House Passes Involuntary Bankruptcy Measure

WASHINGTON-The House agreed to suspend the rules and approved by voice vote the Involuntary Bankruptcy Improvement Act of 2003 (H.R. 1529) last week. The legislation was introduced by House Judiciary Chairman Jim Sensenbrenner (R-Wis.) to stem abuses of the involuntary bankruptcy system. The bill amends the bankruptcy law to direct the court to dismiss involuntary bankruptcy petitions containing materially false, fictitious, or fraudulent statements and expunge all related court records. It also permits the court to prohibit any reporting of such abusive petitions or cases opened by the filing of the petition on a consumer credit report. Creditors can file involuntary bankruptcies to coerce debtors into workout plans, though some can be empty and harassing.