H.R. 9670 — Medical Bankruptcy Fairness Act of 2026

This section defines "medical debt" as debt incurred for the diagnosis, cure, mitigation, treatment, or prevention of injury, deformity, or disease. It also defines a "medically distressed debtor" as an individual (or spouse of such an individual) who, in the 3-year period before filing a bankruptcy petition, incurred or paid medical debt exceeding the lesser of 10 percent of adjusted gross income (as defined in section 62 of the Internal Revenue Code) or $10,000, failed to receive at least $10,000 in domestic support obligations due to a medical issue, or experienced a qualifying reduction in employment or wages due to medical conditions or a declared emergency.

This section permits a medically distressed debtor to exempt up to $250,000 in value of a residence, cooperative, or burial plot, either in lieu of the federal homestead exemption under subsection (d)(1) or to supplement a smaller state-law exemption. It also subjects the new exemption to periodic inflation adjustments under section 104.

This section exempts medically distressed debtors from the means-test presumption of abuse in chapter 7 cases under section 707(b)(2) and from the disposable-income commitment requirement for plan confirmation in chapter 13 cases under section 1325(b)(1).

This section requires a debtor seeking relief as a medically distressed debtor to file a statement of relevant medical expenses and declare under penalty of perjury that the expenses were not incurred to qualify as a medically distressed debtor.

This section prohibits consumer reporting agencies from including in consumer reports any information related to the bankruptcy of a medically distressed debtor, as defined in section 101 of title 11, United States Code.

This section provides that the Act takes effect on the date of enactment. It limits application of the amendments to bankruptcy cases commenced under title 11 on or after that date.