H.R. 8589

119 HR 8589 IH: Closing Bankruptcy Loopholes for Child Predators Act of 2026
 U.S. House of Representatives
 2026-04-29
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 I  119th CONGRESS  2d Session  H. R. 8589  IN THE HOUSE OF REPRESENTATIVES   April 29, 2026   Ms. Ross  (for herself,  Ms. Tenney ,  Mrs. Sykes , and  Ms. De La Cruz ) introduced the following bill; which was referred to the  Committee on the Judiciary    A BILL
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.
1.
Short title
This Act may be cited as the   Closing Bankruptcy Loopholes for Child Predators Act of 2026  .
2.
Amendments
(a)
Amendments
Title 11, United States Code, is amended—
(1)
in section 101—
(A)
 by redesignating paragraphs (51B), (51C), and (51D) as paragraphs (51C), (51D), and (51E), respectively, and
(B)
 by inserting after paragraph (51A) the following:
(51B)
The term ‘sexual abuse of a child’ means any act that—
(A)
constitutes a violation of—
(i)
section 1589, 1590, 1591, 2241(c), 2242, 2243, 2251, 2251A, 2252, 2252A, 2260, 2421, 2422, or 2423, 2258, or 2258A, of title 18;
(ii)
section 20341 of title 34; or
(iii)
a non-Federal law that is similar to a law described in clause (i); and
(B)
by reason of the conduct prohibited, a person who, while a minor, was aggrieved.”;
 ;
(2)
in section 1109—
(A)
by adding at the end of subsection (b) the following:
    In any case in which a claim is filed against the debtor arising out of the alleged sexual abuse of a child, the court shall hold a conference within 60 days of the deadline by which proofs of claim must be filed to consider victim impact statements.  .
(B)
by adding at the end the following:
(c)
The sole purpose of victim impact statements shall be to increase engagement and understanding between the bankruptcy court and victims or survivors of child sexual assault. To encourage candor, and thus enhance the utility of victim impact statements, the information provided through victim impact statements is not, and shall not be used as, evidence by any person in the case.
 ;
(3)
in section 1101—
(A)
in paragraph (2) by striking the period at the end and inserting  ; and , and
(B)
by adding at end the following:
(3)
 victim impact statement  means a voluntary written, oral, video, or audio statement, submitted to, or presented to the court in the name of the victim or under a pseudonym, describing the emotional, physical, familial, or financial impact suffered as a result of the sexual abuse of the victim who is a creditor of the debtor in a chapter 11 proceeding.
 ;
(4)
in section 541 by adding at end the following:
(g)
In all cases regarding debts or other financial liability arising from allegations of sexual abuse of a child and involving debtors that are organizations described in  section 501(c)(3)  of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, the Court shall engage the services of an independent forensic accountant to review the assets and interests of such debtor, and any nondebtor sought to be released from liability in a proposed reorganization plan, and require preparation of a report to assist the Court with ensuring that such assets and interests are properly included or excluded from the estate.
 ;
(5)
in section 107—
(A)
in subsection (b) by adding at the end the following:
(4)
This subsection shall not apply to cases regarding debts or other financial liability arising from potential liability stemming from allegations of sexual abuse of a child except to the extent necessary to protect the identity and personal information of the individual alleging to have been abused unless the alleged offender is found not guilty of abuse in a court of law.
 ; and
(B)
by adding at the end the following:
(d)
No court order shall seal any evidence of alleged crimes relating to the sexual abuse of a child other than to protect the identity and personal information of the individual alleging to have been abused unless the alleged offender is found not guilty of abuse in a court of law.
 ;
(6)
in section 362(b)(2)(A)—
(A)
in clause (iv) by striking  or  at the end;
(B)
in clause (v) by adding  or  at the end; and
(C)
by adding at end the following:
(vi)
concerning the sexual abuse of a child or related claims;
 ;
(7)
in section 524(g)(2)(B)—
(A)
in clause (i) by inserting  or relating to the sexual abuse of a child:  after  reorganization ;
(B)
 after clause (ii) by adding the following:
(iii)
Notwithstanding any provision of law to the contrary, in any case regarding potential debts or other financial liabilities arising from allegations of sexual abuse of a child—
(I)
No third-party release shall be approved by the court without affirmative consent of both the debtor and at least ninety percent of the creditors in interest entitled to vote and who do vote. The court shall ensure that the parties have been given adequate notice and opportunity to provide or withhold such consent.
(II)
Any third-party seeking the benefit of a release under this chapter shall provide sufficient information to allow an average creditor to make an informed decision about the release.
 ;
(C)
 in clause (ii)—
(i)
by striking  subject  and all that follows through  that—  and inserting the following:
    ;      except in the case of a plan reorganization filed by a debtor organized described in  section 501(c)(3)  of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code to resolve claims alleging sexual abuse of a child, subject to subsection (h), the court determines that—  ; and
(ii)
by amending subclause (IV)(bb) to read as follows:
(bb)
a separate class or classes of claimants whose claims are to be addressed by a trust described in clause (i) is established and votes, by at least 75 percent of those voting, in favor of the plan or, if the debtor is an organization described in  section 501(c)(3)  of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code which has filed a case under chapter 11 of this title to resolve claims alleging sexual abuse of a child, by at least 90 percent of a separate class or classes of the claimants whose claims are to be addressed by a trust described in clause (i).
  ;
(D)
by adding at the end of section 524(g)(4)(A)(ii) the following:
(V)
the third party being an affiliate of the debtor.
  ; and
(E)
by adding at the end of section 524(g)(1)(C) the following:
 Notwithstanding any other provision of this chapter, if the debtor is an organization described in  section 501(c)(3)  of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code which has filed for a case under chapter 11 of this title to resolve claims alleging sexual abuse of a child, any third party who is identifiable from the terms of a plan of reorganization (by name or as part of an identifiable group) and is alleged to be directly or indirectly liable for the conduct of, claims against, or demands on the debtor, may be released from such liability if a separate class or classes of the claimants whose claims are to be addressed by a trust described in clause (i) is established votes, by at least 90 percent of those voting, in favor of the plan.  ;
(8)
in section 1111 by adding at the end the following:
(c)
Claims relating to sexual abuse of a child are deemed timely filed regardless of and notwithstanding the State statute of limitation otherwise applicable to the claims
 ;
(9)
in section 523(a)(20)—
(A)
by designating subsections (b), (c), (d), and (e) as subsections (c), (d), (e), and (f), respectively; and
(B)
by adding after subsection (a) the following:
(b)
No debtor shall receive a discharge under section 727, 1141, 1192 [1] 1228(a), 1228(b), or 1328(b) of this title, or qualify for any form of discharge, injunction, or release under a plan of reorganization or otherwise, with respect to any claim or debt arising from the sexual abuse of a minor in instances where such debtor was either responsible for the sexual abuse of a minor directly or acted with gross negligence for the safety of the abused minor(s) at issue. This shall apply to all debtors regardless of whether such debtors are an individual, a corporation. a limited partnership, a nonprofit entity, or any other person or entity seeking relief under this title.
  and
(10)
in section 1181 by adding at the end the following:
(d)
Prohibition on claims related to child sexual abuse
Notwithstanding any other provision of law, no subchapter 5 filings shall be permitted for claims arising from or related to child sexual abuse.
 .
(b)
Clerical amendment
The table of sections for  chapter 1  of title 11, United States Code, is amended by adding at the end the following:
113. Suspension of stay without consent.
  .
3.
Amendments to the Federal rules of bankruptcy procedure
The Federal Rules of Bankruptcy Procedure (11 U.S.C. app.) are amended—
(1)
in rule 2004—
(A)
by striking the period at the end of (b)(2)(C) and inserting  ; and ;
(B)
by adding after (b)(2)(C) the following:
(D)
In a reorganization case under chapter 11 of the Code related to the alleged sexual abuse of a child, the examination shall also relate to the abuse allegations against the debtor and any affiliated entity, remedial policies and responses to those allegations, information on the debtor or an affiliated entity’s finances and financial projections, and any other matter relevant to the case or to the formulation of a plan.
 ; and
(C)
by adding at the end of subsection (c) the following:
    In a reorganization case under chapter 11 of the Code related to the alleged sexual abuse of a child, debtor attendance for examination and the production of documents or electronically stored information is required.  ; and
(2)
in rule 9018 by adding at the end the following:
(c)
In no respect shall any court order seal any evidence of alleged crimes relating to the sexual abuse of a child other than to protect the identity and personal information of the individual alleging to have been abused unless the alleged offender is found not guilty of abuse in a court of law.
 .