The Medical Bankruptcy Fairness Act of 2021 was unveiled by Democratic Senators this week in response to the economic impact of the Covid-19 pandemic. The bill would make substantial reforms to the current bankruptcy code, making it easier for those struggling with student loan debt and medical debt to discharge the same in bankruptcy.
Currently, the bankruptcy code treats student loan debt differently from other types of consumer debt. Borrowers must show they meet the ‘undue hardship’ requirement in order to discharge their student loan debt in bankruptcy.