# Medical Hardship Credit Protection Act

To protect citizens experiencing catastrophic medical hardship from predatory financial escalation, abusive debt accumulation, and permanent economic destruction caused by medical emergencies or long-term illness.

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# Section 1. Short Title

This Act shall be known and cited as the:

**“Medical Hardship Credit Protection Act.”**

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# Section 2. Findings and Legislative Intent

The Legislature finds that:

1. Millions of Americans experience severe financial hardship due to catastrophic illness, long-term treatment, disability, or medically verified inability to work.

2. Existing lending and credit systems frequently compound hardship through:

* excessive APR accumulation
* penalty fees
* late charges
* compounding interest
* aggressive collections practices

3. Citizens suffering from major medical conditions should not face permanent financial destruction while attempting to survive illness or recovery.

4. The intent of this Act is to:

* stabilize debt growth
* preserve financial dignity
* prevent predatory escalation
* maintain accountability for principal obligations
while protecting medically vulnerable individuals.

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# Section 3. Definitions

## “Qualified Medical Hardship”

A medically verified condition substantially impairing an individual’s ability to:

* maintain employment
* generate income
* perform normal occupational functions
for a period exceeding 90 consecutive days.

Conditions may include:

* cancer
* neurological disorders
* severe autoimmune disease
* organ failure
* catastrophic injury
* major surgical recovery
* terminal illness
* other physician-certified disabling conditions

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## “Covered Debt”

Includes:

* credit cards
* personal loans
* medical debt
* unsecured consumer debt
* private financing agreements

Excludes:

* criminal restitution
* child support
* tax liabilities
* court-ordered penalties

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# Section 4. Medical Hardship Protection Status

Upon verification of qualified medical hardship:

1. All APR accumulation shall immediately cease.

2. Interest accrual shall be frozen.

3. Late fees and penalty fees shall cease.

4. Collection escalation shall be suspended.

5. Negative credit reporting directly related to hardship status shall be prohibited.

6. Existing principal balances shall remain valid and collectible only under the terms established within this Act.

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# Section 5. Principal Preservation Requirement

1. The borrower shall remain responsible for repayment of:

* the original principal balance
only.

2. No additional:

* compounded interest
* punitive APR
* collection inflation
* excessive fees
may accumulate during verified hardship status.

3. Creditors may establish reasonable repayment restructuring following hardship stabilization.

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# Section 6. Estate Limitation Protection

1. In the event of death during qualified medical hardship:

* only the remaining principal balance may be collected from the estate.

2. No:

* APR accumulation
* penalty fees
* accelerated default penalties
* post-death compounding
shall apply.

3. Surviving family members shall not inherit unsecured hardship debt obligations beyond lawful estate procedures.

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# Section 7. Credit Protection Standards

1. Qualified individuals shall receive hardship protection coding preventing:

* predatory score destruction
* improper delinquency escalation
* abusive reporting practices

2. Credit reporting agencies shall:

* remove hardship-related penalties
* maintain protected reporting status
* comply with federal hardship standards

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# Section 8. Collection Practice Restrictions

During verified hardship status, creditors and collection agencies may not:

* harass debtors
* threaten litigation improperly
* repeatedly contact hospitalized individuals
* misrepresent legal consequences
* pursue coercive settlement tactics

All collection communication must:

* clearly disclose hardship protections
* provide rights information
* comply with federal consumer protection laws

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# Section 9. Verification Standards

1. Medical hardship status shall require:

* physician certification
* licensed specialist documentation
* hospital verification
or equivalent medical evidence.

2. Fraudulent claims made under this Act shall constitute:

* financial fraud
* subject to civil and criminal penalties

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# Section 10. Hardship Review Board

A Medical Financial Hardship Review Division shall be established to:

* process disputes
* oversee creditor compliance
* review hardship determinations
* issue enforcement recommendations

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# Section 11. Enforcement Authority

Enforcement authority shall include:

* Consumer Financial Protection Bureau (CFPB)
* Federal Trade Commission (FTC)
* State Attorneys General
* Consumer protection agencies

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# Section 12. Civil Penalties

Violations may result in:

* statutory damages
* consumer restitution
* regulatory fines
* suspension of collection authority
* class-action liability
* enhanced penalties for repeated violations

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# Section 13. Private Right of Action

Affected citizens may:

* file civil claims
* pursue injunctive relief
* recover damages
* seek attorney fees where applicable

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# Section 14. Protection Against Retaliation

No creditor, employer, insurer, or reporting agency may retaliate against an individual for:

* seeking hardship protection
* filing complaints
* participating in investigations
* exercising rights under this Act

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# Section 15. Transparency and Public Reporting

Regulatory agencies shall publish:

* annual compliance reports
* enforcement statistics
* creditor violation records
* hardship approval metrics

while protecting personal medical privacy.

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# Section 16. Effective Date

This Act shall take effect:

* 180 days following enactment

to allow implementation of compliance systems, reporting standards, and oversight procedures.