New YorkS 88302025-2026 Regular SessionSenateWALLET

Relates to right of action for claims arising out of coerced debts

Sponsored By: Cordell Cleare (Democratic)

Signed by Governor

RULESCODES

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 6 benefits, 0 costs, 5 mixed.

Court relief for coerced debt survivors

You must prove that all or part of the debt was coerced by showing it is more likely than not. The court then declares you not liable, stops collection, dismisses collection claims, and orders harmful credit information deleted. Relief also includes reasonable costs and attorney fees. A creditor can avoid this relief by showing its finding against coercion resulted from a genuine, good-faith error.

Collection pauses for documented coerced debt

Creditors must pause collection within 10 business days after receiving your sworn statement and adequate records of coerced debt. Records must identify the debt or portion and explain how it arose. Accepted records include police or qualifying official law-enforcement reports, court orders, or sworn or notarized statements from qualified professionals. Those professionals include law enforcement, licensed professionals, survivor-support workers, clergy, and court-appointed advocates; their statements must include contact information. Creditors must give the required notice for missing records, including a 35-business-day period to submit them, and identify missing information when required. Messages required by state or federal law or regulation do not count as collection activity.

Credit cleanup after coerced debt reviews

Within five business days after review, creditors restarting collection must explain their decision, good-faith reasons, and your reconsideration rights. Supporting materials cannot include another person's identifying information. Creditors that stop collection must notify you and instruct credit reporting agencies to delete information about you and the debt. Collection agencies and debt collectors must also tell the original creditor that the debt was found coerced. If anyone restarts collection after that finding, you can send a new notice and use the protections again.

Damages for harmed coerced debt survivors

If a creditor's procedure violation harms you, notify the creditor and give it 15 days to fix the problem. If the violation remains unfixed for you, you can sue unless the failure to fix it resulted from a genuine error. Available recovery includes $1,000 in statutory damages, actual damages, costs, and reasonable attorney fees.

Safer reviews for coerced debt survivors

Creditors must finish reviews within 30 business days after receiving all required information. Creditors reporting negative credit information must mark the account disputed within 10 business days after receiving that information. They must not contact the accused person and must use only the contact details you provide. Documents can be shared only with your written permission or when reasonably needed for an authorized court action. Your contact details require a safety-conscious court order for disclosure; sending materials to another address counts as unlawful disclosure. At your request, courts must protect you and immediate family members, including through sealed records, hidden personal details, or remote hearings.

Survivors can recover from debt coercers

The law prohibits causing another person to incur coerced debt and makes the coercer liable to the creditor. If you paid all or part of the debt, you can also seek recovery from the coercer. Recovery covers coerced amounts, including a remaining secured-debt balance, plus reasonable costs and attorney fees. The deadline is three years after the later finding of coercion by the creditor or a court.

Coerced debt defense with fee limits

If sued in New York to collect debt, you can raise coercion as a defense without first notifying the creditor. You must attach the required supporting documents to your answer. The person accused of causing the debt does not have to join the case. The law removes the prior express right to costs and attorney fees for winning this defense.

Limited relief for property-backed debt

Debts secured by real estate, including mortgages, are excluded except for claims against the person who caused the coercion. For debts backed by personal property, the notice process and debtor lawsuits against creditors do not apply. Creditors can still enforce their right to take the property. A coercion defense can reduce personal liability only for the balance left after repossession or surrender and sale.

New protections for coerced household debt

The law covers personal, family, or household debt caused by threats, force, manipulation, or similar pressure. Covered relationships include intimate partners, family or household members, trafficking, and specified child or adult caregiver relationships. Creditor duties cover debt collectors, collection agencies, and assignees who acquired debts for value, but not the person who caused the coercion. The protections begin 180 days after enactment and cover only debts incurred on or after that date. Section one's timing follows the separate law it amends. Creditors can still challenge fraudulent claims, and the law creates no duties beyond those it states.

Review and lawsuit deadlines for debtors

You can request reconsideration within 30 days after the creditor mails its decision to restart collection, and submit more records. The creditor must review your request within 30 days of receipt; further reviews are optional. The law states that reconsideration is not required before suing, but also describes a court route after reconsideration. That route applies after the creditor rejects coercion or gives no notice within 35 days that it found coercion. Your court filing must give detailed allegations and attach the records sent to the creditor. Lawsuits have a three-year deadline from your notice; a new notice after collection resumes following a review pause restarts that deadline.

State enforcement protects coerced debt survivors

The New York Attorney General can seek a court order stopping violations after giving at least 15 days' notice. The Attorney General does not have to prove anyone was injured and can subpoena evidence. Courts can order restitution, award allowances, and impose civil penalties up to $5,000 per violation. That penalty is unavailable when a creditor shows the violation resulted from a genuine, good-faith error.

Sponsors & Cosponsors

Sponsor

Cordell Cleare
Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 180 • No: 62

House vote • 3/10/2026

Assembly floor vote

Yes: 95 • No: 48

Senate vote • 3/5/2026

FLOOR Vote

Yes: 51 • No: 8

committee vote • 1/27/2026

Rules Committee Vote

Yes: 17 • No: 3

committee vote • 1/12/2026