Whitehouse and Cohen Introduce Bill to Provide Relief to Americans Facing Medical Bankruptcy

Whitehouse has long championed legislation to help people burdened by medical debt

Washington, D.C. - U.S. Senator Sheldon Whitehouse (D-RI) and Congressman Steve Cohen (D-TN) today introduced legislation to help families burdened by unforeseen medical expenses. The Medical Bankruptcy Fairness Act of 2026 would reform the bankruptcy process to alleviate the strain on debtors and make the bankruptcy system work better for Americans.

"The last thing a family should have to think about during a medical emergency is whether they're going to lose their home because of bills for a surgery or treatments," said Whitehouse. "This legislation will make our bankruptcy system fairer for, and more compassionate to, families who find themselves in financial straits because of bad luck and a health care system that allows too many patients to slip through the cracks."

"Nearly two-thirds of all personal bankruptcies involve medical debt - a number that is too high. Americans should not have to lose everything to receive the medical care they need," said Congressman Cohen. "The Medical Bankruptcy Protection Act will provide much-needed cover for families facing bankruptcy because they got hurt or sick and make it easier for them to rebuild their lives."

Unlike many other debts, medical debt is involuntary, unexpected, and can grow at a rapid rate. People with medical debt report cutting spending on food, spending down their savings to pay for medical bills, borrowing money from friends or family members, or taking on additional debts.

The Medical Bankruptcy Fairness Act would create a more accommodating bankruptcy process for Americans forced into bankruptcy due to medical debt or who have lost their jobs due to a public health-related shutdown. Specifically, the bill would:

• Waive procedural hurdles like credit counseling that make little sense for those pushed into bankruptcy through no fault of their own;
• Permit the discharge of student loans for medically distressed debtors, which currently cannot be erased in bankruptcy for most debtors;
• Provide families a greater chance of keeping their homes by allowing the retention of at least $250,000 of home equity; and
• Keep medical bankruptcies off consumer credit reports.

According to bankruptcy experts, medical debt remains a leading cause of personal bankruptcy filings in the United States. For individuals with limited assets, even a relatively small unexpected medical expense can be unaffordable. For people with significant medical needs, medical debt can pile up over time. A 2024 study suggests Americans owe at least $220 billion in medical debt, with 20 million people (nearly one in 12 adults) affected.

The Medical Bankruptcy Fairness Act is cosponsored by U.S. Senators Richard Blumenthal (D-CT), Cory Booker (D-NJ), Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), and Peter Welch (D-VT).

The Medical Bankruptcy Fairness Act is endorsed by the National Association of Consumer Advocates and the National Association of Consumer Bankruptcy Attorneys.

Full text of the bill is available here.