Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026
This bill updates federal bankruptcy law to protect individuals seeking to cancel their student loans due to 'undue hardship.' It allows the court to require the government or lending institution to pay the debtor's legal fees if their opposition to the loan cancellation is found to be unjustified. This change aims to prevent aggressive collection practices and make the legal process more affordable for struggling borrowers.
- Referred to the House Committee on the Judiciary.
- Introduced in House
- Introduced in House
The provisions, in plain language.
Estates the short title of the Act as the "Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026."
Amends the U.S. Bankruptcy Code to allow a court to award attorney's fees and costs to a debtor if the debtor requests a determination of dischargeability for student loan debt based on undue hardship and the court finds the creditor's position was not substantially justified.
Establishes that the Act's provisions take effect on the date of enactment.
Applies the changes made by the Act only to bankruptcy cases filed on or after the date of enactment.