The Medical Bankruptcy Fairness Act of 2026 establishes a new category of "medically distressed debtor" within the U.S. Bankruptcy Code, providing targeted protections for individuals facing severe financial hardship due to health-related issues. To qualify, a debtor must have incurred substantial medical debt, lost significant domestic support due to a medical condition, or experienced employment changes caused by their own or a family member's illness, or a public health emergency. This designation also extends to the spouse of such a debtor, ensuring broader family coverage. The bill offers significant relief, allowing medically distressed debtors to claim a homestead exemption of up to $250,000 for their residence or burial plot, even if state exemptions are lower. Crucially, it waives key administrative requirements, exempting these debtors from the Chapter 7 means test and the Chapter 13 disposable income requirement , thereby simplifying the bankruptcy process. Additionally, they are excused from mandatory credit counseling prior to filing. Further protections include making it easier for medically distressed debtors to discharge student loans, as their status can satisfy the "undue hardship" requirement. Debtors claiming this status must attest under penalty of perjury that their medical expenses were not incurred solely to qualify. Importantly, the bill mandates that bankruptcies filed by medically distressed debtors will not be included in consumer credit reports , safeguarding their future financial standing.