Legislative Council briefs Senate Judiciary on H.385, a bill to bar and remedy 'coerced debt' for survivors

Maria Royal of the Legislative Council walked the Senate Judiciary Committee through H.385 on April 15, describing two substantive pieces: a new subchapter creating protections and remedies for "coerced debt" and separate banking-customer protections. The committee spent most of its time on the civil-legal remedies that would apply when debt is alleged to have been incurred through domestic abuse, human trafficking or the abuse, neglect or exploitation of a vulnerable adult.

Royal told the committee that coerced debt covers secured or unsecured obligations incurred in a debtor’s name through the use of the debtor’s personal information without authorization, or by threat, fraud, force, intimidation, undue influence or similar means. "If one of those individuals has their personal information used either under threat or fraud or unknowingly to incur debt in their name that there would be some protections available to that person," Royal said.

Under the bill, a debtor who files a sworn "statement of coerced debt" plus "adequate documentation" would shift the initial burden: the debtor may establish a prima facie case and the creditor would then have 30 days to investigate and either cease collection and notify credit reporting agencies to remove…