Written by Craig D. Robins, Esq.
Last week, a new bill was introduced into Congress which is designed to provide a special safety net for individuals who are in a financial crisis due to a personal or family medical debts.
The bill, entitled, the Medical Bankruptcy Fairness Act (H.R. 901), would protect $250,000 of the value of the medically distressed debtor’s residence in a Chapter 7 bankruptcy filing and protect a family caregiver from having their case dismissed or referred to chapter 11 or 13.
The current bankruptcy homestead exemption for consumers filing bankruptcy on Long Island and in New York is $50,000 per person. In effect, the new law would increase that amount to $250,000 when certain requirements of the proposed statute are met. One eligibility requirement is that the amount of medical debt must be more than 25% of debtor’s household income for the prior one-year period. There are other qualifications as well.
The proposed law was introduced by Rep. Carol Shea-Porter (D-N.H.) who stated,”An unexpected emergency or illness should not wipe out everything a family has. My legislation will help protect the homes of families who are struggling with catastrophic medical bills.” Click here to read the text of the Medical Bankruptcy Fairness Act (H.R. 901).