The Medical Bankruptcy Fairness Act of 2024 would provide special bankruptcy protections for people whose debts are primarily caused by medical expenses. The bill defines a "medically distressed debtor" as someone who has incurred significant medical debt in the previous three years—either more than 10 percent of their adjusted gross income or at least $10,000—or who lost income due to medical issues, caregiving responsibilities, or COVID-19 and related emergencies. Medically distressed debtors would receive several advantages in bankruptcy, including exemptions from certain income-based requirements, the ability to protect up to $250,000 in home equity or burial plots, potential relief from student loan debt, and waiver of mandatory credit counseling requirements. The bill would apply to bankruptcy cases filed after it becomes law, with no specific funding requirements mentioned. This legislation aims to make bankruptcy more accessible for people overwhelmed by medical costs, a significant cause of financial distress for many American households.
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