Washington, DC – Senators Sheldon Whitehouse (D-RI) and Elizabeth Warren (D-MA) have introduced legislation to help families burdened by the costs of illness and injury. The Medical Bankruptcy Fairness Act of 2014 (S. 2471) would make the bankruptcy process more forgiving for those driven to insolvency by medical issues.
“Even families with quality health insurance coverage can be bankrupted by an illness or injury that causes lost work and income,” said Whitehouse, who introduced similar legislation in a previous session of Congress. “Bankruptcy is meant to give people a fresh start and should not be a source of added hardship in a time of need. This legislation will make our bankruptcy system fairer for families who find themselves in financial straits through no fault of their own, and I thank Senator Warren for joining me in this effort.”
“Far too many families are driven into bankruptcy in the aftermath of a serious medical problem, when hospital bills pile up or a family member loses a job,” said Senator Warren. “I’m pleased to join Senator Whitehouse to introduce the Medical Bankruptcy Fairness Act. This bill will provide some relief for families facing crushing medical debt and help them get back on their feet through a fairer bankruptcy process.”
The Medical Bankruptcy Fairness Act would offer more accommodative treatment in bankruptcy for individuals with large medical bills or who lose income due income due to an illness or injury or to care for a family member. It would also cover people who lose alimony or child support due to the medical condition of the person responsible to pay. For these “medical debtors,” the bill would:
- Waive procedural hurdles, such as credit counseling requirements, that make little sense for those driven to bankruptcy by medical issues;
- Allow for the forgiveness of student loan debt;
- Help families keep their homes by allowing them to maintain at least $250,000 in property.
Medical bills are the leading cause of personal bankruptcy in the United States today. Three-quarters of the families driven to bankruptcy by health-related costs are actually covered by health insurance.
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