U.S. Senators Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH), Elizabeth Warren (D-MA),Tammy Baldwin (D-WI), and Richard Blumenthal (D-CT) are introducing The Medical Bankruptcy Fairness Act of 2021 to help consumers.
Who knows if it will pass but one part of the bill takes direct aim at the debt relief industry.
Introduced nearly 15-years ago where the pre and post-bankruptcy requirement that consumers have to go through some sort of credit counseling class.
The Medical Bankruptcy Fairness Act of 2021 wants to eliminate that requirement. Forbes says, the goal of the bill is to “Waive procedural hurdles like credit counseling, which is currently required for most people going through the bankruptcy process. Proponents of the bill argue that credit counseling makes little sense for those pushed into bankruptcy through no fault of their own.” – Source
Additionally, the bill proposes to change the way student loans are handled in bankruptcy. The legislation would “Permit the discharge of student loans, which currently cannot be erased in bankruptcy for most debtors.” – Source
Consumers would be able to get more relief from medical debt as well.
The proposed changes to the law would also “Provide families a greater chance of keeping their homes in states that have weak debtor protections by allowing the retention of at least $250,000 of home equity.” – Source
There is no way to forecast if this bill will actually become law so we will just have to wait and see.
As Forbes says, “Democratic senators have proposed similar bills in the past, but the proposals went nowhere in the Republican-controlled Senate. Now, with Democrats holding narrow majorities in both chambers of Congress, this bill has a better chance of passing, but it is unclear if it would garner sufficient bipartisan support to overcome a Republican filibuster.”