Sponsors (4)
The bill expands survivors' access to bankruptcy remedies and strengthens transparency and accountability in abuse-related bankruptcies, but does so at the cost of greater bankruptcy complexity and expense, heightened risks to nonprofit viability, and increased privacy and reputational risks for victims and the accused.
Victims of childhood sexual abuse can pursue bankruptcy claims regardless of state statutes of limitation, enabling more survivors to seek compensation through debtor insolvency processes.
Victims may submit victim impact statements (including pseudonymous submissions), increasing court engagement and formal recognition of harms even when criminal prosecutions are unavailable or time-barred.
Bankruptcy procedures and oversight are strengthened—courts are prevented from broadly sealing evidence, Rule 2004 examinations and substantive inquiries into policies/responses are enabled, and independent forensic accountants are required for 501(c)(3) debtors with abuse liabilities—improving transparency, asset discovery, and institutional accountability.
Organizations that committed or were grossly negligent in child sexual abuse may be barred from discharging related liabilities, exposing charities and other debtors to effectively unlimited claims and increasing the risk that some nonprofit providers will liquidate and stop services.
Broader examinations, mandatory forensic accounting, and less-sealed records will increase bankruptcy complexity, litigation, and administrative costs, prolonging reorganizations and raising expenses borne by creditors, estates, and potentially taxpayers.
Expanded public access and exceptions to sealing may publicize allegations before criminal findings, risking reputational harm to accused individuals or organizations if allegations are unproven or later disproven.
Based on analysis of 3 sections of legislative text.
Alters bankruptcy law and rules to define child sexual abuse, restrict sealing of related evidence, limit evidentiary use of victim statements, require forensic reviews for some nonprofits, and toll timing bars.
Introduced April 29, 2026 by Deborah K. Ross · Last progress April 29, 2026
Changes bankruptcy law and court rules to make it harder for people and organizations accused of child sexual abuse to hide evidence or use bankruptcy to limit survivor claims. It defines “sexual abuse of a child,” limits when victim impact statements can be used as evidence, requires independent forensic accounting in certain nonprofit debtor reorganizations, loosens timing rules so abuse claims aren’t barred by state statutes of limitation, and restricts sealing of evidence except to protect a victim’s identity.