June 16 , 2003

On June 10th, the House, by a voice vote, passed H.R. 1529, the "Involuntary Bankruptcy Improvement Act of 2003," a bill which was introduced by Representative
Sensenbrenner (R-Wis.) on April 1st to stop the increasing trend of frivolously filed involuntary bankruptcy cases. Sensenbrenner believes that such cases have the potential
to destroy an innocent person's credit and reputation in the community.

Judiciary Chairman Sensenbrenner (R-WI) introduced H.R. 1529 after learning that Ozaukee County Sheriff Maury Straub and other officials were being harassed under a provision of current law that allows someone to initiate an "involuntary" bankruptcy proceeding on behalf of another person.

The sheriff got a letter from his credit card company that his card was not usable, the Milwaukee Journal Sentinel reported, while another person had her credit card rejected while grocery shopping.

The bill would require bankruptcy courts to remove from their records all details related to involuntary filings in cases where the court dismisses the filing. The bill also would bar credit reporting agencies from issuing reports containing any reference to such filings if the court dismisses the bankruptcy petition.

According to the Administrative Office of the U.S. Courts, 796 involuntary bankruptcy filings were submitted last year. That is less than 1% of the record 1.57 million applications submitted for 2002.

Senator Russ Feingold (D-WI) introduced a companion bill (S1128) last month that has been referred to the Senate Judiciary Committee. The House bill was approved by the House Judiciary Committee last week.