Sponsors (4)
The bill strengthens survivors' access to bankruptcy remedies and transparency/oversight of abuse-related liabilities—improving accountability and potential compensation—while increasing legal exposure and costs for debtors (especially nonprofits) and creating tradeoffs between public disclosure, victim privacy, and reputational risks for the accused.
Victims of childhood sexual abuse across the country can bring bankruptcy claims regardless of state statutes of limitation, enabling more survivors to seek compensation through bankruptcy estates.
Bankruptcy transparency is increased by preventing broad sealing of evidence and requiring courts to consider abuse-related policies and responses, improving oversight, accountability, and the chance of reforms to prevent future abuse.
Stronger financial examination rules—mandating independent forensic accountants and enabling fuller Rule 2004 examinations—give creditors and claimants clearer access to debtor and affiliate financials, improving asset tracing and allocation in abuse-related bankruptcies.
Prohibiting discharge for entities that committed or were grossly negligent in child sexual abuse exposes debtors—including charities and other nonprofits—to potentially unlimited liability, which could force some organizations into liquidation and reduce services to communities.
Requiring independent forensic accountants and broader Rule 2004 examinations increases complexity, litigation, and administrative costs in bankruptcy cases, which may prolong reorganizations and reduce recoveries for creditors or increase costs passed to taxpayers.
Expanded public access to case materials and limits on sealing can expose sensitive details about alleged abuse (even if names are redacted), creating privacy risks for victims and risking re‑traumatization or unwanted disclosure of intimate information.
Based on analysis of 3 sections of legislative text.
Modifies bankruptcy law and rules to limit sealing, preserve child sexual‑abuse claims, expand discovery, and require forensic accounting in chapter 11 cases involving abuse by or at tax‑exempt organizations.
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
Amends the Bankruptcy Code and Bankruptcy Rules to tighten how chapter 11 cases involving child sexual abuse are handled. It defines “sexual abuse of a child,” preserves victim claims regardless of state time limits, restricts sealing of evidence, limits evidentiary use of victim impact statements, expands examinations and document access, and requires independent forensic accounting in cases where the debtor is a tax‑exempt 501(c)(3) organization. The changes are aimed at preventing alleged abusers and institutions from using bankruptcy secrecy and release mechanisms to shield evidence or bar victim claims, while protecting victim identity when appropriate. The bill revises Rule 2004 discovery scope and Rule 9018 sealing rules to increase transparency in these cases and raises consent and release thresholds for third‑party releases in abuse matters.