Amended IN Assembly June 16, 2022 Amended IN Senate May 19, 2022 Amended IN Senate May 02, 2022 Amended IN Senate April 18, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 975Introduced by Senator MinFebruary 10, 2022An act to add Title 1.81.35 (commencing with Section 1798.97.1) to Part 4 of Division 3 of the Civil Code, relating to debt. LEGISLATIVE COUNSEL'S DIGESTSB 975, as amended, Min. Debt: coerced debts: right of action. debts.Existing law regulates various practices related to debt, including its sale and collection. Existing law provides for various private rights of action, including for a patient against a psychotherapist for sexual contact, as defined and specified, a peace officer against an individual who has filed a false complaint with the officers employing agency, as specified, and a person against another for sexual harassment, as defined and specified.This bill would require a claimant, upon receipt from the debtor of adequate documentation, a sworn written statement that some or all of the debt being collected is a coerced debt, and other specified documentation, to cease collection activities until the claimant completes a review, as defined and specified. The bill would also create a right of action that would allow an alleged debtor to bring an action or a claim against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt, as specified and defined. specified. If an alleged debtor establishes that a claim claim, or a portion thereof, arises from a coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunctionrestraining prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim, or the portion thereof that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor. The bill would require a sworn written certification to be declared under penalty of perjury. By expanding the scope of a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Economic abuse is a serious issue impacting survivors of domestic violence, survivors of elder or dependent adult abuse, and foster youth, and other individuals. youth.(b) Coerced or fraudulent debts, a common component of economic abuse, can ruin an individuals credit history and financial stability, including by leaving the individual vulnerable to debt collection, substantial payment expectations, and bankruptcy. (c) The debt and poor credit score resulting from economic abuse can have long-term consequences for survivors that create barriers to education, housing, and employment opportunities. (d) Fifty-two percent of domestic violence survivors report experiencing coerced and fraudulent debt of over $10,000 per year. (e) In cases of elder abuse, family members and other trusted individuals can use their powerful positions to commit this type of abuse and take out debts through coercion or fraud. (f) Youth in foster care are particularly vulnerable because they may have multiple placements that give many adults access to their personal information. (g)A pilot project in the City of Los Angeles worked with over 100 foster youth who had hundreds of separate accounts reported in their names as the result of errors or identity theft. A 2018 survey conducted by the Identity Theft Resource Center and Symantec that included youth in the Counties of Santa Clara and San Diego found that 15 percent of foster youth surveyed were victims of identity theft. SEC. 2. Title 1.81.35 (commencing with Section 1798.97.1) is added to Part 4 of Division 3 of the Civil Code, to read:TITLE 1.81.35. Coerced Debt1798.97.1. For purposes of this title, the following definitions apply:(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.(d)(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.(g) Qualified third-party professional means any of the following:(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.(5) A board certified psychiatrist or psychologist.(6) A licensed marriage and family therapist.(7) A licensed professional clinical counselor.(8) A licensed clinical social worker.(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:(1) A copy of the debtors drivers license or identification card, as issued by the state.(2) Any other identification document that supports the statement of that the debt in question is coerced debt.(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify that the representations made herein are true, correct, and contain no material omissions of fact._______(Date and Place)________ _______(Signature)________1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):(1) One or more pieces of adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1). (c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt. (g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.(g)(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Amended IN Assembly June 16, 2022 Amended IN Senate May 19, 2022 Amended IN Senate May 02, 2022 Amended IN Senate April 18, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 975Introduced by Senator MinFebruary 10, 2022An act to add Title 1.81.35 (commencing with Section 1798.97.1) to Part 4 of Division 3 of the Civil Code, relating to debt. LEGISLATIVE COUNSEL'S DIGESTSB 975, as amended, Min. Debt: coerced debts: right of action. debts.Existing law regulates various practices related to debt, including its sale and collection. Existing law provides for various private rights of action, including for a patient against a psychotherapist for sexual contact, as defined and specified, a peace officer against an individual who has filed a false complaint with the officers employing agency, as specified, and a person against another for sexual harassment, as defined and specified.This bill would require a claimant, upon receipt from the debtor of adequate documentation, a sworn written statement that some or all of the debt being collected is a coerced debt, and other specified documentation, to cease collection activities until the claimant completes a review, as defined and specified. The bill would also create a right of action that would allow an alleged debtor to bring an action or a claim against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt, as specified and defined. specified. If an alleged debtor establishes that a claim claim, or a portion thereof, arises from a coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunctionrestraining prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim, or the portion thereof that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor. The bill would require a sworn written certification to be declared under penalty of perjury. By expanding the scope of a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES
Amended IN Assembly June 16, 2022 Amended IN Senate May 19, 2022 Amended IN Senate May 02, 2022 Amended IN Senate April 18, 2022
Amended IN Assembly June 16, 2022
Amended IN Senate May 19, 2022
Amended IN Senate May 02, 2022
Amended IN Senate April 18, 2022
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Senate Bill
No. 975
Introduced by Senator MinFebruary 10, 2022
Introduced by Senator Min
February 10, 2022
An act to add Title 1.81.35 (commencing with Section 1798.97.1) to Part 4 of Division 3 of the Civil Code, relating to debt.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 975, as amended, Min. Debt: coerced debts: right of action. debts.
Existing law regulates various practices related to debt, including its sale and collection. Existing law provides for various private rights of action, including for a patient against a psychotherapist for sexual contact, as defined and specified, a peace officer against an individual who has filed a false complaint with the officers employing agency, as specified, and a person against another for sexual harassment, as defined and specified.This bill would require a claimant, upon receipt from the debtor of adequate documentation, a sworn written statement that some or all of the debt being collected is a coerced debt, and other specified documentation, to cease collection activities until the claimant completes a review, as defined and specified. The bill would also create a right of action that would allow an alleged debtor to bring an action or a claim against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt, as specified and defined. specified. If an alleged debtor establishes that a claim claim, or a portion thereof, arises from a coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunctionrestraining prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim, or the portion thereof that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor. The bill would require a sworn written certification to be declared under penalty of perjury. By expanding the scope of a crime, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law regulates various practices related to debt, including its sale and collection. Existing law provides for various private rights of action, including for a patient against a psychotherapist for sexual contact, as defined and specified, a peace officer against an individual who has filed a false complaint with the officers employing agency, as specified, and a person against another for sexual harassment, as defined and specified.
This bill would require a claimant, upon receipt from the debtor of adequate documentation, a sworn written statement that some or all of the debt being collected is a coerced debt, and other specified documentation, to cease collection activities until the claimant completes a review, as defined and specified. The bill would also create a right of action that would allow an alleged debtor to bring an action or a claim against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt, as specified and defined. specified. If an alleged debtor establishes that a claim claim, or a portion thereof, arises from a coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunctionrestraining prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim, or the portion thereof that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor. The bill would require a sworn written certification to be declared under penalty of perjury. By expanding the scope of a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Economic abuse is a serious issue impacting survivors of domestic violence, survivors of elder or dependent adult abuse, and foster youth, and other individuals. youth.(b) Coerced or fraudulent debts, a common component of economic abuse, can ruin an individuals credit history and financial stability, including by leaving the individual vulnerable to debt collection, substantial payment expectations, and bankruptcy. (c) The debt and poor credit score resulting from economic abuse can have long-term consequences for survivors that create barriers to education, housing, and employment opportunities. (d) Fifty-two percent of domestic violence survivors report experiencing coerced and fraudulent debt of over $10,000 per year. (e) In cases of elder abuse, family members and other trusted individuals can use their powerful positions to commit this type of abuse and take out debts through coercion or fraud. (f) Youth in foster care are particularly vulnerable because they may have multiple placements that give many adults access to their personal information. (g)A pilot project in the City of Los Angeles worked with over 100 foster youth who had hundreds of separate accounts reported in their names as the result of errors or identity theft. A 2018 survey conducted by the Identity Theft Resource Center and Symantec that included youth in the Counties of Santa Clara and San Diego found that 15 percent of foster youth surveyed were victims of identity theft. SEC. 2. Title 1.81.35 (commencing with Section 1798.97.1) is added to Part 4 of Division 3 of the Civil Code, to read:TITLE 1.81.35. Coerced Debt1798.97.1. For purposes of this title, the following definitions apply:(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.(d)(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.(g) Qualified third-party professional means any of the following:(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.(5) A board certified psychiatrist or psychologist.(6) A licensed marriage and family therapist.(7) A licensed professional clinical counselor.(8) A licensed clinical social worker.(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:(1) A copy of the debtors drivers license or identification card, as issued by the state.(2) Any other identification document that supports the statement of that the debt in question is coerced debt.(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify that the representations made herein are true, correct, and contain no material omissions of fact._______(Date and Place)________ _______(Signature)________1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):(1) One or more pieces of adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1). (c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt. (g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.(g)(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all of the following:(a) Economic abuse is a serious issue impacting survivors of domestic violence, survivors of elder or dependent adult abuse, and foster youth, and other individuals. youth.(b) Coerced or fraudulent debts, a common component of economic abuse, can ruin an individuals credit history and financial stability, including by leaving the individual vulnerable to debt collection, substantial payment expectations, and bankruptcy. (c) The debt and poor credit score resulting from economic abuse can have long-term consequences for survivors that create barriers to education, housing, and employment opportunities. (d) Fifty-two percent of domestic violence survivors report experiencing coerced and fraudulent debt of over $10,000 per year. (e) In cases of elder abuse, family members and other trusted individuals can use their powerful positions to commit this type of abuse and take out debts through coercion or fraud. (f) Youth in foster care are particularly vulnerable because they may have multiple placements that give many adults access to their personal information. (g)A pilot project in the City of Los Angeles worked with over 100 foster youth who had hundreds of separate accounts reported in their names as the result of errors or identity theft. A 2018 survey conducted by the Identity Theft Resource Center and Symantec that included youth in the Counties of Santa Clara and San Diego found that 15 percent of foster youth surveyed were victims of identity theft.
SECTION 1. The Legislature finds and declares all of the following:(a) Economic abuse is a serious issue impacting survivors of domestic violence, survivors of elder or dependent adult abuse, and foster youth, and other individuals. youth.(b) Coerced or fraudulent debts, a common component of economic abuse, can ruin an individuals credit history and financial stability, including by leaving the individual vulnerable to debt collection, substantial payment expectations, and bankruptcy. (c) The debt and poor credit score resulting from economic abuse can have long-term consequences for survivors that create barriers to education, housing, and employment opportunities. (d) Fifty-two percent of domestic violence survivors report experiencing coerced and fraudulent debt of over $10,000 per year. (e) In cases of elder abuse, family members and other trusted individuals can use their powerful positions to commit this type of abuse and take out debts through coercion or fraud. (f) Youth in foster care are particularly vulnerable because they may have multiple placements that give many adults access to their personal information. (g)A pilot project in the City of Los Angeles worked with over 100 foster youth who had hundreds of separate accounts reported in their names as the result of errors or identity theft. A 2018 survey conducted by the Identity Theft Resource Center and Symantec that included youth in the Counties of Santa Clara and San Diego found that 15 percent of foster youth surveyed were victims of identity theft.
SECTION 1. The Legislature finds and declares all of the following:
### SECTION 1.
(a) Economic abuse is a serious issue impacting survivors of domestic violence, survivors of elder or dependent adult abuse, and foster youth, and other individuals. youth.
(b) Coerced or fraudulent debts, a common component of economic abuse, can ruin an individuals credit history and financial stability, including by leaving the individual vulnerable to debt collection, substantial payment expectations, and bankruptcy.
(c) The debt and poor credit score resulting from economic abuse can have long-term consequences for survivors that create barriers to education, housing, and employment opportunities.
(d) Fifty-two percent of domestic violence survivors report experiencing coerced and fraudulent debt of over $10,000 per year.
(e) In cases of elder abuse, family members and other trusted individuals can use their powerful positions to commit this type of abuse and take out debts through coercion or fraud.
(f) Youth in foster care are particularly vulnerable because they may have multiple placements that give many adults access to their personal information.
(g)A pilot project in the City of Los Angeles worked with over 100 foster youth who had hundreds of separate accounts reported in their names as the result of errors or identity theft. A 2018 survey conducted by the Identity Theft Resource Center and Symantec that included youth in the Counties of Santa Clara and San Diego found that 15 percent of foster youth surveyed were victims of identity theft.
SEC. 2. Title 1.81.35 (commencing with Section 1798.97.1) is added to Part 4 of Division 3 of the Civil Code, to read:TITLE 1.81.35. Coerced Debt1798.97.1. For purposes of this title, the following definitions apply:(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.(d)(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.(g) Qualified third-party professional means any of the following:(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.(5) A board certified psychiatrist or psychologist.(6) A licensed marriage and family therapist.(7) A licensed professional clinical counselor.(8) A licensed clinical social worker.(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:(1) A copy of the debtors drivers license or identification card, as issued by the state.(2) Any other identification document that supports the statement of that the debt in question is coerced debt.(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify that the representations made herein are true, correct, and contain no material omissions of fact._______(Date and Place)________ _______(Signature)________1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):(1) One or more pieces of adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1). (c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt. (g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.(g)(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.
SEC. 2. Title 1.81.35 (commencing with Section 1798.97.1) is added to Part 4 of Division 3 of the Civil Code, to read:
### SEC. 2.
TITLE 1.81.35. Coerced Debt1798.97.1. For purposes of this title, the following definitions apply:(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.(d)(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.(g) Qualified third-party professional means any of the following:(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.(5) A board certified psychiatrist or psychologist.(6) A licensed marriage and family therapist.(7) A licensed professional clinical counselor.(8) A licensed clinical social worker.(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:(1) A copy of the debtors drivers license or identification card, as issued by the state.(2) Any other identification document that supports the statement of that the debt in question is coerced debt.(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify that the representations made herein are true, correct, and contain no material omissions of fact._______(Date and Place)________ _______(Signature)________1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):(1) One or more pieces of adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1). (c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt. (g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.(g)(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.
TITLE 1.81.35. Coerced Debt1798.97.1. For purposes of this title, the following definitions apply:(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.(d)(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.(g) Qualified third-party professional means any of the following:(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.(5) A board certified psychiatrist or psychologist.(6) A licensed marriage and family therapist.(7) A licensed professional clinical counselor.(8) A licensed clinical social worker.(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:(1) A copy of the debtors drivers license or identification card, as issued by the state.(2) Any other identification document that supports the statement of that the debt in question is coerced debt.(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify that the representations made herein are true, correct, and contain no material omissions of fact._______(Date and Place)________ _______(Signature)________1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):(1) One or more pieces of adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1). (c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt. (g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.(g)(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.
TITLE 1.81.35. Coerced Debt
TITLE 1.81.35. Coerced Debt
1798.97.1. For purposes of this title, the following definitions apply:(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.(d)(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.(g) Qualified third-party professional means any of the following:(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.(5) A board certified psychiatrist or psychologist.(6) A licensed marriage and family therapist.(7) A licensed professional clinical counselor.(8) A licensed clinical social worker.(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:(1) A copy of the debtors drivers license or identification card, as issued by the state.(2) Any other identification document that supports the statement of that the debt in question is coerced debt.(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify that the representations made herein are true, correct, and contain no material omissions of fact._______(Date and Place)________ _______(Signature)________
1798.97.1. For purposes of this title, the following definitions apply:
(a) Adequate documentation means documentation that identifies a particular debt, or portion thereof, as coerced debt, and includes the identity of any person alleged to have caused the debt. The survivor shall not be required to disclose the identity of any person alleged to have caused coerced debt if they provide a sworn statement that disclosure would compromise their safety or the safety of their loved ones. Adequate documentation means any of the following:
(1) A police report indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.
(2) A Federal Trade Commission identity theft report finding that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, is allegedly coerced debt.
(3) A court order issued pursuant to Section 6340 of the Family Code relating to domestic violence, Section 213.5 of the Welfare and Institutions Code relating to a dependent of juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt as having been incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or portion thereof, as allegedly being coerced debt.
(4) (A) Documentation A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that a particular debt was incurred as a result of duress, intimidation, threat, force, fraud, or exploitation. debt, or a portion thereof, is allegedly coerced debt.
(B) The documentation described by subparagraph (A) may shall be signed by a qualified third-party professional only if the documentation displays and display the letterhead, address, and phone telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or or, if the qualified third-party professional is self-employed, the documentation displays shall display the letterhead, address, and phone telephone number of the qualified third-party professional if they are self-employed. professional.
(b) Claim means a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
(c)Coerced debt means a debt for personal, family, or household use incurred as a result of duress, intimidation, threat, force, fraud, or exploitation of the debtors resources or personal information.
(d)
(c) (1) Creditor Claimant means a person or an entity that who has or purports to have a claim against a debtor or an alleged debtor or against the property of a debtor or an alleged debtor arising from a coerced debt, or that persons or entitys successor or assignee, including, but not limited to, a debt collector and a debt buyer.
(2) Notwithstanding paragraph (1), creditor claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress, intimidation, threat, force, fraud, or exploitation of the resources or personal identifying information of the debtor or alleged debtor for personal gain. duress of the debtor or alleged debtor.
(d) Coerced debt means a debt, or portion of a debt, for personal, family, or household use in the name of a debtor incurred as a result of duress, intimidation, threat, force, fraud, a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth.
(1) For purposes of this subdivision, victim of domestic violence has the same meaning as in Section 6211 of the Family Code.
(2) For the purposes of this subdivision, foster youth has the same meaning as in Section 42238.01 of the Education Code.
(3) For the purposes of this subdivision, dependent adult and elder have the same meanings as in Sections 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively.
(e) Debtor means a person who owes or is otherwise liable for a coerced debt.
(f) Personal information means the name, address, telephone number, drivers license number, social security number, email address, social media profile or screen name, place of employment, employee identification number, mothers maiden name, demand deposit account number, savings account number, checking account number, or credit card number of a debtor or alleged debtor. Person means a natural person.
(g) Qualified third-party professional means any of the following:
(1) A domestic violence counselor, as defined in Section 1037.1 of the Evidence Code.
(2) A sexual assault counselor, as defined in Section 1035.2 of the Evidence Code.
(3) A Court-Appointed Special Advocate, as defined in Section 101 of the Welfare and Institutions Code.
(4) A court-appointed attorney, as defined in subdivision (e) of Section 317 of the Welfare and Institutions Code.
(5) A board certified psychiatrist or psychologist.
(6) A licensed marriage and family therapist.
(7) A licensed professional clinical counselor.
(8) A licensed clinical social worker.
(9) A social worker or caseworker employed by an adult protective service agency for the purposes described in Chapter 13 (commencing with Section 15750) of Part 3 of Division 9 of the Welfare and Institutions Code.
(10) A social worker who has completed the child welfare training program described in Article 2 (commencing with Section 16205) of Chapter 3 of Part 4 of Division 9 of the Welfare and Institutions Code.
(h) Sworn written certification means a document in which the author, unless the author is a judge or governmental agency, declares under penalty of perjury as true any material fact, and which contains or is accompanied by the following, to the extent that an item listed below is relevant to the debtors allegation that the debt is coerced debt:
(1) A copy of the debtors drivers license or identification card, as issued by the state.
(2) Any other identification document that supports the statement of that the debt in question is coerced debt.
(3) An express statement that the debtor did not willingly authorize the use of the debtors name or personal information for incurring the coerced debt, and specific facts supporting the claim of coerced debt, if available, including an explanation showing that the debtor did not incur the allegedly coerced debt, and, if not all of the debt was coerced, a statement identifying the portion of the debt that was coerced.
(4) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.
(5) Documentation of the residence of the debtor at the time the allegedly coerced debt was incurred, which may include copies of bills and financial statements, such as utility bills, tax statements, or other statements from businesses sent to the debtor.
(6) A telephone number for contacting the person signing the certification concerning any additional information or questions, or direction that further communications to the debtor be in writing only, with the mailing address specified in the statement.
(7) The certification required by this subdivision shall be sufficient if it is in substantially the following form:
I certify that the representations made herein are true, correct, and contain no material omissions of fact.
_______(Date and Place)________ _______(Signature)________
1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):(1) One or more pieces of adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.
1798.97.2. (a) Upon receipt of both of the following, a claimant shall cease collection activities until completion of the review provided in subdivision (c):
(1) One or more pieces of adequate documentation.
(2) The debtors sworn written certification that some or all of the specific debt being collected is coerced debt.
(b) If a debtor notifies a claimant orally that some or all of the specific debt being collected is a coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtors notification must be in writing. If a debtor notifies a claimant in writing that some or all of the specific debt being collected is a coerced debt, but omits information required by subdivision (a}, and if the claimant does not cease collection activities, the claimant shall provide written notice to the debtor of the additional information that is required.
(c) Within 10 business days of receiving the complete statement and information described in subdivision (a), the claimant shall, if the claimant furnished adverse information about the debtor to a consumer credit reporting agency, notify the consumer credit reporting agency that the account is disputed, and initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The claimant shall send notice of its determination to the debtor no later than 10 business days after concluding the review. The claimant may recommence debt collection activities only upon making a good faith determination that the information does not establish that some or all of the specific debt being collected is a coerced debt. The claimants determination shall be made in a manner consistent with the provisions of subsection (1) of Section 1692 of Title 15 of the United States Code, as incorporated by Section 1788.17. The claimant shall notify the debtor in writing of that determination and the basis for that determination before proceeding with any further collection activities. The claimants determination shall be based on all of the information provided by the debtor and other information available to the claimant in its file.
(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the debt, shall arise if the claimant decides after the review described in subdivision (c) to cease or recommence the debt collection activities. The exercise or nonexercise of rights under this section is not a waiver of any other right or defense of the debtor or claimant.
(e) The statement and supporting documents that comply with subdivision (a) may also satisfy, to the extent those documents meet the requirements of, the notice requirement of Section 1798.97.3.
(f) A claimant that ceases debt collection activities under this section and does not recommence those debt collection activities shall do both of the following:
(1) If the claimant has furnished adverse information to a consumer credit reporting agency, notify the agency to delete that information no later than 10 business days after making its determination.
(2) If the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that debt collection activities have been terminated based upon the debtors assertion that some or all of the specific debt being collected is a coerced debt.
(g) A claimant that has possession of documents that the debtor is entitled to request from a creditor pursuant to Section 530.8 of the Penal Code may provide those documents to the debtor.
1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1). (c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt. (g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.(g)(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.
1798.97.2.1798.97.3. (a) (1) An alleged debtor may bring an action against an alleged creditor a claimant to establish that the alleged creditors claim claimants claim, or a portion thereof, arises from a coerced debt.
(2) In an action brought by an alleged creditor a claimant to recover a claim against the alleged debtor, the alleged debtor may file a cross-complaint against the alleged creditor to establish that the claim is claim, or a portion thereof, arose from a coerced debt. In the case of a cross-complaint, the notice set forth in subdivision (b) shall not be required.
(3) An alleged debtor shall plead the allegations of coerced debt with particularity and shall attach adequate documentation to the complaint or cross-complaint.
(b) (1) At least 30 days before commencing an action or filing a cross-complaint described by paragraph (1) of subdivision (a), the alleged debtor shall provide the alleged creditor claimant with written notice of the intent to file the action or cross-complaint, which shall include a description of the alleged coerced debt and the basis for the assertion that the debt is a coerced debt. The written notice shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date. The written notice shall be sent to the alleged creditors claimants principal place of business as identified by the California Secretary of State. If an address is unavailable through the Secretary of States internet website, the alleged debtor may use the correspondence address of the alleged creditor, or claimant, or, in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.
(2) The alleged debtor shall not commence an action or file a cross-complaint described in subdivision (a) if the alleged creditor claimant ceases all efforts to collect on the claim identified in the written notice provided pursuant to paragraph (1) before the expiration of the 30-day period.
(3) For purposes of this subdivision, the 30-day period shall begin to run when the alleged debtor sends claimant receives the notice provided under paragraph (1).
(c) If the alleged debtor establishes by a preponderance of the evidence in an action brought or cross-complaint filed pursuant to subdivision (a) that the claim claim, or a portion thereof, is a coerced debt, the debtor shall be entitled to the following relief:
(1) A declaratory judgment that the alleged debtor is not obligated to the creditor claimant on the claim. claim or portion thereof that is established as having arisen from coerced debt.
(2) An injunction prohibiting the creditor claimant from holding or attempting to hold the alleged debtor personally liable on the claim claim, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the creditor claimant from enforcing a judgment related to the claim or portion thereof that is established as having arisen from coerced debt against the alleged debtor.
(3) An order dismissing any cause of action brought by the creditor claimant to enforce or collect on the claim from the alleged debtor. debtor or, if only a portion of the claim is established as having arisen from coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the claim that did not arise from coerced debt.
(d) An alleged debtor who files false or unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against an alleged creditor a claimant shall be liable for the alleged creditors claimants attorneys fees and costs in defending the lawsuit.
(e)An alleged creditor may collect against any appropriate person or entity other than the alleged debtor.
(f)This title does not prevent an alleged creditor from enforcing a lien when the debt is secured by personal property.
(e) The claimant may move the court to make written findings regarding evidence related to the person who caused the coerced debt to be incurred.
(f) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing to collect by any lawful means that claim or portion thereof from the person or persons determined to have coerced the debt.
(g) The statute of limitations for a claimant to bring an action to collect a coerced debt from any person determined to have coerced the debt shall run from the date of the courts determination that the person caused the duress giving rise to the coerced debt at issue and shall be brought within five years of that determination.
(g)
(h) Information regarding a secured or unsecured consumer debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.
1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.
1798.97.3.1798.97.4. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged creditors claimants claim against an alleged debtor is for a coerced debt, and the joinder of further defendants based on the contention that their claims against the alleged debtor are coerced debts, regardless of whether a final judgment has been entered as to any defendant. The courts continuing jurisdiction shall terminate 10 years after filing of the original action or cross-complaint unless the court, before that date, finds good cause to extend jurisdiction over the matter.
1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.
1798.97.4.1798.97.5. An action brought or a cross-complaint filed pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the alleged debtor knew or, in the exercise of reasonable diligence should have known, of the existence of facts which would give rise to the bringing of the action against or the filing of the cross-complaint against, or joinder of, the defendant.
1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.
1798.97.5.1798.97.6. A creditor claimant may use all rights and remedies against a person who caused a coerced debt to be incurred or against a person who used or possessed money, goods, services, or property obtained through a coerced debt.
1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.
1798.97.6.1798.97.7. This title does not apply to debts secured by real property. debts.
SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
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