Senator Sheldon Whitehouse has sponsored the Medical Bankruptcy Fairness Act of 2009. As of today, the bill is presently in the Committee of Judiciary. The bill would amend federal bankruptcy law to include circumstances under which a debtor, filing bankruptcy, who is medically distressed may exempt from their estate up to $250,000 of their total interest in property that they (or their dependent) uses as a residence, or in a burial plot. The bill would revise the requirements for dismissal or conversion of a Chapter 7 case to prohibit the court or specified interested parties from filing a motion to dismiss, or convert to Chapter 11 or Chapter 13, if the debtor is medically distressed. The bill would waive the credit counseling prerequisite for filing for relief from debt in the case of a medically distressed debtor. The bill does deny a discharge during bankruptcy from any debt incurred relating to attorney’s fees generated as a result of filing a Chapter 7 petition. A debtor who seeks relief as a medically distressed debtor will be required to state in writing, and under penalty of perjury, that the medical expenses of the debtor are genuine, and not specifically incurred to bring the debtor within the coverage of the medical bankruptcy provisions of the Medical Bankruptcy Fairness Act of 2009.

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Kevin D. Heupel, Colorado Bankruptcy lawyer,303-955-7570, COBankruptcyHelpEmail, free-consultation form.