The Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026 aims to prevent frivolous bankruptcy filings by dismissing cases.

The Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026 amends the U.S. Bankruptcy Code to allow courts to dismiss Chapter 11 bankruptcy cases if they are objectively futile or filed in subjective bad faith. The bill sets a 24-month limit for conversion or dismissal of such cases and requires courts to consider whether a creditors' committee supports dismissal. It also introduces a presumption that a case is in bad faith if the debtor manufactured the venue or if the filing aims to gain a tactical advantage, impose undue delay, or cap liability.

The Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026 aims to prevent frivolous bankruptcy filings by dismissing cases.

The Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026 amends the U.S. Bankruptcy Code to allow courts to dismiss Chapter 11 bankruptcy cases if they are objectively futile or filed in subjective bad faith. The bill sets a 24-month limit for conversion or dismissal of such cases and requires courts to consider whether a creditors' committee supports dismissal. It also introduces a presumption that a case is in bad faith if the debtor manufactured the venue or if the filing aims to gain a tactical advantage, impose undue delay, or cap liability.