Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026

This bill strengthens consumer protections and corporate accountability in bankruptcy proceedings by making it easier for courts to dismiss or convert Chapter 11 bankruptcy cases filed in bad faith. It requires courts to dismiss cases that are objectively futile or filed in subjective bad faith, such as when debtors manufacture legal venues, seek tactical advantages, delay creditors, or cap liability to multiple creditors. The legislation also limits automatic stays that protect debtors from lawsuits, particularly in cases involving mass torts or claims affecting at least 100 individuals, and clarifies rules around setoffs and creditor recognition. These changes directly affect corporate debtors, creditors, and bankruptcy courts by tightening restrictions on abusive bankruptcy filings while preserving protections for final judgments entered before the law takes effect.