I 

110TH CONGRESS 

2D SESSION H. R. 5138 

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. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 28, 2008 

Ms. SHEA-PORTER 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 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medical Bankruptcy 

5 Fairness Act of 2008’’. 


smartinez on PRODPC61 with BILLS
2 

•HR 5138 IH

1 SEC. 2. DEFINITIONS. 

2 Section 101 of title 11, the United States Code, is 

3 amended— 

4 (1) by inserting after paragraph (39A) the fol5 lowing: 

6 ‘‘(39B) the term ‘medically distressed debtor’ 

7 means a debtor who, in any consecutive 12-month 

8 period during the 3 years before the date of the fil9 ing of the petition— 

10 ‘‘(A) incurred or paid medical expenses for 

11 the debtor or a dependent of the debtor that 

12 were not paid by any third party payor and 

13 were in excess of the lesser of— 

14 ‘‘(i) 25 percent of the debtor’s house15 hold income for such 12-month period; or 

16 ‘‘(ii) $10,000. 

17 ‘‘(B) was a member of a household in 

18 which 1 or more members (including the debt19 or) lost all or substantially all of the member’s 

20 employment or business income for 4 or more 

21 weeks during such 12-month period due to a 

22 medical problem of a member of the household 

23 or a dependent of the debtor; or 

24 ‘‘(C) was a member of a household in 

25 which 1 or more members (including the debt26 or) lost all or substantially all of the member’s 


smartinez on PRODPC61 with BILLS
3 

•HR 5138 IH

1 alimony or support income for 4 or more weeks 

2 during such 12-month period due to a medical 

3 problem of a person obligated to pay alimony or 

4 support.’’. 

5 SEC. 3. EXEMPTIONS. 

6 (a) EXEMPT PROPERTY.—Section 522 of title 11, the 

7 United States Code, is amended by adding at the end the 

8 following: 

9 ‘‘(r) For a debtor who is a medically distressed debt10 or, if the debtor elects to exempt property— 

11 ‘‘(1) listed in subsection (b)(2), then in lieu of 

12 the exemption provided under subsection (d)(1), the 

13 debtor may elect to exempt the debtor’s aggregate 

14 interest, not to exceed $250,000 in value, in real 

15 property or personal property that the debtor or a 

16 dependent of the debtor uses as a residence, in a co17 operative that owns property that the debtor or a de18 pendent of the debtor uses as a residence, or in a 

19 burial plot for the debtor or a dependent of the debt20 or; or 

21 ‘‘(2) listed in subsection (b)(3), then if the ex22 emption provided under applicable law specifically 

23 for such property is for less than $250,000 in value, 

24 the debtor may elect in lieu of such exemption to ex25 empt the debtor’s aggregate interest, not to exceed 


smartinez on PRODPC61 with BILLS
4 

•HR 5138 IH

1 $250,000 in value, in any such real or personal 

2 property, cooperative, or burial plot.’’. 

3 (b) CONFORMING AMENDMENTS.—Sections 

4 104(b)(1) and 104(b)(2) of title 11, the United States 

5 Code, are amended by inserting immediately after 

6 ‘‘522(q),’’ ‘‘522(r),’’. 

7 SEC. 4. DISMISSAL OF A CASE OR CONVERSION TO A CASE 

8 UNDER CHAPTER 11 OR 13. 

9 Section 707(b) of title 11, the United States Code, 

10 is amended by adding at the end the following: 

11 ‘‘(8)(A) No judge, United States trustee (or 

12 bankruptcy administrator, if any), trustee, or other 

13 party in interest may file a motion under paragraph 

14 (2) if the debtor is a medically distressed debtor or 

15 an economically distressed caregiver. 

16 ‘‘(B) In this paragraph, the term ‘economically 

17 distressed caregiver’ means a caregiver who, within 

18 3 years before the date of the filing of the petition— 

19 ‘‘(i) experienced a downgrade in employ20 ment status that correlates to a reduction in 

21 wages, work hours, business income or results 

22 in unemployment, to care for a relative for not 

23 less than 30 days; or 

24 ‘‘(ii) in any consecutive 12-month period, 

25 has incurred or paid medical expenses on behalf 


smartinez on PRODPC61 with BILLS
5 

•HR 5138 IH

1 of a relative that were not paid by any third 

2 party payor and were in excess of the lesser 

3 of— 

4 ‘‘(I) 25 percent of the debtor’s house5 hold income for such 12-month period; or 

6 ‘‘(II) $10,000.’’. 

7 SEC. 5. EFFECTIVE DATE; APPLICATION OF AMENDMENTS. 

8 (a) EFFECTIVE DATE.—Except as provided in sub9 section (b), this Act and the amendments made by this 

10 Act shall take effect on the date of the enactment of this 

11 Act. 

12 (b) APPLICATION OF AMENDMENTS.—The amend13 ments made by this Act shall apply only with respect to 

14 cases commenced under title 11 of the United States Code 

15 on or after the date of the enactment of this Act. 

Æ 


smartinez on PRODPC61 with BILLS