Amended IN Assembly June 23, 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. 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.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 a debtor to bring an action or a claim against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt, as specified. If an alleged a debtor establishes that aclaim, particular debt, or a portion thereof, arises from a is coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof thereof, that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt against the alleged debtor. The bill would require declare that its provisions are severable. This 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: YES Local Program: YES 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.(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. 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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.(2)(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.(3)(C) 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 thereof that was coerced.(4)(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5)(E) 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)(F) 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)(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify declare under penalty of perjury 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 Adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.(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 a particular debt, or portion thereof, 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.1798.97.3. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1). (c)(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.(d)An alleged(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.(e)(d) 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)(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.(g)(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.(h)(g) Information regarding a consumer particular debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.4. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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.1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.1798.97.6. A 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. This title does not apply to secured debts.1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.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 23, 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. 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.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 a debtor to bring an action or a claim against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt, as specified. If an alleged a debtor establishes that aclaim, particular debt, or a portion thereof, arises from a is coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof thereof, that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt against the alleged debtor. The bill would require declare that its provisions are severable. This 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: YES Local Program: YES
Amended IN Assembly June 23, 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
Amended IN Assembly June 23, 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.
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 a debtor to bring an action or a claim against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt, as specified. If an alleged a debtor establishes that aclaim, particular debt, or a portion thereof, arises from a is coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof thereof, that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt against the alleged debtor. The bill would require declare that its provisions are severable. This 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 a debtor to bring an action or a claim against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt, as specified. If an alleged a debtor establishes that aclaim, particular debt, or a portion thereof, arises from a is coerced debt, the bill would entitle that alleged debtor to specified relief, including an injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof thereof, that is established as having arisen from coerced debt, or from enforcing a judgment related to the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt against the alleged debtor. The bill would require declare that its provisions are severable.
This 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.(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. 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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.(2)(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.(3)(C) 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 thereof that was coerced.(4)(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5)(E) 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)(F) 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)(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify declare under penalty of perjury 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 Adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.(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 a particular debt, or portion thereof, 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.1798.97.3. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1). (c)(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.(d)An alleged(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.(e)(d) 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)(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.(g)(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.(h)(g) Information regarding a consumer particular debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.4. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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.1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.1798.97.6. A 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. This title does not apply to secured debts.1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.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.(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.
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.(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.
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.
(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.
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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.(2)(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.(3)(C) 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 thereof that was coerced.(4)(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5)(E) 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)(F) 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)(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify declare under penalty of perjury 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 Adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.(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 a particular debt, or portion thereof, 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.1798.97.3. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1). (c)(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.(d)An alleged(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.(e)(d) 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)(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.(g)(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.(h)(g) Information regarding a consumer particular debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.4. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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.1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.1798.97.6. A 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. This title does not apply to secured debts.1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.(2)(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.(3)(C) 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 thereof that was coerced.(4)(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5)(E) 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)(F) 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)(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify declare under penalty of perjury 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 Adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.(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 a particular debt, or portion thereof, 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.1798.97.3. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1). (c)(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.(d)An alleged(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.(e)(d) 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)(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.(g)(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.(h)(g) Information regarding a consumer particular debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.4. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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.1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.1798.97.6. A 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. This title does not apply to secured debts.1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.(2)(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.(3)(C) 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 thereof that was coerced.(4)(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5)(E) 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)(F) 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)(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify declare under penalty of perjury 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 Adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.(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 a particular debt, or portion thereof, 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.1798.97.3. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1). (c)(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.(d)An alleged(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.(e)(d) 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)(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.(g)(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.(h)(g) Information regarding a consumer particular debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.1798.97.4. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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.1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.1798.97.6. A 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. This title does not apply to secured debts.1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.(e) Debtor means a person who owes or is otherwise liable for a coerced debt.(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.(2)(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.(3)(C) 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 thereof that was coerced.(4)(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.(5)(E) 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)(F) 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)(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:I certify declare under penalty of perjury 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 coerced debt. The survivor debtor 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 identifying a particular debt, or portion thereof, is allegedly as coerced debt.
(2) A Federal Trade Commission identity theft report finding that identifying a particular debt, or portion thereof, is allegedly as 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 or ward of the juvenile court, or Section 15657.03 of the Welfare and Institutions Code relating to elder or dependent abuse identifying a particular debt, or portion thereof, as allegedly being coerced debt.
(4) (A) A sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity indicating that identifying a particular debt, or a portion thereof, is allegedly as coerced debt.
(B) The documentation described by subparagraph (A) shall be signed by a qualified third-party professional and display the letterhead, address, and 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, if the qualified third-party professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party 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) (1) Claimant means a person or an entity who has or purports to have a claim against a debtor or 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, assignee. Claimant includes, but is not limited to, a debt collector and or a debt buyer.
(2) Notwithstanding paragraph (1), claimant shall not include a person who caused the claim described in paragraph (1) to arise through duress of the debtor or alleged duress, intimidation, threat, force, or fraud perpetrated against the debtor.
(d) Coerced debt means a particular debt, or portion of a debt, thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence, a victim of elder or dependent adult abuse, or a person who is a foster youth, 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. or fraud.
(1) For purposes of this subdivision, victim of domestic 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 has the same meanings meaning as in Sections Section 15610.23 and 15610.27 of the Welfare and Institutions Code, respectively. Code.
(4) For the purposes of this subdivision, elder has the same meaning as in Section 15610.27 of the Welfare and Institutions Code.
(e) Debtor means a person who owes or is otherwise liable for a coerced debt.
(f) 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 (1) 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) A copy of the debtors drivers license or identification card, as issued by the state.
(2)
(B) Any other identification document that supports the statement of that the debt in question particular debt, or portion thereof, is coerced debt.
(3)
(C) 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 thereof that was coerced.
(4)
(D) Any available correspondence disputing the allegedly coerced debt after transaction information has been provided to the debtor.
(5)
(E) 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)
(F) 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)
(2) The certification required by this subdivision shall be sufficient if it is in substantially the following form:
I certify declare under penalty of perjury 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 Adequate documentation.(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.(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 a particular debt, or portion thereof, 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 Adequate documentation.
(2) The debtors sworn written certification that some or all of the specific debt a particular debt, or portion thereof, being collected is coerced debt.
(b) If a debtor notifies a claimant orally that some or all of the specific debt a particular debt, or portion thereof, 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 a particular debt, or portion thereof, being collected is a coerced debt, but omits information required by subdivision (a}, (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 (1) 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 disputed.
(2) The claimant shall initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. The
(3) Within 10 business days of completing the review, the claimant shall send notice of its determination to notify 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. in writing of the claimants determination and the good faith basis for that determination.
(4) The claimant shall not recommence collection activities until the debtor has been notified in writing of the good faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.
(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for the particular debt, or portion thereof, 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. (1) At least 30 days before filing an action pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3, a debtor must submit the statement and supporting documents that comply with subdivision (a) in writing to the claimant.
(2) The written notice described in paragraph (1) shall be sent by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date.
(3) The written notice described in paragraph (1) shall be sent to the claimants principal place of business as identified by the Secretary of State. If an address is unavailable through the Secretary of States website, the debtor may use the correspondence address of the claimant, or in the case of a debt collector, the address on file with the Department of Financial Protection and Innovation for licensing purposes.
(4) The debtor shall not commence an action described in subdivision (a) of Section 1798.97.3 if the claimant ceases all efforts to collect on the particular debt identified in the written notice pursuant to paragraph (2) of subdivision (f) before the expiration of the 30-day period.
(5) For purposes of this subdivision, the 30-day period shall begin to run when the claimant receives the written notice.
(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 a particular debt, or portion thereof, 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.
1798.97.3. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1). (c)(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.(d)An alleged(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.(e)(d) 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)(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.(g)(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.(h)(g) Information regarding a consumer particular 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. (a) (1) An alleged A debtor may bring an action against a claimant to establish that the claimants claim, a particular debt, or a portion thereof, arises from a is coerced debt.
(2) In an action brought by a claimant to recover a claim particular debt against the alleged debtor, the alleged debtor may file a cross-complaint to establish that the claim, particular debt, or a portion thereof, arose from a is coerced debt. In the case of a cross-complaint, the The notice set forth in subdivision (b) described in subdivision (e) of Section 1798.97.2 shall not be required. required as a prerequisite to filing a cross-complaint.
(3) An alleged A 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 described by paragraph (1) of subdivision (a), the alleged debtor shall provide the 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 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 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 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 claimant receives the notice provided under paragraph (1).
(c)
(b) If the alleged debtor establishes by a preponderance of the evidence in an action brought by the debtor or in which the debtor filed a cross-complaint filed pursuant to subdivision (a) that the claim, particular debt, 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 claimant on the claim particular debt, or portion thereof thereof, that is established as having arisen from coerced debt.
(2) An injunction prohibiting the claimant from holding or attempting to hold the alleged debtor personally liable on the claim, particular debt, or the portion thereof, that is established as having arisen from coerced debt, and prohibiting the claimant from enforcing a judgment related to the claim particular debt, or portion thereof 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 claimant to enforce or collect on the claim particular debt from the alleged debtor or, if only a portion of the claim debt 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 particular debt that did not arise from is not coerced debt.
(d)An alleged
(c) A debtor who files false or unmeritorious motions, pleadings, or other papers or engages in other tactics that are frivolous or solely intended to cause unnecessary delay against a claimant shall be liable for the claimants attorneys fees and costs in defending the lawsuit.
(e)
(d) 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)
(e) Where some or all of a claim is established as having arisen from coerced debt, a claimant shall have standing standing, and may use all rights and remedies, to collect by any lawful means that claim claim, or portion thereof thereof, from the person or persons determined to have coerced the debt. debt, or against a person who used or possessed money, goods, services, or property obtained through coerced debt.
(g)
(f) 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 duress, intimidation, threat, force, or fraud giving rise to the coerced debt at issue and shall be brought within five years of that determination.
(h)
(g) Information regarding a consumer particular debt documented to be a coerced debt shall be deemed incomplete or inaccurate for purposes of subdivision (a) of Section 1785.25.
1798.97.4. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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. A court shall have continuing jurisdiction over an action filed pursuant to this title in order to provide for the joinder of related causes of action based on the contention that an alleged a claimants claim against an alleged a 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.
1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.
1798.97.5. An action brought or cross-complaint filed pursuant to this title or any joinder of a defendant may be brought within four years of the date the alleged debtor knew or, 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 filing of cross-complaint against, or joinder of, the defendant. This limitations period shall not apply to the filing of a cross-complaint pursuant to paragraph (2) of subdivision (a) of Section 1798.97.3.
1798.97.6. A 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. This title does not apply to secured debts.
1798.97.6. A 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. This title does not apply to secured debts.
1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
1798.97.7. This title does not apply to secured debts. If any provision of this title or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this title that can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.
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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