H.R. 901 (111th): Medical Bankruptcy Fairness Act

111th Congress, 2009–2010. Text as of Feb 04, 2009 (Introduced).

Status & Summary | PDF | Source: GPO

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111th CONGRESS

1st Session

H. R. 901

IN THE HOUSE OF REPRESENTATIVES

February 4, 2009

introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 11 of the United States Code to provide protection for medical debt homeowners, to restore bankruptcy protections for individuals experiencing economic distress as caregivers to ill or disabled family members, and to exempt from means testing debtors whose financial problems were caused by serious medical problems.

1.

Short title

This Act may be cited as the Medical Bankruptcy Fairness Act.

2.

Definitions

Section 101 of title 11, the United States Code, is amended—

(1)

by inserting after paragraph (39A) the following:

(39B)

the term medically distressed debtor means a debtor who, in any consecutive 12-month period during the 3 years before the date of the filing of the petition—

(A)

incurred or paid medical expenses for the debtor or a dependent of the debtor that were not paid by any third party payor and were in excess of the lesser of—

(i)

25 percent of the debtor’s household income for such 12-month period; or

(ii)

$10,000.

(B)

was a member of a household in which 1 or more members (including the debtor) lost all or substantially all of the member’s employment or business income for 4 or more weeks during such 12-month period due to a medical problem of a member of the household or a dependent of the debtor; or

(C)

was a member of a household in which 1 or more members (including the debtor) lost all or substantially all of the member’s alimony or support income for 4 or more weeks during such 12-month period due to a medical problem of a person obligated to pay alimony or support.

.

3.

Exemptions

(a)

Exempt property

Section 522 of title 11, the United States Code, is amended by adding at the end the following:

(r)

For a debtor who is a medically distressed debtor, if the debtor elects to exempt property—

(1)

listed in subsection (b)(2), then in lieu of the exemption provided under subsection (d)(1), the debtor may elect to exempt the debtor’s aggregate interest, not to exceed $250,000 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor; or

(2)

listed in subsection (b)(3), then if the exemption provided under applicable law specifically for such property is for less than $250,000 in value, the debtor may elect in lieu of such exemption to exempt the debtor’s aggregate interest, not to exceed $250,000 in value, in any such real or personal property, cooperative, or burial plot.

.

(b)

Conforming amendments

Sections 104(b)(1) and 104(b)(2) of title 11, the United States Code, are amended by inserting immediately after 522(q),522(r),.

4.

Dismissal of a case or conversion to a case under chapter 11 or 13

Section 707(b) of title 11, the United States Code, is amended by adding at the end the following:

(8)
(A)

No judge, United States trustee (or bankruptcy administrator, if any), trustee, or other party in interest may file a motion under paragraph (2) if the debtor is a medically distressed debtor or an economically distressed caregiver.

(B)

In this paragraph, the term economically distressed caregiver means a caregiver who, within 3 years before the date of the filing of the petition—

(i)

experienced a downgrade in employment status that correlates to a reduction in wages, work hours, business income or results in unemployment, to care for a relative for not less than 30 days; or

(ii)

in any consecutive 12-month period, has incurred or paid medical expenses on behalf of a relative that were not paid by any third party payor and were in excess of the lesser of—

(I)

25 percent of the debtor’s household income for such 12-month period; or

(II)

$10,000.

.

5.

Effective date; application of amendments

(a)

Effective date

Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.

(b)

Application of amendments

The amendments made by this Act shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act.