Marginal Successes, Revised Expectations, Broken Promises – A Presidency in Review

Part 5: No Bankruptcy Reform for Medically Distressed Debtors

When an individual debtor files for protection from creditors under the U.S. Bankruptcy Code, his or her medical debts are typically included in Schedule F (Creditors Holding Unsecured Nonpriority Claims) of the petition as unsecured nonpriority obligations. Both before and after the BAPCPA went into effect in 2005, individual petitioners’ medical debts have been fully dischargeable in bankruptcy. Candidate Obama promised bankruptcy reform with the addition of a medical exemption that would supplement existing bankruptcy law.

Obama Promised Reform: Amend the Bankruptcy Laws to Create a Medical Exemption for Families

On February 13, 2008, candidate Obama...