In the wake of heartbreaking revelations of clergy abuse within the Catholic Church, many U.S. dioceses have faced a painful and humbling reality: they must confront decades of hidden wounds by paying substantial settlements to victims—often through bankruptcy. These proceedings are not optional maneuvers to protect assets—they are, for many dioceses, the only viable path forward in offering justice to those who were gravely harmed by the Church’s own ministers.
The truth is devastating: thousands of survivors have come forward with credible claims, most involving abuse that occurred before the mid-1990s. According to Marie Reilly, a law professor at Penn State University who has studied Catholic diocesan bankruptcies, “The popular perception is that dioceses and archdioceses simply have tremendous amounts of money lying around to contribute to settlements. That’s far from the truth.” The reality is far more complex—and sobering.
To fund these enormous settlements, dioceses must make painful decisions. Often, they sell off property—churches that have closed, office buildings, even low-income housing. In the case of the Archdiocese of New Orleans, which just agreed to a staggering $180 million settlement, they’re moving to sell multiple housing properties. “They’ll sell the properties and use the proceeds to fund the settlement trust,” Reilly explained in an interview with Catholic News Agency.
In many cases, dioceses also tap into insurance policies, though this too has grown complicated. Before 1996, insurance companies often covered claims tied to employee misconduct—including clergy abuse. But after that year, revised policies excluded such coverage. Now, many dioceses, including Baltimore and New York, have sued insurers who are refusing to pay claims they are reportedly still responsible for.
Then there’s the most controversial element: parish contributions. While painful and even scandalous to many faithful Catholics, Reilly said it is “very common” for parishes to be required to pay into the settlement trust. Why? Because when dioceses file for bankruptcy, they typically seek to shield parishes from separate lawsuits. “In order to get that to happen,” she said, “parishes typically have to contribute to a settlement.”
In Rockville Centre, New York, parishes were asked to help fund a $323 million settlement. In Buffalo, parishes may be required to pay up to 80% of their unrestricted cash to fund a $150 million settlement. It is a heavy burden—one that inevitably falls on the backs of ordinary Catholics who had no part in the crimes.
So why go through bankruptcy at all? Because it’s often the only way to ensure victims receive anything at all. According to Reilly, “Outside of bankruptcy, we call it ‘the race of the diligent,’ where the speediest get the spoils.” In contrast, bankruptcy proceedings create a structured plan that distributes compensation more equitably, even if imperfectly.
Still, it’s hard not to feel a deep sense of sorrow—and outrage. The very Body of Christ has been wounded by the sins of those entrusted with shepherding souls. That dioceses must now dismantle properties, drain parish accounts, and battle insurance companies simply to provide a measure of justice to survivors is a scandal in itself. And yet, it is also a necessary penance.
As Catholics, we must not look away. We must pray for healing, demand accountability, and support the full truth—no matter how costly. Because the Church cannot be a sanctuary for abuse. It must be a refuge for the broken, the wounded, and the betrayed. Anything less is unworthy of the Gospel we proclaim.
