Bill > HB1198

This bill establishes new protections for debtors who have incurred "coerced debt," which is defined as debt incurred due to fraud, duress, intimidation, threats, force, coercion, manipulation, undue influence, misinformation, or the nonconsensual use of personal identifying information, particularly in contexts like abuse, child exploitation, financial exploitation, harassment, human trafficking, or labor trafficking, and specifically excludes debts secured by real property. A debtor can notify a creditor in writing with "adequate documentation" (like a police report or FTC identity theft report) that a debt is coerced and request the creditor stop collection activities; the creditor must then confirm receipt, inform the debtor of any missing documentation, notify consumer reporting agencies that the debt is disputed, and within 30 days, decide whether to cease collection or provide written notice of when they will resume, which cannot be sooner than 40 days after initial notification. If the creditor ceases collection, they must report the debt as deleted to consumer reporting agencies and cannot resume collection without at least 10 days' written notice. If the creditor does not cease collection, the debtor can file a civil action seeking equitable relief, such as a court order declaring the debt coerced, prohibiting collection, or requiring its deletion from credit reports, and may also pursue legal action against the individual who caused the coerced debt to recover payments made, attorney's fees, and court costs. The bill also establishes an affirmative defense in debt collection lawsuits if the debt is proven to be coerced, and any agreement to waive these debtor protections is void.

Justice

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB1198?ys=2026RS