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Assembly approves chapter amendment creating process for victims of coerced debt
Summary
The Assembly passed a chapter amendment (Rules Report 29, Assembly No. 9460) providing a process for debtors to challenge coerced debt with sworn statements and limited third‑party documentation and pausing collection during review; members debated fraud risk, creditor burdens and inconsistent language in the text. Vote: 96–47.
The New York State Assembly passed Rules Report 29 (Assembly No. 9460) on March 10, a chapter amendment to the General Business Law establishing procedures for people who say a debt was coerced to seek review by creditors and, if warranted, to hold abusers financially responsible.
Sponsor Miss Rosenthal said the amendment "provides a path" for survivors of coerced debt to challenge burdensome obligations inflicted by abusers, and that creditors retain review mechanisms. She described the bill as intended to help survivors rebuild and emphasized that creditors "have enough opportunity to decide" whether a coerced‑debt claim is valid.
Members pressing the sponsor raised implementation and fairness concerns. Questioners asked how creditors could reliably determine that debts were coerced without interviewing alleged coercers, whether the bill asks creditors to act like courts or social‑service agencies, and whether the text contains contradictory language about whether a request for reconsideration is required before a lawsuit can be filed. One critic said, "these two statements literally say opposite things," pointing to inconsistent subsections and requesting later corrective legislation.
The bill allows a debtor to submit a sworn statement under penalty of perjury and to provide one form of corroborating documentation from a qualified third party (examples cited on the floor included social workers, attorneys, doctors, nurses, therapists, clergy and employees of nonprofit agencies). The sponsor said notarized statements and perjury penalties are part of the process; creditors pause collection activity while reviewing claims and may recommence collections after review if they find the claim invalid. The floor also discussed that debtors may still pursue court remedies and that courts could award statutory damages, actual damages, costs and reasonable attorney's fees.
Opponents warned of potential misuse, noting that perjury charges in civil contexts are rare and that fraud safeguards in the text rely largely on existing perjury law and creditors' internal review procedures. Supporters said similar protections have been adopted in other states and that survivors often confide in trusted professionals who can provide sworn statements in their official capacities.
The clerk recorded the party vote as Ayes 96, Nays 47 and announced the bill passed. The act was read as taking effect immediately.
Proponents said the measure opens a pathway for victims of economic abuse; critics said it requires further drafting to resolve inconsistencies and to clarify implementation before broader application.
