H.B. 561
GENERAL ASSEMBLY OF NORTH CAROLINA
Apr 3, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH10259-LR-24A
Short Title: North Carolina Coerced Debt Relief Act. (Public)
Sponsors: Representative T. Brown.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO PROVIDE CIVIL RELIEF FROM COERCED DEBT.
3 The General Assembly of North Carolina enacts:
4 SECTION 1.(a) The General Assembly finds that survivors of domestic violence
5 and the children of domestic violence survivors undergo multiple forms of abuses, including
6 monetary abuse, and that survivors of domestic violence need multiple pathways to remedy
7 coerced debt and to repair credit reports. Therefore, it is the public policy of this State to provide
8 remedies for economic abuse against domestic violence survivors.
9 SECTION 1.(b) The General Statutes are amended by adding a new Chapter to read:
10 "Chapter 1H.
11 "Coerced Debt Relief Act.
12 "§ 1H-1. Short title.
13 This Chapter shall be known and may be cited as the North Carolina Coerced Debt Relief
14 Act.
15 "§ 1H-2. Definitions.
16 The following definitions apply to this Chapter:
17 (1) Abuse. – As defined in G.S. 50C-1(1).
18 (2) Adequate documentation. – Documentation that identifies a particular debt, or
19 portion thereof, as coerced debt, describes the circumstances under which the
20 coerced debt was incurred, and takes the form of any of the following:
21 a. A police report.
22 b. A Federal Trade Commission identity theft report identifying a
23 particular debt, or portion thereof, as coerced, but not as identity theft.
24 c. A court order issued under Chapter 50 or Chapter 50B of the General
25 Statutes relating to domestic violence, Chapter 7B of the General
26 Statutes relating to an abused, neglected, or dependent juvenile, or
27 G.S. 108A-106 relating to disabled adults.
28 d. A sworn written certification from a qualified third-party professional
29 based on information they received while acting in a professional
30 capacity. This documentation shall be signed by a qualified third-party
31 professional and display the letterhead, address, and telephone number
32 of the office, institution, center, or organization, as appropriate, that
33 engages or employs, whether financially compensated or not, the
34 qualified third-party professional, or, if the qualified third-party
35 professional is self-employed, the documentation shall display the
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1 letterhead, address, and telephone number of the qualified third-party
2 professional.
3 (3) Claim. – A right to payment, whether or not that right is reduced to judgment,
4 liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
5 undisputed, legal, or equitable.
6 (4) Claimant. – A person or an entity who has or purports to have a claim against
7 a debtor arising from coerced debt, or that person's or entity's successor or
8 assignee. This definition includes, but is not limited to, a debt collector or a
9 debt buyer. The term does not include a person who caused the claim
10 described in subdivision (3) of this section to arise through duress,
11 intimidation, threat of force, force, fraud, or undue influence perpetrated
12 against the debtor.
13 (5) Coerced debt. – A particular debt, or portion thereof, for personal, family, or
14 household use in the name of a debtor who is a victim of domestic violence as
15 defined in G.S. 50B-1, or a victim of domestic abuse as defined in
16 G.S. 14-32.3(a), or a current or former child in foster care as defined in
17 G.S. 131D-10.2, incurred as a result of duress, intimidation, threat of force,
18 force, or undue influence.
19 (6) Debtor. – A person who owes or is otherwise liable for coerced debt.
20 (7) Fraud. – An initial fraudulent act that is perpetrated against the debtor.
21 (8) Immediate family member. – As defined in G.S. 53-244.030(13).
22 (9) Person. – A natural person.
23 (10) Qualified third-party professional. – Any of the following who also has a
24 degree, certificate, or license from an accredited program for counseling
25 domestic violence victims:
26 a. Any agent of a domestic violence or sexual assault program, as defined
27 in G.S. 8-53.12.
28 b. A guardian ad litem or attorney appointed in accordance with
29 G.S. 1A-1, Rule 17 of the Rules of Civil Procedure, or G.S. 7B-601.
30 c. A board-certified psychiatrist or psychologist.
31 d. A licensed marriage and family therapist.
32 e. A licensed professional clinical counselor.
33 f. A licensed clinical social worker.
34 g. A social worker or caseworker employed by a county department of
35 social services for the purposes described in G.S. 108A-100 or
36 G.S. 7B-100.
37 h. A non-licensed or credentialed domestic violence professional who
38 otherwise meets the criteria of G.S. 8-53.12(a)(1).
39 (11) Sworn written certification. – A document in which the author declares under
40 penalty of perjury as true any material fact, and which is accompanied by the
41 following, to the extent that an item listed below is relevant to the debtor's
42 allegation that the debt is coerced debt:
43 a. A copy of the debtor's drivers license or identification card, as issued
44 by the State.
45 b. Any other identification document that supports the statement that the
46 particular debt, or portion thereof, is coerced debt.
47 c. An express statement that the debtor did not willingly authorize the
48 use of the debtor's name or personal information for incurring the
49 coerced debt, and specific facts supporting the claim of coerced debt,
50 if available, and, if not all of the debt was coerced, a statement
51 identifying the portion thereof that was coerced.
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1 d. Any available correspondence disputing the coerced debt after
2 transaction information has been provided to the debtor.
3 e. Information, if known by the debtor, including, but not limited to, a
4 credit card number or loan number, that can be used by the claimant
5 to identify the account associated with the coerced debt and the person
6 or persons in whose name the debt was incurred.
7 f. The identity of the person or persons who coerced the debtor into
8 incurring the debt and contact information for that person or persons,
9 if known by the debtor; except when, in the alternative, the debtor
10 executes sworn statements asserting that disclosing this information is
11 likely to result in abuse to the debtor or an immediate family member
12 of the debtor and identifying the name, address, and telephone number
13 of the person or persons who coerced the debtor into incurring the debt.
14 g. A telephone number for contacting the person signing the certification
15 concerning any additional information or questions, or direction that
16 further communications to the debtor be in writing only, with the
17 mailing address specified in the statement.
18 h. The certification required by this subdivision shall be sufficient if it is
19 in substantially the following form:
20 "I declare under penalty of perjury that the representations made herein are true, correct, and
21 contain no material omissions of fact.
22 _______(Date and Place)________ _______(Signature)________"
23 "§ 1H-3. Scope.
24 (a) This Chapter does not apply to secured debts.
25 (b) This Chapter does not allow a court to order a claimant to refund any moneys already
26 paid on a debt that is determined to be coerced.
27 (c) This Chapter does not diminish the rights of a claimant to recover payment for a
28 coerced debt from the person or persons who coerced a debtor into incurring that debt.
29 (d) This Chapter does not reduce or eliminate any other rights or defenses available to a
30 debtor or claimant pursuant to any other law.
31 "§ 1H-4. Civil liability.
32 A person shall not cause another person to incur a coerced debt. A person who causes another
33 person to incur a coerced debt in violation of this section shall be civilly liable to the claimant
34 for the amount of the debt, or portion of said debt to be determined by a court, plus the claimant's
35 attorney's fees and costs.
36 "§ 1H-5. Notice of coerced debts.
37 (a) Upon receipt of both of the following, a claimant shall cease collection activities until
38 completion of the review provided in subsection (c) of this section:
39 (1) Adequate documentation.
40 (2) The debtor's sworn written certification that a particular debt, or portion
41 thereof, being collected is coerced debt.
42 (b) If a debtor notifies a claimant orally that a particular debt, or portion thereof, being
43 collected is coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtor's
44 notification must be in writing. If a debtor notifies a claimant in writing that a particular debt, or
45 portion thereof, being collected is coerced debt, but omits information required by subsection (a)
46 of this section, and, if the claimant does not cease collection activities, the claimant shall provide
47 written notice to the debtor of the additional information that is required.
48 (c) Within 10 business days of receiving the complete statement and information
49 described in subsection (a) of this section, the claimant shall, if the claimant furnished adverse
50 information about the debtor to a consumer credit reporting agency, notify the consumer credit
51 reporting agency that the account is disputed. The claimant shall initiate a review considering all
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1 of the information provided by the debtor and other information available to the claimant in its
2 file. Within 30 days of completing the review, the claimant shall notify the debtor in writing of
3 the claimant's determination and the good-faith basis for that determination. The claimant shall
4 not recommence collection activities until the debtor has been notified in writing of the good-faith
5 determination that the information does not establish that the particular debt, or portion thereof,
6 is coerced debt.
7 (d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable
8 or not liable for the particular debt, or portion thereof, shall arise if the claimant decides after the
9 review described in subsection (c) of this section to cease or recommence collection activities.
10 The exercise or nonexercise of rights under this section is not a waiver of any other right or
11 defense of the debtor or claimant.
12 (e) At least 30 days before filing an action pursuant to G.S. 1H-6 or other action against
13 a claimant in connection with an allegedly coerced debt, a debtor shall submit notice of the
14 debtor's intent to file an action against the claimant and documents that comply with subsection
15 (a) of this section in writing to the claimant. This 30-day period shall begin to run when the
16 claimant receives this written notice. This written notice shall meet all of the following
17 requirements:
18 (1) The notice shall be sent by certified mail, overnight delivery, or other method
19 that allows for confirmation of the delivery date.
20 (2) The notice shall be sent to an address made available to the debtor by the
21 claimant for receipt of the notice, or, if an address has not been identified by
22 the claimant, to the claimant's principal place of business as identified by the
23 Secretary of State. If an address is unavailable through the Secretary of State's
24 website, the debtor may use the correspondence address of the claimant, or in
25 the case of a debt collector, the address on file with the Department of
26 Insurance for licensing purposes.
27 (f) The debtor shall not commence an action described in G.S. 1H-6 or other action
28 against a claimant in connection with an allegedly coerced debt if the claimant informs the debtor
29 that it has ceased all efforts to collect on the particular debt, or portion thereof, identified in the
30 written notice pursuant to subsection (e) of this section and the debtor receives written notice of
31 this cessation before the expiration of the 30-day period.
32 (g) The debtor may commence an action described in G.S. 1H-6 or other action against a
33 claimant in connection with an allegedly coerced debt if either of the following conditions is
34 satisfied:
35 (1) The 30-day period described in subsection (e) of this section expires and the
36 collection activities have not ceased or the debtor has not received written
37 notice that collection activities have ceased.
38 (2) The debtor receives written notice pursuant to subsection (c) of this section of
39 the claimant's good-faith determination that the information does not establish
40 that the particular debt, or portion thereof, is coerced debt.
41 (h) A claimant that ceases collection activities under this section and does not
42 recommence those collection activities shall do both of the following:
43 (1) If the claimant has furnished adverse information to a consumer credit
44 reporting agency regarding the debtor and a particular debt, or portion thereof,
45 notify the agency to delete that information no later than 10 business days after
46 making its determination.
47 (2) If the claimant is a debt collector, notify the creditor no later than 10 business
48 days after making its determination that collection activities have been
49 terminated based upon the debtor's assertion that a particular debt, or portion
50 thereof, being collected is coerced debt.
51 "§ 1H-6. Order establishing relief from coerced debt.
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1 (a) A debtor may bring an action against a claimant to establish that a particular debt, or
2 portion thereof, is coerced debt.
3 (b) In an action brought by a claimant to recover a particular debt against the debtor, the
4 debtor may file a cross-complaint to establish that the particular debt, or portion thereof, is
5 coerced debt. The notice described in G.S. 1H-5(c) shall not be required as a prerequisite to filing
6 a cross-complaint. A debtor shall plead the allegations of coerced debt with particularity and shall
7 do either of the following:
8 (1) Attach the documents provided to the claimant pursuant to G.S. 1H-5(a) to
9 any complaint.
10 (2) Attach the documents identified in G.S. 1H-5(a) to any cross-complaint.
11 (c) If the debto