Sponsors (5)
The bill strengthens privacy protections for individuals' genetic data in bankruptcy (notice, deletion, and legal safeguards) at the cost of higher compliance and administrative burdens, potential delays in bankruptcy processes, and reduced asset recoveries for creditors.
People whose genetic data is part of a bankruptcy estate gain explicit statutory privacy protection because genetic information is treated as a protected category under the bankruptcy code, limiting how that data can be sold or used.
Individuals whose genetic data could be transferred from an estate will receive prior written notice before any sale, lease, or use of that data, giving them the opportunity to be informed and to pursue remedies.
Trustees and debtors in possession must securely delete any estate-owned genetic data that is not sold, reducing the risk of unauthorized retention and future misuse of highly sensitive health/genetic information.
Creditors and other estate stakeholders may receive lower recoveries because restrictions on selling or retaining genetic data can reduce the market value of estate assets, potentially lowering distributions to creditors and harming recoveries.
Trustees, debtors in possession, and estates will face increased compliance and operational costs to implement secure deletion methods (e.g., NIST SP 800-88), raising administrative burdens for estate administration.
Requiring notice to every person whose genetic data could be subject to sale or lease will slow transaction processes and increase administrative workload for estates, potentially delaying distributions and prolonging bankruptcy administration.
Based on analysis of 2 sections of legislative text.
Adds genetic information to bankruptcy-protected data, requires notice and court findings before sale/lease, and mandates secure deletion of estate-held genetic data.
Introduced May 22, 2025 by John Cornyn · Last progress May 22, 2025
Adds genetic information to categories of personal data given special treatment in bankruptcy and creates rules to limit its sale or use by a bankruptcy estate. The bill requires notice to people whose genetic data would be sold or leased, directs courts to make findings before such transfers, and requires trustees or debtors to securely delete estate-held genetic data that is not sold or transferred using court-prescribed methods (including industry-standard data-wiping guidance). The changes take effect on enactment and apply to cases pending, commenced, or reopened on or after enactment.