Medical Debt Bankruptcy Reform Bill

: Chris Lee Law Firm

  Filed under: News

Medical debt is one of the leading reasons for people seeking debt relief through bankruptcy protection, according to experts. With the cost of health insurance premiums, copayments, and costs of prescriptions soaring in recent decades, many families are simply underinsured.  As people work to get themselves out of crushing medical debt, some lawmakers at the Capitol are hoping to bring a new era of consumer assistance.

Legislation Pending

Earlier this month, the Medical Bankruptcy Fairness Act was introduced into the Senate. This bill is aimed to help ease the financial burden people experience often as a result of medical debt. Senator Sheldon Whitehouse (D-RI) said, “The vast majority of bankruptcies are tied to medical debt- and that was true even before the pandemic where millions of Americans lost their jobs and were kicked off their employer’s health insurance plan.”

The bill’s five cosponsors are targeting the bill in efforts to make it easier for struggling Americans to discharge student loans and medical debt through bankruptcy.  The bill creates more accommodating bankruptcy process for Americans forced into bankruptcy because of medical debt. Specifically, the bill calls for :

  • Waive procedural hurdles like credit counseling that make little sense for those pushed into bankruptcy through no fault of their own;
  • Permit the discharge of student loans, which currently cannot be erased in bankruptcy for most debtors; and
  • Provide families a greater chance of keeping their homes in states that have weak debtor protections by allowing the retention of at least $250,000 of home equity.

If you are experiencing debt problems, whether medical or non-medical, contact our Dallas bankruptcy office to learn more about how we can help you get out of debt and back in financial control.


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