New York Passes Law On Coerced Debt Protections

New York has enacted a landmark “Coerced Debt Right of Action Act” that gives survivors of domestic violence, elder abuse, and other economic abuse a new way to dispute and escape debts incurred through coercion, fraud, or force. The law also lets creditors pursue the abusers who actually caused the coerced debt, instead of holding survivors financially responsible.​

What the new law does

• Prohibits creditors from enforcing consumer debts that were incurred through fraud, duress, intimidation, threats, force, identity theft, or similar economic abuse.​

• Establishes a formal civil process for survivors to challenge coerced debts and seek a declaration that they are not liable for those debts.​

• Requires creditors to pause collection and stop certain activities once they receive proper notice and documentation that a debt is being claimed as coerced debt.​

How coerced debt is defined

• Coerced debt covers non‑consensual or abuse‑related credit transactions, such as an abuser opening accounts in a victim’s name without permission or forcing them to take out loans or credit cards.​

• It is treated as a form of economic abuse commonly seen in intimate partner violence and elder abuse cases, where control over money and credit is used to trap the victim.​

Process for survivors

• Survivors can send a written statement identifying specific debts as coerced, along with “adequate documentation” such as police reports, FTC identity theft reports, court orders, or sworn certifications from qualified third parties (like advocates, lawyers, or social workers).​

• Once this notice is received, the creditor must investigate within set timelines, cease collection during the review, and, if the debt is found coerced, stop enforcing it and correct credit reporting so the survivor’s credit is not harmed by that debt.​

Rights against creditors and abusers

• The law gives survivors a cause of action to go to court and obtain a declaratory judgment that all or part of a debt is coerced debt if a creditor does not provide appropriate relief.​

• It also creates a cause of action allowing creditors and, in some situations, survivors who already paid coerced debt to sue the abuser for the amount of the coerced debt plus reasonable costs and attorneys’ fees.​

Why this is significant

• New York becomes at least the eighth state to adopt coerced‑debt protections, but it is the first major financial center to put this kind of comprehensive framework into law.​

• Legal aid and advocacy groups describe the law as transformative because it removes a key financial barrier that keeps many survivors in dangerous relationships and helps shift liability onto those who used debt as a tool of abuse.​

A “coerced debt survivor” under New York’s new law is any person who has consumer debt in their name that was incurred through economic abuse—such as fraud, duress, intimidation, threats, force, identity theft, or similar coercive conduct—rather than by their voluntary, informed consent. The law is written broadly, so it covers survivors of intimate partner violence, family violence, elder abuse, and other situations where an abuser uses credit or debt to control someone.​

Core legal definition

• The statute defines coerced debt as debt incurred “as a result of economic abuse,” including by fraud, duress, intimidation, threat, force, coercion, manipulation, undue influence, or non‑consensual use of the person’s information.​

• Anyone who has such debt in their name can qualify as the survivor/putative debtor protected by the law, regardless of marital status or relationship type, as long as the abusive conduct caused the debt.​

Who is explicitly protected

• Legislative materials state the law is intended to protect domestic violence survivors and others who experience economic abuse, including elder abuse and similar exploitation.​

• Advocacy groups describe covered survivors as people whose partners, family members, caregivers, or other abusers opened accounts, ran up balances, or forced them into loans or credit cards they did not freely choose.​

Key conditions to qualify

• The person must have a consumer debt (like credit cards, personal loans, retail accounts) in their name that was created without their true consent or through coercive tactics.​

• To invoke protections, the survivor must submit documentation showing the debt was incurred without their knowledge or through coercion (for example, police or court records, FTC identity theft reports, or certifications from qualified third parties such as advocates or social workers).​

Relationship to the abuser

• The law does not require that the abuser be a current spouse or partner, only that they “caused” the coerced debt through qualifying abusive conduct.​

• The individual who caused the coerced debt is labeled the perpetrator and can be held civilly liable for the amount of coerced debt and associated costs and attorneys’ fees.​

Practical examples

• A person whose partner secretly opened credit cards in their name and maxed them out, or who was forced under threats to cosign or take out a loan, would qualify as a coerced debt survivor for those accounts.​

• An older adult whose caregiver used their personal information to open accounts or pressured them into loans they did not understand or want can also qualify for protections under this law.​