Closing Bankruptcy Loopholes for Child Predators Act of 2026

Key Points

• The bill prevents people and organizations from using bankruptcy to discharge debts arising from child sexual abuse. Anyone who directly committed abuse or acted with gross negligence toward a child's safety cannot have those legal debts forgiven, regardless of whether they are an individual, corporation, nonprofit, or other entity.
• Victims gain a formal voice in bankruptcy proceedings. Courts must hold a conference within 60 days of the claims deadline so survivors can share written, oral, video, or audio statements describing how the abuse affected them. These statements cannot be used as evidence in the case, encouraging survivors to speak freely.
• Courts are barred from sealing evidence of alleged child abuse crimes, though victim identities remain protected. This transparency requirement means the public can see evidence against the accused unless the alleged offender is found not guilty in a court of law.
• Nonprofit organizations (501(c)(3) entities like charities and religious groups) facing child abuse claims must have an independent forensic accountant review their assets. This is designed to prevent them from hiding money or property that should go toward compensating victims.
• State statutes of limitation no longer apply to child sexual abuse claims filed in bankruptcy court. Survivors can seek compensation through the bankruptcy process even if their state's filing deadline has long passed.
• Before a court can release third parties (like affiliated organizations or individuals) from liability, at least 90% of voting victims must approve the plan. This is a much higher bar than the standard 75% threshold and applies specifically to nonprofit entities resolving child abuse claims.

Votes

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Related Bills

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