Bill > A03038

This bill establishes comprehensive protections for consumers who have incurred debt through economic abuse, coercion, or exploitation. The legislation defines "coerced debt" as debt incurred through fraud, duress, intimidation, threat, force, or non-consensual use of personal information. When a debtor provides adequate documentation (such as a police report, Federal Trade Commission identity theft report, court order, or verified statement from a qualified third party) indicating a debt is coerced, creditors must immediately cease collection activities and conduct a thorough review. The bill provides debtors with a legal mechanism to dispute such debts, including the right to file a cause of action seeking a declaratory judgment that the debt is coerced, which can result in the debt being invalidated, collection activities being enjoined, and adverse credit reporting information being deleted. Creditors who violate these provisions can face statutory damages of $1,000, actual damages, and attorneys' fees. The bill also protects debtors by requiring creditors to use only the contact information provided by the debtor and prohibiting disclosure of the debtor's information to third parties without authorization. Additionally, the law allows for court protections like sealed records or remote hearings to prevent further potential abuse of the debtor.

Business and Industry, Housing and Urban Affairs

https://www.nysenate.gov/legislation/bills/2025/A3038