A quintet of Senate Democrats have introduced a bill that aims to make it easier for consumers to have student loans and medical debts discharged when filing for bankruptcy protection.
The Medical Bankruptcy Fairness Act of 2021, S.146, was introduced by Sen. Sheldon Whitehouse [D-R.I.], Sen. Sherrod Brown [D-Ohio], Sen. Elizabeth Warren [D-Mass.], Sen. Tammy Baldwin [D-Wisc.], and Sen. Richard Blumenthal [D-Conn.] and is a proactive attempt at easing the process for individuals who may have to file for bankruptcy protection as a result of the COVID-19 pandemic.
While the full text of the bill is not yet available online, a press release from the Senators highlighted the key provisions, including:
- Waiving the requirement that individuals filing for bankruptcy protection receive credit counseling, because it makes “little sense for those pushed into bankruptcy due to medical debt”
- Permitting the discharge of student loans
- Providing families to retain at least $250,000 of home equity
Currently, individuals must prove an undue hardship in order to have their student loans discharged during bankruptcy.
This is not the first time that such a bill has been introduced, but with Democrats now in control of both the House of Representatives and the Senate, it stands a greater chance of becoming law.
“Our employment-based health insurance system is ill-suited for a pandemic,” said Sen. Whitehouse, in a statement. “Many of the millions of Americans who are out of work lost their health insurance along with their income, and they’re at increased risk of racking up huge medical bills if they come down with COVID-19. We need to ease the burden on families dealing with the health and financial fallout from this pandemic.”
This bill was introduced the same week that companion bills were introduced
