New Bankruptcy Rules Block Sale of Your DNA Data Without Written Consent, Effective Immediately

The newly introduced Don’t Sell My DNA Act is a big deal for anyone who has ever spit in a tube or signed up for a genetic testing service. This legislation doesn't touch the companies directly, but it slams the door shut on a huge loophole: what happens to your genetic data when those companies, or any entity holding that data, go bankrupt.

This Act immediately updates federal bankruptcy law (Title 11) to treat genetic information—defined using the existing standard from the Genetic Information Nondiscrimination Act of 2008—as highly sensitive. The main purpose is simple: prevent bankruptcy trustees from treating your biological blueprint as just another asset to be liquidated to pay off debts. This protection applies to all open, new, and reopened bankruptcy cases the moment the Act is signed, meaning the rules change right now for ongoing proceedings.

Your DNA Is Not a Fire Sale Asset

Imagine a genetic testing company files for Chapter 11. Historically, their database of millions of customer DNA profiles could be sold off to the highest bidder—say, a pharmaceutical company—to generate cash for creditors. This bill puts an immediate stop to that. Under the new rules, a trustee cannot sell or lease genetic information unless every single person whose data is involved gives their affirmative written consent after the bankruptcy case has started (Sec. 2).

This means if you used a service five years ago and they go bust today, the trustee needs to track you down and get your signature before selling your data. If they can’t get 100% consent, the data can't be sold. This is a massive win for privacy, ensuring that your most personal information isn't commercialized against your will just because a company mismanaged its finances. It also requires the court to confirm that any proposed sale doesn't violate existing non-bankruptcy laws, adding another layer of scrutiny.

The Mandate to Delete Unsold Data

What happens to the genetic data that the trustee can’t sell because they couldn't get everyone's consent? They can't just leave it sitting on a server. The Act creates a mandatory cleanup duty: if the genetic information isn't sold or leased, the trustee must delete it using court-approved methods (Sec. 2). The bill even suggests following standards like the National Institute of Standards and Technology’s Guidelines for Media Sanitization. This means the data has to be securely wiped, not just dragged to a digital trash bin.

For the average person, this is great news. It means that even in the chaos of a corporate collapse, your genetic profile is protected, and if it's not going to be used, it must be destroyed securely. It removes the lingering risk of sensitive data being forgotten or accidentally exposed years later.

The Friction Point: Administrative Headaches

While this is a clear benefit for consumers, it does create a massive administrative challenge for bankruptcy trustees and, potentially, creditors. The requirement for universal, affirmative written consent from every data subject is the biggest hurdle. If a database contains the genetic information of millions of people, obtaining 100% consent is practically impossible. This effectively means that genetic data assets are likely to be unsellable in bankruptcy.

This is a feature, not a bug, for privacy advocates, but it means creditors lose a potentially valuable asset that could have offset debts. Trustees will have a much harder time liquidating these assets, which could slow down the bankruptcy process and increase the administrative burden. However, for those of us who value control over our biological data, this trade-off is likely worth the increased friction in the legal system.