New York Law Takes Effect Allowing Survivors to Seek Coerced Debt Relief

A New York law that takes effect on Wednesday gives survivors of domestic violence, elder abuse and human trafficking a mechanism to challenge debt they say was incurred under coercion.

Survivors can submit a Notice of Coerced Debt to creditors.

Creditors must then review the account, mark the debt disputed on credit reports, and stop collection efforts if the claim is accepted. The creditor may still pursue the alleged abuser. The law was signed last year and narrowed after input from financial institutions. It applies only to debt incurred on or after June 17.

Juliette, who asked CBS News not to use her full name, said she accumulated nearly $7,000 in credit card debt after her former husband used a card issued in her name and stopped making payments. She said an order of protection prevented her from meeting the bank in person to close the account.

Her credit score fell from around 800 to 460, affecting her housing options. After divorce proceedings concluded in 2023, a court assigned responsibility for the debt to her former husband. The new law does not retroactively cover her case.

Braunstein, policy director for Her Justice, stated that a survivor's liability is discharged if the notice succeeds, rather than the debt itself being erased. Susanna Saul, director of legal services for Her Justice, said the law creates a direct channel with banks rather than requiring resolution through divorce courts.

Erika Sussman, executive director of the Center for Survivor Agency and Justice, said half of domestic violence survivors report coerced debts of up to $20,000. Experts have raised questions about how banks will process requests under the new law. Survivors retain the right to sue creditors or alleged abusers who fail to comply.