Bill · S. 4346· Senate(119-S-4346)
Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026
- Introduced
- 4/20/2026
- Last activity
- 4/20/2026 — Read twice and referred to the Committee on the Judiciary.
- Sponsored by
- Sheldon Whitehouse
- Cosponsors
- - 1 - 1
- Introduced
- In Committee
What this bill would do
This bill, titled the "Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026," aims to amend title 11 of the United States Code. It seeks to allow for the dismissal of Chapter 11 bankruptcy cases that are considered objectively futile or filed in subjective bad faith. The legislation introduces new standards for when a court should presume or conclusively presume a case was filed in bad faith, such as when a debtor manufactures venue or seeks a tactical litigation advantage. It also establishes new definitions for "protected claims" to affect how automatic stays are applied. Additionally, it places limitations on certain court orders to prevent them from overriding specific sections of the bankruptcy code.
Yes· 3 of 4
Does this give people more protection from unfair business practices?+6
The bill prevents corporations from using bad faith bankruptcy filings to cap liability for claims involving mass injury or contamination.
Would households on low incomes be better off under this?+4
The bill protects claims involving mass exposure to products or substances which often affect large numbers of people.
Is this likely to lift people out of poverty?+3
By limiting corporate tactics to cap liabilities, the bill may better protect the interests of large groups of claimants.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Prevention of Bad Faith Filings: The bill allows for the dismissal of bankruptcy cases that are "objectively futile" or filed in "subjective bad faith," which could prevent debtors from using the system improperly (Section 2).
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Limiting Tactical Advantages: It aims to prevent debtors from using bankruptcy to "gain a tactical litigation advantage" or "impose undue delay upon creditors" (Section 2).
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Protecting Creditors from Liability Caps: The bill targets attempts to use bankruptcy to "cap the total amount of the liability of the debtor to 2 or more creditors holding protected claims" when the debtor has enough assets to pay them (Section 2).
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Addressing Corporate Restructuring Issues: It creates a presumption of bad faith if a debtor underwent a "divisional merger or similar transaction changing the corporate structure" within four years of filing (Section 2).
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Clarifying Protected Claims: The bill provides a specific definition for "protected claim" which relates to claims affecting many individuals due to exposure to products or substances (Section 4).
Potential Negative Impacts for People
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Increased Burden of Proof on Debtors: Under certain determinations, the "debtor shall have the burden of proof" to contest the presumption of bad faith (Section 2).
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Presumption of Bad Faith: A court may "presume that a petition has been filed... in subjective bad faith" if the debtor manufactured the venue, and this can only be fought using "clear and convincing evidence" (Section 2).
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Conclusive Presumptions: The bill establishes several scenarios where a court shall "conclusively presume" a case was filed in bad faith, such as if the debtor lacks a "valid reorganizational purpose" (Section 2).
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Restrictions on Court Orders: The bill limits the ability of a court to issue orders that might nullify specific bankruptcy protections (Section 3).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Low Income Households+4Good For Urban Residents+2
- Economy And Finance
- Improves Consumer Protection+6
- Social Issues And Justice
- Improves Poverty Reduction+3
- 4/20/2026
- Read twice and referred to the Committee on the Judiciary.
- 2 Cosponsors added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Richard DurbinDemocrat · Illinois
Josh HawleyRepublican · Missouri