Closing Bankruptcy Loopholes for Child Predators Act of 2026
Sponsored By: Representative Ross, Deborah K. [D-NC-2]
Introduced
Summary
Protect child sexual abuse survivors in bankruptcy by defining sexual abuse, limiting releases and discharges, and giving victims a greater role in Chapter 11 reorganizations.
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- Survivors: Victims may submit voluntary impact statements in writing, audio, video, or orally, including under a pseudonym. The court must hold a conference within 60 days after the proofs-of-claim deadline to consider those statements and claims are treated as timely regardless of state statutes of limitations.
- Nonprofits and creditors: Reorganizations by 501(c)(3) debtors must use an independent forensic accountant to review assets and any nondebtor proposed for release. Third-party releases tied to child sexual abuse require the debtor's affirmative consent and at least 90% approval from voting creditors with adequate notice.
- Debtors and procedure: Debtors who were directly responsible or grossly negligent in the safety of a minor cannot receive a discharge for child sexual abuse claims and Subchapter V filings are barred for those claims. Bankruptcy rules are changed to broaden examinations, require debtor attendance for document and electronic evidence production, and limit sealing of evidence to identity protections unless the accused is found not guilty.
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Bill Overview
Analyzed Economic Effects
10 provisions identified: 5 benefits, 1 costs, 4 mixed.
Claims timely despite state time limits
If enacted, claims relating to sexual abuse of a child would be deemed timely filed in bankruptcy regardless of any State statute of limitations. Survivors could still file bankruptcy claims even if state time limits have expired. This rule would take effect upon enactment.
Automatic stay won't block abuse claims
If enacted, the bankruptcy automatic stay would not stop lawsuits or other actions about child sexual abuse. Survivors and creditors could continue litigation even if the alleged offender files for bankruptcy. This exception would take effect on enactment and apply whenever the matter concerns sexual abuse of a child.
Bankruptcy cannot wipe out child‑abuse debts
If enacted, debts or claims from sexual abuse of a minor would not be dischargeable in bankruptcy when the debtor was directly responsible or acted with gross negligence. The rule would apply to individuals, corporations, nonprofits, and other entities. This prohibition would take effect upon enactment.
Limits on sealing bankruptcy evidence
If enacted, courts could only seal bankruptcy records in child sexual‑abuse cases to protect a victim's identity and personal information. Evidence of the alleged crime would stay public except for limited identity protections unless the alleged offender is later found not guilty in court. The change aims to increase transparency while protecting victim privacy.
Subchapter V barred for abuse cases
If enacted, small business debtors could not use Subchapter V of Chapter 11 when their filings involve claims arising from or related to child sexual abuse. This rule would take effect on enactment and would bar the small‑business streamlined reorganization route in those cases.
Expanded debtor exams in Chapter 11
If enacted, Rule 2004 examinations in Chapter 11 cases about child sexual abuse would have broader scope. Exams would cover abuse allegations, affiliated entities, remedial policies, finances, and projections. The debtor would have to attend and produce documents and electronic records responsive to the examination.
Forensic accounting for nonprofit debtors
If enacted, bankruptcy courts would hire an independent forensic accountant when a 501(c)(3) nonprofit faces child sexual‑abuse claims. The accountant would review the debtor's assets and any nondebtor proposed for release and prepare a report to help the court decide what belongs in the bankruptcy estate.
Tougher rules for third‑party releases
If enacted, third‑party releases in cases involving child sexual abuse would be much harder to approve. A release would require the debtor's affirmative consent and at least 90% of voting creditors to agree. Affiliates would be treated as potential releasees, third parties must give enough information for an average creditor, and trust-class votes generally need 75% approval but 90% when a 501(c)(3) filed to resolve abuse claims.
Victim impact conferences in court
If enacted, bankruptcy courts must hold a conference within 60 days after the proofs‑of‑claim deadline in Chapter 11 cases with child sexual‑abuse claims to consider victim impact statements. Victims could submit voluntary written, oral, audio, or video statements in their name or a pseudonym. Those statements would not be admissible as evidence.
Defines child sexual‑abuse in law
If enacted, the bill would add a statutory definition of "sexual abuse of a child." The definition ties covered conduct to a list of federal criminal statutes and to similar state laws, and applies when the victim was a minor. This definition would guide all the bill's bankruptcy rules.
Sponsors & CoSponsors
Sponsor
Ross, Deborah K. [D-NC-2]
NC • D
Cosponsors
Rep. Tenney, Claudia [R-NY-24]
NY • R
Sponsored 4/29/2026
Rep. Sykes, Emilia Strong [D-OH-13]
OH • D
Sponsored 4/29/2026
Rep. De La Cruz, Monica [R-TX-15]
TX • R
Sponsored 4/29/2026
Roll Call Votes
No roll call votes available for this bill.
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