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, injured, or disabled family members, and to exempt from means testing debtors whose financial problems were caused by serious medical problems, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medical Bankruptcy Fairness Act of 
2009''.

SEC. 2. DEFINITIONS.

    (a) In General.--Section 101 of title 11, the United States Code, 
is amended--
            (1) by inserting after paragraph (39A) the following:
            ``(39B) The term `medical debt' means any debt incurred 
        directly or indirectly as a result of the diagnosis, cure, 
        mitigation, treatment, or prevention of injury, deformity, or 
        disease, or for the purpose of affecting any structure or 
        function of the body.
            ``(39C) 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 debts for the debtor 
                or a dependent of the debtor, or a nondependent member 
                of the immediate family of the debtor (including any 
                parent, grandparent, sibling, child, grandchild, or 
                spouse of the debtor), that were not paid by any third 
                party payor and were in excess of the lesser of--
                            ``(i) 10 percent of the debtor's adjusted 
                        gross income (as such term is defined under 
                        section 62 of the Internal Revenue Code of 
                        1986); 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 domestic support 
                obligation income, taking into consideration any 
                disability insurance payments, for 4 or more weeks, due 
                to a medical problem of a person obligated to pay such 
                domestic support; or
                    ``(C) experienced a downgrade in employment status 
                that correlates to a reduction in wages or work hours 
                or results in unemployment, to care for an ill, 
                injured, or disabled dependent of the debtor, or an 
                ill, injured, or disabled nondependent member of the 
                immediate family of the debtor (including any parent, 
                grandparent, sibling, child, grandchild, or spouse of 
                the debtor), for not less than 30 days.''.
    (b) Conforming Amendments.--Sections 104(b)(1) and 104(b)(2) of 
title 11, the United States Code, are each amended by inserting 
``101(39C)(A)(ii),'' after ``101(19)(A)''.

SEC. 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 property of the 
        kind described in paragraph (1) 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 each amended by inserting 
``522(r),'' after ``522(q),''.

SEC. 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) 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.''.

SEC. 5. CREDIT COUNSELING.

    Section 109(h)(4) of title 11 United States Code, is amended by 
inserting ``a medically distressed debtor or'' after ``with respect 
to''.

SEC. 6. NONDISCHARGEABILITY OF CERTAIN ATTORNEYS FEES.

    Section 523(a) of title 11, United States Code, is amended--
            (1) in paragraph (18), by striking ``or'' at the end;
            (2) in paragraph (19), by striking the period at the end 
        and inserting ``; or''; and
            (3) by inserting after paragraph (19) the following:
            ``(20) incurred by a debtor relating to attorneys fees 
        generated as result of the debtor's filing of a petition under 
        chapter 7.''.

SEC. 7. 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.

SEC. 8. ATTESTATION BY DEBTOR.

    Any debtor who seeks relief as a medically distressed debtor in 
accordance with the amendments made by this Act shall attest in writing 
and under penalty of perjury that the medical expenses of the debtor 
were genuine, and were not specifically incurred to bring the debtor 
within the coverage of the medical bankruptcy provisions, as provided 
in this Act and the amendments made by this Act.

Summary: Medical Bankruptcy Fairness Act of 2009 - Amends federal bankruptcy law to cite circumstances under which a medically distressed debtor may elect to exempt from the property of the estate in bankruptcy up to $250,000 of the debtor's aggregate interest in specified real or personal property that the debtor (or debtor's dependent) uses as a residence, in a cooperative, or in a burial plot for the debtor or a dependent.

Revises requirements for dismissal or conversion of a Chapter 7 case to prohibit the court or specified parties in interest from filing a motion to dismiss or convert to Chapter 11 or 13 if the debtor is a medically distressed debtor.

Waives the credit counseling prerequisite for filing for relief from debt in the case of a medically distressed debtor.

Denies a discharge in bankruptcy from any debt incurred that relates to attorneys' fees generated as a result of the debtor's filing of a Chapter 7 petition.

Requires a debtor who seeks relief as a medically distressed debtor to attest 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 this Act.