Prior to recessing, Senator Whitehouse (Democrat-Rhode Island) introduced S. 1624, designed to amend Title 11 of the Bankruptcy Code to provide protection for medical debt homeowners; to restore bankruptcy protections for individuals experiencing economic distress while serving as caregivers to ill, injured or disabled family members; and to exempt debtors whose financial problems were caused by serious medical problems from means testing.
Note: This is a Bill in the U.S. Congress originating in the Senate (“S.”). A bill must be passed by both the Senate and House and then be signed by the President before it becomes law. Bill numbers restart from 1 every two years. Each two year cycle is called a session of Congress. This bill was created in the 111th Congress, in 2009-2010. The titles of Bills are written by the Bill’s sponsor and are a part of the legislation itself.
Comment by Victoria Ring (a non-attorney):
At this time, there is nothing to be alarmed at with the introduction of this Bill. The Bill will still go through any number of changes before it is approved by both the Senate and the House of Representatives and sent to the President for signing.
The purpose of providing you with this information is so that you will have advance notice of what may be <coming down the pike>. As we have discussed before, many bankruptcy courts are considering the Means Test to be more of a pain than what it is worth. Even if someone fails the Means Test and qualifies for a Chapter 13, their current income may qualify them for a Chapter 7 (or vice versa.) Because of this, many Trustees are going back to the old method of using Schedule I and J as the determining factor between a Chapter 7 and Chapter 13 and using the Means Test as the secondary authority rather than the primary authority for which it was originally intended.
The passing of this Bill would be the first step in the direction of eliminating the Means Test in the future. By excluding income and expenses from it (based upon certain criteria such as medical debt for homeowners,) the Means Test will definitely lose its effectiveness and be placed as a permanent secondary authority.
Remember, this is just my opinion and perspective. If you are interested in this topic, do your own research so you can form your own opinion.
Victoria Ring
Certified Paralegal
http://www.713training.com
http://www.713attorney.com
