Whitehouse, Warren Introduce Measure to Help Families Struggling With Medical Debt

June 16, 2014
Insurance News Net 
Sens. Sheldon Whitehouse (D-R.I.) and Elizabeth Warren (D-Mass.) have introduced the Medical Bankruptcy Fairness Act of 2014 (S. 2471), which aims to create a more lenient bankruptcy process for those who struggle financially because of medical issues and related debt. Medical bills are currently the leading cause of personal bankruptcy among Americans.

"Bankruptcy is meant to give people a fresh start and should not be a source of added hardship in a time of need," said Whitehouse. "This legislation will make our bankruptcy system fairer for families who find themselves in financial straits through no fault of their own."

Under the proposal, individuals with large medical bills or who lose income from an illness or injury or to care for a sick family member could receive more accommodative treatment in bankruptcy. The bill also would include people who lose alimony or child support due to the medical condition of the person responsible to pay. It additionally would waive procedural hurdles like credit counseling requirements, allow for the forgiveness of student loan debt, and allow families to maintain at least $250,000 in property so as to avoid losing their homes.

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