PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.(a) Exclusions.—Section 541 of title 11, United States Code, is amended—(1) in subsection (b)—(A) in paragraph (4), by striking “or” at the end;(B) by redesignating paragraph (5) as paragraph (9); and(C) by inserting after paragraph (4) the following:“(5) funds placed in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) not later than 365 days before the date of the filing of the petition in a case under this title, but—“(A) only if the designated beneficiary of such account was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were placed in such account; “(B) only to the extent that such funds—“(i) are not pledged or promised to any entity in connection with any extension of credit; and“(ii) are not excess contributions (as described in section 4973(e) of the Internal Revenue Code of 1986); and“(C) in the case of funds placed in all such accounts having the same designated beneficiary not earlier than 119 STAT. 66 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000; “(6) funds used to purchase a tuition credit or certificate or contributed to an account in accordance with section 529(b)(1)(A) of the Internal Revenue Code of 1986 under a qualified State tuition program (as defined in section 529(b)(1) of such Code) not later than 365 days before the date of the filing of the petition in a case under this title, but—“(A) only if the designated beneficiary of the amounts paid or contributed to such tuition program was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were paid or contributed; “(B) with respect to the aggregate amount paid or contributed to such program having the same designated beneficiary, only so much of such amount as does not exceed the total contributions permitted under section 529(b)(7) of such Code with respect to such beneficiary, as adjusted beginning on the date of the filing of the petition in a case under this title by the annual increase or decrease (rounded to the nearest tenth of 1 percent) in the education expenditure category of the Consumer Price Index prepared by the Department of Labor; and“(C) in the case of funds paid or contributed to such program having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000;”; and(2) by adding at the end the following:“(e) In determining whether any of the relationships specified in paragraph (5)(A) or (6)(A) of subsection (b) exists, a legally adopted child of an individual (and a child who is a member of an individual’s household, if placed with such individual by an authorized placement agency for legal adoption by such individual), or a foster child of an individual (if such child has as the child’s principal place of abode the home of the debtor and is a member of the debtor’s household) shall be treated as a child of such individual by blood.”.(b) Debtor’s Duties.—Section 521 of title 11, United States Code, as amended by section 106, is amended by adding at the end the following:“(c) In addition to meeting the requirements under subsection (a), a debtor shall file with the court a record of any interest that a debtor has in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) or under a qualified State tuition program (as defined in section 529(b)(1) of such Code).”.