The proposed bill amends Title 12 of the Pennsylvania Consolidated Statutes by adding a new chapter, Chapter 59, which establishes protections against coerced debt. This chapter defines "coerced debt" as any debt incurred due to domestic violence, fraud, or other forms of coercion. It outlines the responsibilities of the Treasury Department to develop a coerced debt dispute petition that debtors can use to contest debts they believe were incurred under coercive circumstances. The bill also specifies the process for submitting a petition, including the necessary information and documentation required from the debtor, as well as the creditor's obligations upon receiving the petition.

Additionally, the bill mandates that creditors must make a determination regarding the status of the debt within ten business days of receiving the petition. If the creditor finds that the debt qualifies as coerced debt, they must cease collection efforts and notify relevant parties, including consumer reporting agencies. If the creditor determines that the debt is not coerced, the debtor has the right to challenge this decision in court within two years. The bill aims to provide a legal framework for individuals affected by coerced debt, ensuring they have a means to dispute such debts and seek justice. The act is set to take effect 90 days after its passage.

Statutes/Laws affected:
Printer's No. 3117 (Mar 31, 2026):