro rata distributions, matrices, or periodic review of estimates of the numbers and val- ues of present claims and future demands, or other comparable mechanisms, that provide reasonable assurance that the trust will value, and be in a financial position to pay, present claims and future demands that in- volve similar claims in substantially the same manner. (3)(A) If the requirements of paragraph (2)(B) are met and the order confirming the plan of re- organization was issued or affirmed by the dis- trict court that has jurisdiction over the reorga- nization case, then after the time for appeal of the order that issues or affirms the plan— (i) the injunction shall be valid and enforce- able and may not be revoked or modified by any court except through appeal in accordance with paragraph (6); (ii) no entity that pursuant to such plan or thereafter becomes a direct or indirect trans- feree of, or successor to any assets of, a debtor or trust that is the subject of the injunction shall be liable with respect to any claim or de- mand made against such entity by reason of its becoming such a transferee or successor; and (iii) no entity that pursuant to such plan or thereafter makes a loan to such a debtor or trust or to such a successor or transferee shall, by reason of making the loan, be liable with respect to any claim or demand made against such entity, nor shall any pledge of as- sets made in connection with such a loan be upset or impaired for that reason; (B) Subparagraph (A) shall not be construed to— (i) imply that an entity described in sub- paragraph (A)(ii) or (iii) would, if this para- graph were not applicable, necessarily be lia- ble to any entity by reason of any of the acts described in subparagraph (A); (ii) relieve any such entity of the duty to comply with, or of liability under, any Federal or State law regarding the making of a fraudu- lent conveyance in a transaction described in subparagraph (A)(ii) or (iii); or (iii) relieve a debtor of the debtor’s obliga- tion to comply with the terms of the plan of reorganization, or affect the power of the court to exercise its authority under sections 1141 and 1142 to compel the debtor to do so. (4)(A)(i) Subject to subparagraph (B), an in- junction described in paragraph (1) shall be valid and enforceable against all entities that it ad- dresses. (ii) Notwithstanding the provisions of section 524(e), such an injunction may bar any action di- rected against a third party who is identifiable from the terms of such injunction (by name or as part of an identifiable group) and is alleged to be directly or indirectly liable for the conduct of, claims against, or demands on the debtor to the extent such alleged liability of such third party arises by reason of— (I) the third party’s ownership of a financial interest in the debtor, a past or present affil- iate of the debtor, or a predecessor in interest of the debtor; (II) the third party’s involvement in the management of the debtor or a predecessor in interest of the debtor, or service as an officer, director or employee of the debtor or a related party; (III) the third party’s provision of insurance to the debtor or a related party; or (IV) the third party’s involvement in a transaction changing the corporate structure, or in a loan or other financial transaction af- fecting the financial condition, of the debtor or a related party, including but not limited to— (aa) involvement in providing financing (debt or equity), or advice to an entity in- volved in such a transaction; or (bb) acquiring or selling a financial inter- est in an entity as part of such a trans- action. Page 151 TITLE 11—BANKRUPTCY § 524 (iii) As used in this subparagraph, the term ‘‘related party’’ means— (I) a past or present affiliate of the debtor; (II) a predecessor in interest of the debtor; or (III) any entity that owned a financial inter- est in— (aa) the debtor; (bb) a past or present affiliate of the debt- or; or (cc) a predecessor in interest of the debtor. (B) Subject to subsection (h), if, under a plan of reorganization, a kind of demand described in such plan is to be paid in whole or in part by a trust described in paragraph (2)(B)(i) in connec- tion with which an injunction described in para- graph (1) is to be implemented, then such in- junction shall be valid and enforceable with re- spect to a demand of such kind made, after such plan is confirmed, against the debtor or debtors involved, or against a third party described in subparagraph (A)(ii), if— (i) as part of the proceedings leading to issuance of such injunction, the court appoints a legal representative for the purpose of pro- tecting the rights of persons that might subse- quently assert demands of such kind, and (ii) the court determines, before entering the order confirming such plan, that identifying such debtor or debtors, or such third party (by name or as part of an identifiable group), in such injunction with respect to such demands for purposes of this subparagraph is fair and equitable with respect to the persons that might subsequently assert such demands, in light of the benefits provided, or to be pro- vided, to such trust on behalf of such debtor or debtors or such third party. (5) In this subsection, the term ‘‘demand’’ means a demand for payment, present or future, that— (A) was not a claim during the proceedings leading to the confirmation of a plan of reor- ganization; (B) arises out of the same or similar conduct or events that gave rise to the claims ad- dressed by the injunction issued under para- graph (1); and (C) pursuant to the plan, is to be paid by a trust described in paragraph (2)(B)(i). (6) Paragraph (3)(A)(i) does not bar an action taken by or at the direction of an appellate court on appeal of an injunction issued under paragraph (1) or of the order of confirmation that relates to the injunction. (7) This subsection does not affect the oper- ation of section 1144 or the power of the district court to refer a proceeding under section 157 of title 28 or any reference of a proceeding made prior to the date of the enactment of this sub- section. (h) APPLICATION TO EXISTING INJUNCTIONS.— For purposes of subsection (g)— (1) subject to paragraph (2), if an injunction of the kind described in subsection (g)(1)(B) was issued before the date of the enactment of this Act, as part of a plan of reorganization confirmed by an order entered before such date, then the injunction shall be considered to meet the requirements of subsection (g)(2)(B) for purposes of subsection (g)(2)(A), and to satisfy subsection (g)(4)(A)(ii), if— (A) the court determined at the time the plan was confirmed that the plan was fair and equitable in accordance with the re- quirements of section 1129(b); (B) as part of the proceedings leading to issuance of such injunction and confirma- tion of such plan, the court had appointed a legal representative for the purpose of pro- tecting the rights of persons that might sub- sequently assert demands described in sub- section (g)(4)(B) with respect to such plan; and (C) such legal representative did not object to confirmation of such plan or issuance of such injunction; and (2) for purposes of paragraph (1), if a trust described in subsection (g)(2)(B)(i) is subject to a court order on the date of the enactment of this Act staying such trust from settling or paying further claims— (A) the requirements of subsection (g)(2)(B)(ii)(V) shall not apply with respect to such trust until such stay is lifted or dis- solved; and (B) if such trust meets such requirements on the date such stay is lifted or dissolved, such trust shall be considered to have met such requirements continuously from the date of the enactment of this Act. (i) The willful failure of a creditor to credit payments received under a plan confirmed under this title, unless the order confirming the plan is revoked, the plan is in default, or the creditor has not received payments required to be made under the plan in the manner required by the plan (including crediting the amounts required under the plan), shall constitute a violation of an injunction under subsection (a)(2) if the act of the creditor to collect and failure to credit payments in the manner required by the plan caused material injury to the debtor. (j) Subsection (a)(2) does not operate as an in- junction against an act by a creditor that is the holder of a secured claim, if— (1) such creditor retains a security interest in real property that is the principal residence of the debtor; (2) such act is in the ordinary course of busi- ness between the creditor and the debtor; and (3) such act is limited to seeking or obtain- ing periodic payments associated with a valid security interest in lieu of pursuit of in rem relief to enforce the lien. (k)(1) The disclosures required under sub- section (c)(2) shall consist of the disclosure statement described in paragraph (3), completed as required in that paragraph, together with the agreement specified in subsection (c), state- ment, declaration, motion and order described, respectively, in paragraphs (4) through (8), and shall be the only disclosures required in connec- tion with entering into such agreement. (2) Disclosures made under paragraph (1) shall be made clearly and conspicuously and in writ- ing. The terms ‘‘Amount Reaffirmed’’ and ‘‘An- nual Percentage Rate’’ shall be disclosed more conspicuously than other terms, data or infor- mation provided in connection with this disclo- Page 152 TITLE 11—BANKRUPTCY § 524 sure, except that the phrases ‘‘Before agreeing to reaffirm a debt, review these important dis- closures’’ and ‘‘Summary of Reaffirmation Agreement’’ may be equally conspicuous. Dis- closures may be made in a different order and may use terminology different from that set forth in paragraphs (2) through (8), except that the terms ‘‘Amount Reaffirmed’’ and ‘‘Annual Percentage Rate’’ must be used where indicated. (3) The disclosure statement required under this paragraph shall consist of the following: (A) The statement: ‘‘Part A: Before agreeing to reaffirm a debt, review these important dis- closures:’’; (B) Under the heading ‘‘Summary of Reaffir- mation Agreement’’, the statement: ‘‘This Summary is made pursuant to the require- ments of the Bankruptcy Code’’; (C) The ‘‘Amount Reaffirmed’’, using that term, which shall be— (i) the total amount of debt that the debt- or agrees to reaffirm by entering into an agreement of the kind specified in sub- section (c), and (ii) the total of any fees and costs accrued as of the date of the disclosure statement, related to such total amount. (D) In conjunction with the disclosure of the ‘‘Amount Reaffirmed’’, the statements— (i) ‘‘The amount of debt you have agreed to reaffirm’’; and (ii) ‘‘Your credit agreement may obligate you to pay additional amounts which may come due after the date of this disclosure. Consult your credit agreement.’’. (E) The ‘‘Annual Percentage Rate’’, using that term, which shall be disclosed as— (i) if, at the time the petition is filed, the debt is an extension of credit under an open end credit plan, as the terms ‘‘credit’’ and ‘‘open end credit plan’’ are defined in section 103 of the Truth in Lending Act, then— (I) the annual percentage rate deter- mined under paragraphs (5) and (6) of sec- tion 127(b) of the Truth in Lending Act, as applicable, as disclosed to the debtor in the most recent periodic statement prior to entering into an agreement of the kind specified in subsection (c) or, if no such periodic statement has been given to the debtor during the prior 6 months, the an- nual percentage rate as it would have been so disclosed at the time the disclosure statement is given to the debtor, or to the extent this annual percentage rate is not readily available or not applicable, then (II) the simple interest rate applicable to the amount reaffirmed as of the date the disclosure statement is given to the debt- or, or if different simple interest rates apply to different balances, the simple in- terest rate applicable to each such bal- ance, identifying the amount of each such balance included in the amount re- affirmed, or (III) if the entity making the disclosure elects, to disclose the annual percentage rate under subclause (I) and the simple in- terest rate under subclause (II); or (ii) if, at the time the petition is filed, the debt is an extension of credit other than under an open end credit plan, as the terms ‘‘credit’’ and ‘‘open end credit plan’’ are de- fined in section 103 of the Truth in Lending Act, then— (I) the annual percentage rate under sec- tion 128(a)(4) of the Truth in Lending Act, as disclosed to the debtor in the most re- cent disclosure statement given to the debtor prior to the entering into an agree- ment of the kind specified in subsection (c) with respect to the debt, or, if no such dis- closure statement was given to the debtor, the annual percentage rate as it would have been so disclosed at the time the dis- closure statement is given to the debtor, or to the extent this annual percentage rate is not readily available or not applica- ble, then (II) the simple interest rate applicable to the amount reaffirmed as of the date the disclosure statement is given to the debt- or, or if different simple interest rates apply to different balances, the simple in- terest rate applicable to each such bal- ance, identifying the amount of such bal- ance included in the amount reaffirmed, or (III) if the entity making the disclosure elects, to disclose the annual percentage rate under (I) and the simple interest rate under (II). (F) If the underlying debt transaction was disclosed as a variable rate transaction on the most recent disclosure given under the Truth in Lending Act, by stating ‘‘The interest rate on your loan may be a variable interest rate which changes from time to time, so that the annual percentage rate disclosed here may be higher or lower.’’. (G) If the debt is secured by a security inter- est which has not been waived in whole or in part or determined to be void by a final order of the court at the time of the disclosure, by disclosing that a security interest or lien in goods or property is asserted over some or all of the debts the debtor is reaffirming and list- ing the items and their original purchase price that are subject to the asserted security inter- est, or if not a purchase-money security inter- est then listing by items or types and the original amount of the loan. (H) At the election of the creditor, a state- ment of the repayment schedule using 1 or a combination of the following— (i) by making the statement: ‘‘Your first payment in the amount of $lll is due on lll but the future payment amount may be different. Consult your reaffirmation agreement or credit agreement, as applica- ble.’’, and stating the amount of the first payment and the due date of that payment in the places provided; (ii) by making the statement: ‘‘Your pay- ment schedule will be:’’, and describing the repayment schedule with the number, amount, and due dates or period of payments scheduled to repay the debts reaffirmed to the extent then known by the disclosing party; or (iii) by describing the debtor’s repayment obligations with reasonable specificity to the extent then known by the disclosing party. Page 153 TITLE 11—BANKRUPTCY § 524 (I) The following statement: ‘‘Note: When this disclosure refers to what a creditor ‘may’ do, it does not use the word ‘may’ to give the creditor specific permission. The word ‘may’ is used to tell you what might occur if the law permits the creditor to take the action. If you have questions about your reaffirming a debt or what the law requires, consult with the at- torney who helped you negotiate this agree- ment reaffirming a debt. If you don’t have an attorney helping you, the judge will explain the effect of your reaffirming a debt when the hearing on the reaffirmation agreement is held.’’. (J)(i) The following additional statements: ‘‘Reaffirming a debt is a serious financial deci- sion. The law requires you to take certain steps to make sure the decision is in your best inter- est. If these steps are not completed, the reaffir- mation agreement is not effective, even though you have signed it. ‘‘1. Read the disclosures in this Part A care- fully. Consider the decision to reaffirm care- fully. Then, if you want to reaffirm, sign the reaffirmation agreement in Part B (or you may use a separate agreement you and your creditor agree on). ‘‘2. Complete and sign Part D and be sure you can afford to make the payments you are agreeing to make and have received a copy of the disclosure statement and a completed and signed reaffirmation agreement. ‘‘3. If you were represented by an attorney during the negotiation of your reaffirmation agreement, the attorney must have signed the certification in Part C. ‘‘4. If you were not represented by an attor- ney during the negotiation of your reaffirma- tion agreement, you must have completed and signed Part E. ‘‘5. The original of this disclosure must be filed with the court by you or your creditor. If a separate reaffirmation agreement (other than the one in Part B) has been signed, it must be attached. ‘‘6. If you were represented by an attorney during the negotiation of your reaffirmation agreement, your reaffirmation agreement be- comes effective upon filing with the court un- less the reaffirmation is presumed to be an undue hardship as explained in Part D. ‘‘7. If you were not represented by an attor- ney during the negotiation of your reaffirma- tion agreement, it will not be effective unless the court approves it. The court will notify you of the hearing on your reaffirmation agreement. You must attend this hearing in bankruptcy court where the judge will review your reaffirmation agreement. The bank- ruptcy court must approve your reaffirmation agreement as consistent with your best inter- ests, except that no court approval is required if your reaffirmation agreement is for a con- sumer debt secured by a mortgage, deed of trust, security deed, or other lien on your real property, like your home. ‘‘Your right to rescind (cancel) your reaffirma- tion agreement. You may rescind (cancel) your reaffirmation agreement at any time before the bankruptcy court enters a discharge order, or before the expiration of the 60-day period that begins on the date your reaffirmation agreement is filed with the court, whichever occurs later. To rescind (cancel) your reaffirmation agree- ment, you must notify the creditor that your re- affirmation agreement is rescinded (or can- celed). ‘‘What are your obligations if you reaffirm the debt? A reaffirmed debt remains your personal legal obligation. It is not discharged in your bankruptcy case. That means that if you default on your reaffirmed debt after your bankruptcy case is over, your creditor may be able to take your property or your wages. Otherwise, your obligations will be determined by the reaffirma- tion agreement which may have changed the terms of the original agreement. For example, if you are reaffirming an open end credit agree- ment, the creditor may be permitted by that agreement or applicable law to change the terms of that agreement in the future under certain conditions. ‘‘Are you required to enter into a reaffirma- tion agreement by any law? No, you are not re- quired to reaffirm a debt by any law. Only agree to reaffirm a debt if it is in your best interest. Be sure you can afford the payments you agree to make. ‘‘What if your creditor has a security interest or lien? Your bankruptcy discharge does not eliminate any lien on your property. A ‘lien’ is often referred to as a security interest, deed of trust, mortgage or security deed. Even if you do not reaffirm and your personal liability on the debt is discharged, because of the lien your cred- itor may still have the right to take the prop- erty securing the lien if you do not pay the debt or default on it. If the lien is on an item of per- sonal property that is exempt under your State’s law or that the trustee has abandoned, you may be able to redeem the item rather than reaffirm the debt. To redeem, you must make a single payment to the creditor equal to the amount of the allowed secured claim, as agreed by the parties or determined by the court.’’. (ii) In the case of a reaffirmation under sub- section (m)(2), numbered paragraph 6 in the disclosures required by clause (i) of this sub- paragraph shall read as follows: ‘‘6. If you were represented by an attorney during the negotiation of your reaffirmation agreement, your reaffirmation agreement be- comes effective upon filing with the court.’’. (4) The form of such agreement required under this paragraph shall consist of the following: ‘‘Part B: Reaffirmation Agreement. I (we) agree to reaffirm the debts arising under the credit agreement described below. ‘‘Brief description of credit agreement: ‘‘Description of any changes to the credit agreement made as part of this reaffirmation agreement: ‘‘Signature: Date: ‘‘Borrower: ‘‘Co-borrower, if also reaffirming these debts: ‘‘Accepted by creditor: ‘‘Date of creditor acceptance:’’. (5) The declaration shall consist of the fol- lowing: (A) The following certification: ‘‘Part C: Certification by Debtor’s Attorney (If Any). Page 154 TITLE 11—BANKRUPTCY § 524 ‘‘I hereby certify that (1) this agreement rep- resents a fully informed and voluntary agree- ment by the debtor; (2) this agreement does not impose an undue hardship on the debtor or any dependent of the debtor; and (3) I have fully ad- vised the debtor of the legal effect and con- sequences of this agreement and any default under this agreement. ‘‘Signature of Debtor’s Attorney: Date:’’. (B) If a presumption of undue hardship has been established with respect to such agree- ment, such certification shall state that, in the opinion of the attorney, the debtor is able to make the payment. (C) In the case of a reaffirmation agreement under subsection (m)(2), subparagraph (B) is not applicable. (6)(A) The statement in support of such agree- ment, which the debtor shall sign and date prior to filing with the court, shall consist of the fol- lowing: ‘‘Part D: Debtor’s Statement in Support of Re- affirmation Agreement. ‘‘1. I believe this reaffirmation agreement will not impose an undue hardship on my dependents or me. I can afford to make the payments on the reaffirmed debt because my monthly income (take home pay plus any other income received) is $lll, and my actual current monthly ex- penses including monthly payments on post- bankruptcy debt and other reaffirmation agree- ments total $lll, leaving $lll to make the required payments on this reaffirmed debt. I un- derstand that if my income less my monthly ex- penses does not leave enough to make the pay- ments, this reaffirmation agreement is pre- sumed to be an undue hardship on me and must be reviewed by the court. However, this pre- sumption may be overcome if I explain to the satisfaction of the court how I can afford to make the payments here: lll. ‘‘2. I received a copy of the Reaffirmation Dis- closure Statement in Part A and a completed and signed reaffirmation agreement.’’. (B) Where the debtor is represented by an at- torney and is reaffirming a debt owed to a cred- itor defined in section 19(b)(1)(A)(iv) of the Fed- eral Reserve Act, the statement of support of the reaffirmation agreement, which the debtor shall sign and date prior to filing with the court, shall consist of the following: ‘‘I believe this reaffirmation agreement is in my financial interest. I can afford to make the payments on the reaffirmed debt. I received a copy of the Reaffirmation Disclosure Statement in Part A and a completed and signed reaffirma- tion agreement.’’. (7) The motion that may be used if approval of such agreement by the court is required in order for it to be effective, shall be signed and dated by the movant and shall consist of the fol- lowing: ‘‘Part E: Motion for Court Approval (To be completed only if the debtor is not represented by an attorney.). I (we), the debtor(s), affirm the following to be true and correct: ‘‘I am not represented by an attorney in con- nection with this reaffirmation agreement. ‘‘I believe this reaffirmation agreement is in my best interest based on the income and ex- penses I have disclosed in my Statement in Sup- port of this reaffirmation agreement, and be- cause (provide any additional relevant reasons the court should consider): ‘‘Therefore, I ask the court for an order ap- proving this reaffirmation agreement.’’. (8) The court order, which may be used to ap- prove such agreement, shall consist of the fol- lowing: ‘‘Court Order: The court grants the debtor’s motion and approves the reaffirmation agree- ment described above.’’. (l) Notwithstanding any other provision of this title the following shall apply: (1) A creditor may accept payments from a debtor before and after the filing of an agree- ment of the kind specified in subsection (c) with the court. (2) A creditor may accept payments from a debtor under such agreement that the creditor believes in good faith to be effective. (3) The requirements of subsections (c)(2) and (k) shall be satisfied if disclosures re- quired under those subsections are given in good faith. (m)(1) Until 60 days after an agreement of the kind specified in subsection (c) is filed with the court (or such additional period as the court, after notice and a hearing and for cause, orders before the expiration of such period), it shall be presumed that such agreement is an undue hard- ship on the debtor if the debtor’s monthly in- come less the debtor’s monthly expenses as shown on the debtor’s completed and signed statement in support of such agreement re- quired under subsection (k)(6)(A) is less than the scheduled payments on the reaffirmed debt. This presumption shall be reviewed by the court. The presumption may be rebutted in writing by the debtor if the statement includes an explanation that identifies additional sources of funds to make the payments as agreed upon under the terms of such agreement. If the presumption is not rebutted to the satisfaction of the court, the court may disapprove such agreement. No agree- ment shall be disapproved without notice and a hearing to the debtor and creditor, and such hearing shall be concluded before the entry of the debtor’s discharge. (2) This subsection does not apply to reaffir- mation agreements where the creditor is a cred- it union, as defined in section 19(b)(1)(A)(iv) of the Federal Reserve Act. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2592; Pub. L. 98–353, title III, §§ 308, 455, July 10, 1984, 98 Stat. 354, 376; Pub. L. 99–554, title II, §§ 257(o), 282, 283(k), Oct. 27, 1986, 100 Stat. 3115–3117; Pub. L. 103–394, title I, §§ 103, 111(a), title V, § 501(d)(14), Oct. 22, 1994, 108 Stat. 4108, 4113, 4145; Pub. L. 109–8, title II, §§ 202, 203(a), title XII, § 1210, Apr. 20, 2005, 119 Stat. 43, 194; Pub. L. 111–327, § 2(a)(19), Dec. 22, 2010, 124 Stat. 3559; Pub. L. 116–54, § 4(a)(9), Aug. 23, 2019, 133 Stat. 1086.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS 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 prop- erty. Page 155 TITLE 11—BANKRUPTCY § 524 Sections 524(c) and (d) represent a compromise be- tween the House bill and Senate amendment on the issue of reaffirmation of a debt discharged in bank- ruptcy. 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 reaffirma- tion 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, be- fore granting a discharge under section 727, 1141, or 1328, as not imposing a hardship on the debtor or a de- pendent of the debtor and in the best interest of the debtor; alternatively, the court may approve an agree- ment 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 sec- tion 524(d) will be held whether or not the debtor de- sires to reaffirm any debts. SENATE REPORT NO. 95–989 Subsection (a) specifies that a discharge in a bank- ruptcy 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, in- cluding 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 con- cerning the effect of the discharge as a total prohibi- tion 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 sec- tion. It is directed at waiver of discharge of a par- ticular debt, not waiver of discharge in toto as per- mitted 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 commu- nity 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 com- mencement of the case with respect to any discharge- able 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 dis- charge of the debt involved in the agreement has been waived. Thus, the prohibition on reaffirmation agree- ments 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 dis- charged 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-reaffir- mation provision. It permits reaffirmation in connec- tion 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. Editorial Notes REFERENCES IN TEXT The Bankruptcy Act, referred to in subsec. (b)(1), is act July 1, 1898, ch. 541, 30 Stat. 544, which was classi- fied 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 Oct. 22, 1994. 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 ap- proved Oct. 22, 1994. The Truth in Lending Act, referred to in subsec. (k), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, as amended, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. Sections 103, 127(b), and 128(a)(4) of the Act are classified to sections 1602, 1637(b), and 1638(a)(4), respec- tively, of Title 15. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1601 of Title 15 and Tables. Section 19(b)(1)(A)(iv) of the Federal Reserve Act, re- ferred to in subsecs. (k)(6)(B) and (m)(2), is classified to section 461(b)(1)(A)(iv) of Title 12, Banks and Banking. AMENDMENTS 2019—Subsec. (a)(1). Pub. L. 116–54, § 4(a)(9)(A)(i), in- serted ‘‘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 secur- ing the lien’’ for ‘‘security property’’ and ‘‘amount of the allowed secured claim’’ for ‘‘current value of the se- curity property’’ and inserted ‘‘must’’ before ‘‘make a single payment’’. Subsec. (k)(5)(B). Pub. L. 111–327, § 2(a)(19)(B), sub- stituted ‘‘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 ‘‘sec- tion 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 con- spicuous statement which advises the debtor that the agreement may be rescinded at any time prior to dis- charge 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 agree- ment is not required under this title, under nonbank- ruptcy 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 intro- Page 156 TITLE 11—BANKRUPTCY § 525 ductory 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), sub- stituted ‘‘rescission’’ for ‘‘recission’’. Subsec. (d). Pub. L. 103–394, § 103(b), inserted ‘‘and was not represented by an attorney during the course of ne- gotiating such agreement’’ after ‘‘this section’’ in in- troductory provisions. Subsec. (d)(1)(B)(ii). Pub. L. 103–394, § 501(d)(14)(C), in- serted ‘‘and’’ at end. Subsecs. (g), (h). Pub. L. 103–394, § 111(a), added sub- secs. (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 di- rected the substitution of ‘‘, 1228(a)(1), or 1328(a)(1)’’ for ‘‘or 1328(a)(1)’’ was executed by making the substi- tution 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 ref- erence to section 1228 of this title. Subsec. (d). Pub. L. 99–554, § 257(o)(1), inserted ref- erence to section 1228 of this title. Pub. L. 99–554, § 282, substituted ‘‘shall’’ for ‘‘may’’ be- fore ‘‘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), redesig- nated 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 liti- gation under section 523 of this title or provide for re- demption 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). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2019 AMENDMENT Amendment by Pub. L. 116–54 effective 180 days after Aug. 23, 2019, see section 5 of Pub. L. 116–54, set out as a note under section 101 of this title. EFFECTIVE DATE OF 2005 AMENDMENT Amendment by 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 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and, except with respect to amendment by section 111(a) of Pub. L. 103–394, amendment by Pub. L. 103–394 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 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 sec- tion 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 282 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. CONSTRUCTION Pub. L. 103–394, title I, § 111(b), Oct. 22, 1994, 108 Stat. 4117, provided that: ‘‘Nothing in subsection (a), or in the amendments made by subsection (a) [amending this section], shall be construed to modify, impair, or super- sede any other authority the court has to issue injunc- tions in connection with an order confirming a plan of reorganization.’’ § 525. Protection against discriminatory treat- ment (a) Except as provided in the Perishable Agri- cultural Commodities Act, 1930, the Packers and Stockyards Act, 1921, and section 1 of the Act entitled ‘‘An Act making appropriations for the Department of Agriculture for the fiscal year ending June 30, 1944, and for other purposes,’’ ap- proved July 12, 1943, a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, dis- criminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associ- ated, solely because such bankrupt or debtor is or has been a debtor under this title or a bank- rupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but be- fore the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act. (b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bank- rupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt— (1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act; (2) has been insolvent before the commence- ment of a case under this title or during the case but before the grant or denial of a dis- charge; or (3) has not paid a debt that is dischargeable in a case under this title or that was dis- charged under the Bankruptcy Act. (c)(1) A governmental unit that operates a stu- dent grant or loan program and a person en-