New York Refines Coerced Debt Legislation

New York has enacted and is now refining a coerced debt law that creates a civil process for survivors of economic abuse to challenge debts incurred through coercion and to shift liability onto the abuser instead of the survivor.​

What coerced debt means

• Coerced debt is defined as consumer debt incurred as a result of economic abuse, including fraud, duress, intimidation, threat, force, coercion, manipulation, undue influence, or non‑consensual use of the debtor’s personal information.​

• Economic abuse can occur in intimate or familial relationships, trafficking, or caregiving situations where an abuser controls or sabotages the victim’s finances and credit.​

Core features of New York’s law

• The law prohibits creditors from enforcing certain coerced consumer debts against survivors once those debts are established as coerced.​

• It creates a structured process for disputing coerced debts and gives survivors a private right of action and affirmative defenses to stop collection and clear their credit reports.​

Process for disputing coerced debt

• A debtor may submit a sworn statement identifying specific debt as coerced, plus “adequate documentation” such as a police or identity‑theft report, court order, or statement from a professional (e.g., advocate, attorney, health provider, clergy).​

• Once such notice is provided, the creditor must pause collection while it investigates and then either cease collection and instruct credit bureaus to delete adverse information or explain in writing why it rejects the claim and what further rights the debtor has.​

Refinements / chapter amendments

• The 2025–2026 chapter amendment bill S8830 clarifies and narrows the statutory definition of coerced debt and makes structural changes to how the law applies, including when debtor information may be disclosed to pursue the actual wrongdoer.​

• These refinements respond to concerns from the governor and stakeholders about scope and implementation while preserving a right of action for coerced debt claims under the amended General Business Law.​

Remedies against abusers and for survivors

• Survivors can seek declaratory and injunctive relief, statutory and actual damages, attorneys’ fees, and correction or deletion of negative credit information related to coerced debts.​

• Creditors and/or survivors may bring civil actions against the person who caused the coerced debt to recover the coerced amount and litigation costs, effectively redirecting liability from the survivor to the abuser.​