HouseH.R. 9670119th Congress
Medical Bankruptcy Fairness Act of 2026
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9670 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 9670
To amend title 11, United States Code, to provide bankruptcy
protections for medically distressed debtors, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 14, 2026
Mr. Cohen (for himself and Mr. Carson) introduced the following bill;
which was referred to the Committee on the Judiciary, and in addition
to the Committee on Financial Services, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend title 11, United States Code, to provide bankruptcy
protections for medically distressed debtors, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medical Bankruptcy Fairness Act of
2026''.
SEC. 2. DEFINITIONS.
(a) In General.--Section 101 of title 11, United States Code, is
amended by inserting after paragraph (39A) the following:
``(39B) The term `medical debt' means any debt incurred
voluntarily or involuntarily--
``(A) as a result of the diagnosis, cure,
mitigation, or treatment of injury, deformity, or
disease of an individual; or
``(B) for services performed by a medical
professional for the prevention of disease or illness
in an individual.
``(39C) The term `medically distressed debtor' means--
``(A) a debtor who, during the 3-year period
preceding the date of the filing of the petition--
``(i) incurred or paid aggregate medical
debt for the debtor, a dependent of the debtor,
or a nondependent parent, grandparent, sibling,
child, grandchild, or spouse of the debtor that
was not paid by any third-party payor and was
greater than the lesser of--
``(I) 10 percent of the adjusted
gross income (as such term is defined
in section 62 of the Internal Revenue
Code of 1986) of the debtor; or
``(II) $10,000;
``(ii) did not receive domestic support
obligations, or had a spouse or dependent who
did not receive domestic support obligations,
of at least $10,000 due to a medical issue of
the individual obligated to pay that would
cause the obligor to meet the requirements
under clause (i) or (iii), if the obligor was a
debtor in a case under this title; or
``(iii) experienced a change in employment
status that resulted in a reduction in wages,
salaries, commissions, or work hours or
resulted in unemployment due to--
``(I) an injury, deformity, or
disease of the debtor;
``(II) care for an injured,
deformed, or ill dependent or
nondependent parent, grandparent,
sibling, child, grandchild, or spouse
of the debtor; or
``(III) a national emergency
declared by the President under the
National Emergencies Act (50 U.S.C.
1601 et seq.) or another emergency
declared by a Federal, State, or local
official relating to a public health
crisis; or
``(B) a debtor who is the spouse of a debtor
described in subparagraph (A).''.
(b) Conforming Amendments.--Section 104 of title 11, United States
Code, is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by inserting ``101(39C)(A),'' after ``101(19A),''; and
(2) in subsection (b), by inserting ``101(39C)(A),'' after
``101(19A),''.
SEC. 3. EXEMPTIONS.
(a) Exempt Property.--Section 522 of title 11, United States Code,
is amended by adding at the end the following:
``(r)(1) If a medically distressed debtor exempts property listed
in subsection (b)(2), the debtor may, in lieu of the exemption provided
under subsection (d)(1), elect to exempt the aggregate interest of the
debtor, not to exceed $250,000 in value, in property described in
paragraph (3).
``(2) If a medically distressed debtor exempts property listed in
subsection (b)(3) and the exemption provided under applicable law for
the kind of property described in paragraph (3) is for less than
$250,000 in value, the debtor may elect to exempt the aggregate
interest of the debtor, not to exceed $250,000 in value, in any such
property.
``(3) The property described in this paragraph is--
``(A) real property or personal property that the debtor or
a dependent of the debtor uses as a residence;
``(B) a cooperative that owns property that the debtor or a
dependent of the debtor uses as a residence; or
``(C) a burial plot for the debtor or a dependent of the
debtor.''.
(b) Conforming Amendments.--Section 104 of title 11, United States
Code, is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by inserting ``522(r),'' after ``522(q),''; and
(2) in subsection (b), by inserting ``522(r),'' after
``522(q),''.
SEC. 4. WAIVER OF ADMINISTRATIVE REQUIREMENTS.
(a) Case Under Chapter 7.--Section 707(b) of title 11, United
States Code, is amended by adding at the end the following:
``(8) Paragraph (2) does not apply in any case in which the debtor
is a medically distressed debtor.''.
(b) Case Under Chapter 13.--Section 1325(b)(1) of title 11, United
States Code, is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(C) 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 ``apply with
respect to''.
SEC. 6. STUDENT LOAN UNDUE HARDSHIP.
Section 523(a)(8) of title 11, United States Code, is amended by
inserting ``the debtor is a medically distressed debtor, or'' before
``excepting''.
SEC. 7. ATTESTATION BY DEBTOR.
Section 521 of title 11, United States Code, is amended by adding
at the end the following:
``(k) If the debtor seeks relief as a medically distressed debtor,
the debtor shall file a statement of medical expenses relevant to the
determination of whether the debtor is a medically distressed debtor,
which shall declare under penalty of perjury that such medical expenses
were not incurred for the purpose of bringing the debtor within the
meaning of the term `medically distressed debtor'.''.
SEC. 8. MEDICALLY DISTRESSED DEBTOR BANKRUPTCIES EXCLUDED FROM CONSUMER
REPORTS.
(a) Exclusion of Medically Distressed Debtor Bankruptcies.--Section
605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended
by adding at the end the following:
``(9) Any information related to the bankruptcy of a
medically distressed debtor.''.
(b) Medically Distressed Debtor Defined.--Section 603 of the Fair
Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end
the following:
``(bb) Medically Distressed Debtor.--The term `medically distressed
debtor' has the meaning given such term in section 101 of title 11,
United States Code.''.
SEC. 9. 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
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, United
States Code, on or after the date of enactment of this Act.
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