Federal bill would allow child abuse victims to seek evidence amid bankruptcy proceedings

A proposed federal bill would allow child abuse victims to continue seeking evidence in civil suits even amid bankruptcy filings, a rule that could have significant consequences for U.S. Catholic dioceses facing abuse lawsuits.

The bill, proposed by a bipartisan group of U.S. congresswomen and announced on April 29, would move to “address misuse of the bankruptcy system by organizations facing lawsuits for child sex abuse,” according to a press release from Rep. Deborah Ross, D-North Carolina.

Ross noted that bankruptcy filings, including those by U.S. dioceses facing voluminous child abuse allegations, trigger stays in civil litigation that block plaintiffs from further discovery while the Chapter 11 process plays out.

Ross said U.S. bankruptcy law contains “unacceptable loopholes” that allow organizations to “avoid the consequences of their negligence and abuse.”

The proposed bill would allow abuse victims to continue the discovery process even amid bankruptcy filings. It would also allow victims to submit impact statements within the Chapter 11 proceedings themselves.

The bill would also “require forensic accountants to assess the debtor’s estate and nondebtor holdings in child sex abuse cases.”

The measure, titled the “Closing Bankruptcy Loopholes for Child Predators Act,” was previously introduced in 2024, though it stalled in the House of Representatives.

Bankruptcy generally offers more payouts for victims

Numerous U.S. dioceses have filed for bankruptcy in recent years, particularly amid the passage of state-level laws that have expanded or removed the statute of limitations for filing child abuse claims.

Marie Reilly, a professor of law at Penn State University and an expert in bankruptcy litigation, told EWTN News in 2025 that bankruptcy filings are generally advantageous not just for a diocese but for those seeking compensation from it.

The alternative, she said, is for a plaintiff to “prove their case on a trial of evidence against the diocese,” which requires considerably more effort with less chance of payment.

Committees of survivors usually agree that bankruptcy is the better option, she said, insofar as it ensures that everyone gets some form of compensation instead of just a few big payouts being limited to the quickest litigants.

“Outside of bankruptcy, we call it ‘the race of the diligent,’ where the speediest get the spoils,” she told EWTN News.

Still, the U.S. representatives sponsoring the latest bankruptcy reform bill argue that such procedures should not limit victims from being able to seek evidence in their suits against organizations including Catholic dioceses.

Rep. Emilia Sykes, D-Ohio, said in the press release that abuse victims “deserve justice, accountability, and transparency at every step of the process.”

“No one should be able to use bankruptcy proceedings as a shield to avoid responsibility,” she said, arguing that the bill “closes those loopholes so survivors can continue their pursuit of justice and bad actors are held fully accountable.”

Source: https://www.ewtnnews.com/world/us/federal-bill-would-allow-child-abuse-victims-to-seek-evidence-amid-bankruptcy-proceedings