H.R. 10724House119th Congress (2025-2027)In Committee

To amend title 11, United States Code, to clarify the rules for the exceptions to the discharge of the debt of an individual debtor, and for other purposes.

AI-Generated Summary

Updated October 7, 2026 at 11:43 AM UTC

This bill updates the bankruptcy code to make clearer which types of fraud or wrongdoing prevent an individual debtor’s debts from being wiped out. It narrows the language around false pretenses and adds specific categories of theft and fiduciary misconduct as non‑dischargeable. The changes affect anyone filing for personal bankruptcy.

Key Provisions

Clarifies that false pretenses, false representations, or actual fraud by the debtor are exceptions to discharge, except when the false statement only concerns the debtor’s or an insider’s financial condition.
Adds the phrase “by the debtor” after the word “use” in a related subparagraph to specify that the fraudulent act must be done by the debtor.
Specifies that fraud or defalcation committed while acting in a fiduciary role, embezzlement, and larceny are all non‑dischargeable offenses for individual debtors.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on the Judiciary.

Judiciary Committee

October 5, 2026

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HouseIntro Referral

Introduced in House

October 5, 2026

HouseIntro Referral

Referred to the House Committee on the Judiciary.

Judiciary Committee

October 5, 2026

Bill Text

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Introduced in HouseIssued October 5, 2026

119th CONGRESS

2d Session

H. R. 10724

IN THE HOUSE OF REPRESENTATIVES

October 5, 2026

Mr. Correa (for himself and Ms. Lee of Florida) introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 11, United States Code, to clarify the rules for the exceptions to the discharge of the debt of an individual debtor, and for other purposes.

Clarification of exception to discharge of individual debtor

Section 523(a) of title 11, United States Code, is amended—

(1)

in paragraph (2)—

(A)

by amending subparagraph (A) to read as follows:

(A)

false pretenses used by the debtor, a false representation made by the debtor, or actual fraud committed by the debtor, other than a statement respecting the debtor's or an insider's financial condition;

;

(B)

in subparagraph (B), in the matter preceding clause (i), by inserting after use the following: , by the debtor,; and

(2)

by amending paragraph (4) to read as follows:

(4)

for, when committed by the debtor—

(A)

fraud or defalcation while acting in a fiduciary capacity;

(B)

embezzlement; or

(C)

larceny;