Sponsors (4)
The bill strengthens survivors' ability to pursue and be recognized in bankruptcy claims and increases financial transparency and creditor protections, but does so at the cost of higher bankruptcy costs and complexity, privacy and reputational risks for accused parties and possibly victims, and a heightened risk that some nonprofits may be liquidated due to nondischarge rules.
Survivors of childhood sexual abuse: can bring bankruptcy claims and gain greater access to evidence (limits on broad sealing), making it easier to assert and resolve abuse-related claims even where state time limits previously blocked recovery.
Victims of childhood sexual abuse: may submit victim impact statements (including pseudonymous statements), increasing the ability of survivors to have their harms formally recognized by bankruptcy courts and participate in proceedings.
Creditors, courts, and claimants: stronger financial oversight — courts must allow fuller Rule 2004 examinations and can require independent forensic accountants in abuse-related cases — improving transparency about debtor assets, affiliates, and liabilities and helping allocate estate resources more accurately.
Nonprofits and other debtors alleged to have committed or been grossly negligent in child sexual abuse: face exceptions to discharge that can create effectively unlimited liability, increasing the risk that some organizations will be forced into liquidation and reducing services to communities.
Creditors, estates, and taxpayers: broader examinations and required forensic accounting will increase litigation, administrative complexity, and professional fees, prolong reorganizations and raise costs borne by estates or stakeholders.
Alleged offenders and victims: expanded public access and exceptions to sealing may publicize allegations (or sensitive case materials) before criminal findings or careful redaction, risking reputational harm to those later exonerated and potential exposure of victim-sensitive details.
Based on analysis of 3 sections of legislative text.
Narrows bankruptcy secrecy and release tools in child sexual‑abuse cases: defines abuse, preserves claims regardless of state limits, restricts sealing, mandates forensic accounting for tax‑exempt debtors, and expands examinations.
Modifies bankruptcy law and bankruptcy procedure to close pathways that have allowed alleged child sexual abusers and organizations that sheltered them to use Chapter 11 secrecy and releases to limit or hide claims. It defines “sexual abuse of a child,” protects victim identity while barring sealing of abuse evidence, preserves victim claims regardless of state time limits, restricts how victim impact statements can be used as evidence, requires independent forensic accounting for tax‑exempt debtors in abuse cases, and expands court examination powers in chapter 11 reorganizations involving child sexual abuse.
Official title: To amend title 11 of the United States Code to address misuse of bankruptcy proceedings in cases of child sex abuse, and for other purposes.
Introduced April 29, 2026 by Deborah K. Ross · Last progress April 29, 2026