FOR IMMEDIATE RELEASE:
October 22, 2014
Nunn announces support for Medical Bankruptcy Fairness Act
In response to the high rate medical debtors, U.S Senate candidate Michelle Nunn (D-GA) said Monday she will support legislation that will improve the bankruptcy process for those with medical debt.
The Medical Bankruptcy Fairness Act proposed by Senators Sheldon Whitehouse (D-RI) and Elizabeth Warren (D-MA), aims to help families burdened by the cost of medical bills by making the bankruptcy process more forgiving and offering more accommodative treatment in bankruptcy.
“It is ridiculous people have to go through the same bankruptcy process whether it was from personal misuse of money or from unexpected medical debts,” Nunn said. “Medical bills are the leading cause of debt in the U.S today and changed need to be made.”
The new provisions include defining qualifications for a “medically distressed debtor.” These include debtors who within three years of filing for bankruptcy paid or incurred medical debts for him or herself, a dependent, and even some independents that was not paid for by a third party. The debts must total more than 10 percent of the debtor’s income or $10,000.
“Medically distressed debtors” also include those who did not receive child support or alimony of at least $10,000 due to medical debts of the person obligated to pay. Lastly, the provision includes those who received reduction in wages, hours or unemployment due to medical issues of the debtor or the debtor’s dependents.
“I want to be adamant that medical debt is not limited to those without health insurance,” Nunn explained. “Anyone, no matter the quality of their health insurance, can undergo bankruptcy from illness or injury, especially in the sense that hours and wages are typically cut.”
In addition to including “medically distressed debtors,” there are three fundamental changes to the bankruptcy code. First, it will abandon procedural hurdles that make little to no sense for those driven to bankruptcy through medical debt. Next, families will be allowed to maintain up to $250,000 in property which can keep them from losing their homes. Lastly, it allows for medically distressed debtors relief of student loan debt in the case of illness or injury.
“It is important our citizens feel safe and confident during times of medical need,” Nunn said. “The provisions of this bill will provide relief for those who need it the most.”
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