North Carolina SB 650: Coerced Debt Relief Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 650

Short Title: Coerced Debt Relief Act. (Public)
Sponsors: Senator Mohammed (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S650-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE CIVIL RELIEF FROM COERCED DEBT. 2
The General Assembly of North Carolina enacts: 3
SECTION 1.(a) The General Assembly finds that survivors of domestic violence 4
and the children of domestic violence survivors undergo multiple forms of abuses, including 5
monetary abuse, and that survivors of domestic violence need multiple pathways to remedy 6
coerced debt and to repair credit reports. Therefore, it is the public policy of this State to provide 7
remedies for economic abuse against domestic violence survivors. 8
SECTION 1.(b) The General Statutes are amended by adding a new Chapter to read: 9
"Chapter 1H. 10
"Coerced Debt Relief Act. 11
"§ 1H-1. Short title. 12
This Chapter shall be known and may be cited as the North Carolina Coerced Debt Relief 13
Act. 14
"§ 1H-2. Definitions. 15
The following definitions apply to this Chapter: 16
(1) Abuse. – As defined in G.S. 50C-1(1). 17
(2) Adequate documentation. – Documentation that identifies a particular debt, or 18
portion thereof, as coerced debt, describes the circumstances under which the 19
coerced debt was incurred, and takes the form of any of the following: 20
a. A police report. 21
b. A Federal Trade Commission identity theft report identifying a 22
particular debt, or portion thereof, as coerced, but not as identity theft. 23
c. A court order issued under Chapter 50 or Chapter 50B of the General 24
Statutes relating to domestic violence, Chapter 7B of the General 25
Statutes relating to an abused, neglected, or dependent juvenile, or 26
G.S. 108A-106 relating to disabled adults. 27
d. A sworn written certification from a qualified third-party professional 28
based on information they received while acting in a professional 29
capacity. This documentation shall be signed by a qualified third-party 30
professional and display the letterhead, address, and telephone number 31
of the office, institution, center, or organization, as appropriate, that 32
engages or employs, whether financially compensated or not, the 33
qualified third-party professional, or, if the qualified third-party 34
professional is self-employed, the documentation shall display the 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 650-First Edition
letterhead, address, and telephone number of the qualified third-party 1
professional. 2
(3) Claim. – A right to payment, whether or not that right is reduced to judgment, 3
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, 4
undisputed, legal, or equitable. 5
(4) Claimant. – A person or an entity who has or purports to have a claim against 6
a debtor arising from coerced debt, or that person's or entity's successor or 7
assignee. This definition includes, but is not limited to, a debt collector or a 8
debt buyer. The term does not include a person who caused the claim 9
described in subdivision (3) of this section to arise through duress, 10
intimidation, threat of force, force, fraud, or undue influence perpetrated 11
against the debtor. 12
(5) Coerced debt. – A particular debt, or portion thereof, for personal, family, or 13
household use in the name of a debtor who is a victim of domestic violence as 14
defined in G.S. 50B-1, or a victim of domestic abuse as defined in 15
G.S. 14-32.3(a), or a current or former child in foster care as defined in 16
G.S. 131D-10.2, incurred as a result of duress, intimidation, threat of force, 17
force, or undue influence. 18
(6) Debtor. – A person who owes or is otherwise liable for coerced debt. 19
(7) Fraud. – An initial fraudulent act that is perpetrated against the debtor. 20
(8) Immediate family member. – As defined in G.S. 53-244.030(13). 21
(9) Person. – A natural person. 22
(10) Qualified third-party professional. – Any of the following who also has a 23
degree, certificate, or license from an accredited program for counseling 24
domestic violence victims: 25
a. Any agent of a domestic violence or sexual assault program, as defined 26
in G.S. 8-53.12. 27
b. A guardian ad litem or attorney appointed in accordance with 28
G.S. 1A-1, Rule 17 of the Rules of Civil Procedure, or G.S. 7B-601. 29
c. A board-certified psychiatrist or psychologist. 30
d. A licensed marriage and family therapist. 31
e. A licensed professional clinical counselor. 32
f. A licensed clinical social worker. 33
g. A social worker or caseworker employed by a county department of 34
social services for the purposes described in G.S. 108A-100 or 35
G.S. 7B-100. 36
h. A non-licensed or credentialed domestic violence professional who 37
otherwise meets the criteria of G.S. 8-53.12(a)(1). 38
(11) Sworn written certification. – A document in which the author declares under 39
penalty of perjury as true any material f