II 

114TH CONGRESS 

2D SESSION S. 3385 

To amend title 11 of the United States Code to provide bankruptcy 

protections for medically distressed debtors, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 22, 2016 

Mr. WHITEHOUSE (for himself, Ms. WARREN, and Mr. DURBIN) introduced 

the following bill; which was read twice and referred to the Committee 

on the Judiciary 

A BILL 

To amend title 11 of the United States Code to provide 

bankruptcy protections for medically distressed debtors, 

and for other purposes. 

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 2016’’. 

6 SEC. 2. DEFINITIONS. 

7 (a) IN GENERAL.—Section 101 of title 11, United 

8 States Code, is amended— 


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1 (1) by inserting after paragraph (39A) the fol2 lowing: 

3 ‘‘(39B) The term ‘medical debt’ means any 

4 debt incurred voluntarily or involuntarily— 

5 ‘‘(A) as a result of the diagnosis, cure, 

6 mitigation, or treatment of injury, deformity, or 

7 disease of an individual; or 

8 ‘‘(B) for services performed by a medical 

9 professional in the prevention of disease or ill10 ness of an individual. 

11 ‘‘(39C) The term ‘medically distressed debtor’ 

12 means— 

13 ‘‘(A) a debtor who, during the 3 years be14 fore the date of the filing of the petition— 

15 ‘‘(i) incurred or paid aggregate med16 ical debts for the debtor, a dependent of 

17 the debtor, or a nondependent parent, 

18 grandparent, sibling, child, grandchild, or 

19 spouse of the debtor that were not paid by 

20 any third-party payor and were greater 

21 than the lesser of— 

22 ‘‘(I) 10 percent of the debtor’s 

23 adjusted gross income (as such term 

24 is defined in section 62 of the Internal 

25 Revenue Code of 1986); or 


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1 ‘‘(II) $10,000; 

2 ‘‘(ii) did not receive domestic support 

3 obligations, or had a spouse or dependent 

4 who did not receive domestic support obli5 gations, of at least $10,000 due to a med6 ical issue of the person obligated to pay 

7 that would cause the obligor to meet the 

8 requirements under clause (i) or (iii), if the 

9 obligor was a debtor in a case under this 

10 title; or 

11 ‘‘(iii) experienced a change in employ12 ment status that resulted in a reduction in 

13 wages, salaries, commissions, or work 

14 hours or resulted in unemployment due 

15 to— 

16 ‘‘(I) an injury, deformity, or dis17 ease of the debtor; or 

18 ‘‘(II) care for an injured, de19 formed, or ill dependent or non20 dependent parent, grandparent, sib21 ling, child, grandchild, or spouse of 

22 the debtor; or 

23 ‘‘(B) a debtor who is the spouse of a debt24 or described in subparagraph (A).’’. 


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1 (b) CONFORMING AMENDMENTS.—Section 104 of 

2 title 11, United States Code, is amended— 

3 (1) in subsection (a), in the matter preceding 

4 paragraph (1), by inserting ‘‘101(39C)(A),’’ after 

5 ‘‘101(19)(A),’’; and 

6 (2) in subsection (b), by inserting 

7 ‘‘101(39C)(A),’’ after ‘‘101(19)(A),’’. 

8 SEC. 3. EXEMPTIONS. 

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

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

11 following: 

12 ‘‘(r)(1) If a medically distressed debtor exempts prop13 erty listed in subsection (b)(2), the debtor may, in lieu 

14 of the exemption provided under subsection (d)(1), elect 

15 to exempt the debtor’s aggregate interest, not to exceed 

16 $250,000 in value, in property described in paragraph (3) 

17 of this subsection. 

18 ‘‘(2) If a medically distressed debtor exempts prop19 erty listed in subsection (b)(3) and the exemption provided 

20 under applicable law specifically for the kind of property 

21 described in paragraph (3) is for less than $250,000 in 

22 value, the debtor may elect to exempt the debtor’s aggre23 gate interest, not to exceed $250,000 in value, in any such 

24 property. 

25 ‘‘(3) The property described in this paragraph is— 


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1 ‘‘(A) real property or personal property that the 

2 debtor or a dependent of the debtor uses as a resi3 dence; 

4 ‘‘(B) a cooperative that owns property that the 

5 debtor or a dependent of the debtor uses as a resi6 dence; or 

7 ‘‘(C) a burial plot for the debtor or a dependent 

8 of the debtor.’’. 

9 (b) CONFORMING AMENDMENTS.—Section 104 of 

10 title 11, United States Code, is amended— 

11 (1) in subsection (a), in the matter preceding 

12 paragraph (1), by inserting ‘‘522(r),’’ after 

13 ‘‘522(q),’’; and 

14 (2) in subsection (b), by inserting ‘‘522(r),’’ 

15 after ‘‘522(q),’’. 

16 SEC. 4. WAIVER OF ADMINISTRATIVE REQUIREMENTS. 

17 (a) CASE UNDER CHAPTER 7.—Section 707(b) of 

18 title 11, United States Code, is amended by adding at the 

19 end the following: 

20 ‘‘(8) Paragraph (2) does not apply in any case 

21 in which the debtor is a medically distressed debt22 or.’’. 

23 (b) CASE UNDER CHAPTER 13.—Section 1325(b)(1) 

24 of title 11, United States Code, is amended— 


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1 (1) in subparagraph (A), by striking ‘‘or’’ at 

2 the end; 

3 (2) in subparagraph (B), by striking the period 

4 at the end and inserting ‘‘; or’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(C) the debtor is a medically distressed 

7 debtor.’’. 

8 SEC. 5. CREDIT COUNSELING. 

9 Section 109(h)(4) of title 11, United States Code, is 

10 amended by inserting ‘‘a medically distressed debtor or’’ 

11 after ‘‘apply with respect to’’. 

12 SEC. 6. STUDENT LOAN UNDUE HARDSHIP. 

13 Section 523(a)(8) of title 11, United States Code, is 

14 amended by inserting ‘‘the debtor is a medically distressed 

15 debtor or’’ before ‘‘excepting’’. 

16 SEC. 7. ATTESTATION BY DEBTOR. 

17 Section 521 of title 11, United States Code, is 

18 amended by adding at the end the following: 

19 ‘‘(k) If the debtor seeks relief as a medically dis20 tressed debtor, the debtor shall file a statement of medical 

21 expenses relevant to the determination of whether the 

22 debtor is a medically distressed debtor, which statement 

23 shall declare under penalty of perjury that such medical 

24 expenses were not incurred for the purpose of bringing the 


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1 debtor within the meaning of the term medically distressed 

2 debtor.’’. 

3 SEC. 8. EFFECTIVE DATE; APPLICATION OF AMENDMENTS. 

4 (a) EFFECTIVE DATE.—Except as provided in sub5 section (b), this Act and the amendments made by this 

6 Act shall take effect on the date of enactment of this Act. 

7 (b) APPLICATION OF AMENDMENTS.—The amend8 ments made by this Act shall apply only with respect to 

9 cases commenced under title 11, United States Code, on 

10 or after the date of enactment of this Act. 

Æ 


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