Bankruptcy Improvements Act of 1981

Bankruptcy Improvements Act of 1981 - Amends title 11 of the United States Code (Bankruptcy) to establish an eligibility test for liquidation bankruptcy relief based on the individual petitioner's ability to pay a reasonable portion of his or her debts out of future income.

Permits the court to dismiss a bankruptcy case under chapter 7 (liquidation) upon the motion of any party in interest filed not later than 30 days after the meeting of creditors, and after notice and a hearing, if the debtor is ineligible for relief under such title.

Requires the bankruptcy judge to preside at any meeting of creditors and to perform such additional judicial duties as may be required.

Declares that the value of the creditor's interest in the estate's interest in property shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor's interest. Declares that the value of consumer goods which the debtor seeks to redeem in liquidation shall be presumed to be the established resale market price, or the original purchase price reduced by straight line depreciation over eight years, whichever is greater.

Requires the debtor in bankruptcy cases to file a statement of income and expenses. Requires the debtor, if the debtor's schedule of assets and liabilities includes consumer debts which are secured by property of the estate, to file and serve upon each creditor holding such security and the trustee, a statement expressing the debtor's intention with respect to retention or surrender of the collateral.

Requires the debtor, at or before the meeting of creditors provided for by such title, to perform his intention with regard to such secured creditors.

Repeals the provisions concerning exempt property and makes the States responsible for establishing exemptions to bankruptcy proceedings.

Makes any debt which was incurred on or within 90 days before the date of the filing of a petition under such title nondischargeable.

Allows creditors to enforce liens which have not been voided in bankruptcy.

Permits reaffirmation of consumer debts subject to the debtor's right to rescind any such agreement within 60 days or until a discharge is received, whichever occurs later, by giving a written notice of rescission to the creditor.

Declares that at the meeting of creditors the court shall inform the debtor of the nature and effect of a discharge.

Eliminates the trustee's power to avoid liens or recover payments made within 90 days of filing a petition in bankruptcy (within one year in the case of an insider) unless the creditor had reasonable cause to believe the debtor was insolvent.

Permits the court, upon notice and hearing, to require a creditor to accept payments in redemption of the value of a claim secured by a nonpossessory, nonpurchase money security interest in tangible personal property, over a reasonable period not to exceed five years, if such tangible personal property consists of specified objects.

Allows a creditor, upon ten days notice to the debtor and co-debtor, to collect any portion of a debt from the co-debtor which is not being paid by the debtor through the adjustment of debts of such debtor with a regular income.

Requires payments under an adjustment of debts payment plan to commence at the time of the filing of the plan. Provides for the return of such funds after deducting the costs of administration if no plan is confirmed.

Provides for the separate classification of co-debtor claims and non-dischargeable claims and authorizes payment of them under an adjustment of debts payment plan.

Allows a debtor to choose such a repayment plan of up to five years.

Bases such repayment upon the debtor's ability to repay out of future income after taking into account the basic living necessities for the debtor and dependents.

Provides for an early discharge of debts where at least 70 percent of all allowed unsecured claims are paid.

Permits a hardship discharge of otherwise non-dischargeable debts to the extent the debtor attempted to pay such debts under an adjustment of debts payment plan.