Civil Actions - Coerced Debt - Debtor Protections

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1198*

HOUSE BILL 1198
D3, D4 6lr1256

By: Delegates Lopez, Charkoudian, Embry, and Shetty
Introduced and read first time: February 11, 2026
Assigned to: Judiciary

A BILL ENTITLED

AN ACT concerning 1

Civil Actions – Coerced Debt – Debtor Protections 2

FOR the purpose of providing that a debtor may provide certain notice to a creditor and 3
request that the creditor cease debt collection activity relating to a coerced debt; 4
authorizing a debtor, after providing a creditor with certain notice, to bring an action 5
against the creditor seeking certain relief ; authorizing a debtor to bring a certain 6
action against a certain individual; establishing a certain affirmative defense; and 7
generally relating to coerced debt. 8

BY adding to 9
Article – Courts and Judicial Proceedings 10
Section 3–2701 through 3 –2707 to be under the new subtitle “Subtitle 27. Coerced 11
Debt – Debtor Protections” 12
Annotated Code of Maryland 13
(2020 Replacement Volume and 2025 Supplement) 14

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16

Article – Courts and Judicial Proceedings 17

SUBTITLE 27. COERCED DEBT – DEBTOR PROTECTIONS. 18

3–2701. 19

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 20
INDICATED. 21

(B) (1) “ADEQUATE DOCUMENTATION” MEANS A WRITING THAT: 22

2 HOUSE BILL 1198

(I) IDENTIFIES A DEBT AS A COERCED DEBT; AND 1

(II) DESCRIBES THE CIRCUMS TANCES UNDER WHICH THE 2
COERCED DEBT WAS INCURRED. 3

(2) “ADEQUATE DOCUMENTATION” INCLUDES: 4

(I) A POLICE REPORT; 5

(II) A FEDERAL TRADE COMMISSION IDENTITY THEFT REPORT; 6

(III) AN ORDER FROM A COURT OF COMP ETENT JURISDICTION 7
FINDING THE DEBT TO BE A COERCED DEBT; AND 8

(IV) A SWORN, WRITTEN CERTIFICATION FROM A QUALIFIED 9
THIRD PARTY TO WHICH THE DEBTOR REPORTED THE CIRCUMSTANCES GIVING RISE 10
TO THE COERCED DEBT. 11

(C) (1) “COERCED DEBT ” MEANS ALL OR A PART OF A D EBT IN THE 12
DEBTOR’S NAME INCURRED AS A RESULT OF FRAUD, DURESS, INTIMIDATION, 13
THREAT, FORCE, COERCION, MANIPULATION, UNDUE INFLUENCE , 14
MISINFORMATION, OR THE NONCONSENSUAL USE OF THE DEBTOR ’S PERSONAL 15
IDENTIFYING INFORMATION, THAT OCCURS WITHIN THE CONTEXT OF: 16

(I) ABUSE, AS DEFINED IN § 4–501 OF THE FAMILY LAW 17
ARTICLE; 18

(II) EXPLOITATION OF CHILDREN IN AN OUT –OF–HOME 19
PLACEMENT, AS DEFINED IN § 5–501 OF THE FAMILY LAW ARTICLE; 20

(III) FINANCIAL EXPLOITATION, AS DEFINED IN § 13–601 OF THE 21
ESTATES AND TRUSTS ARTICLE; 22

(IV) HARASSMENT UNDER § 3–803 OF THE CRIMINAL LAW 23
ARTICLE; 24

(V) HUMAN TRAFFICKING UNDER TITLE 3, SUBTITLE 11 OF THE 25
CRIMINAL LAW ARTICLE; OR 26

(VI) LABOR TRAFFICKING UNDER § 3–1202 OF THE CRIMINAL 27
LAW ARTICLE. 28

HOUSE BILL 1198 3

(2) “COERCED DEBT” DOES NOT INCLUDE A DEBT SECURED BY REAL 1
PROPERTY. 2

(D) “CONSUMER REPORTING AG ENCY” HAS THE MEANING STAT ED IN § 3
14–1201 OF THE COMMERCIAL LAW ARTICLE. 4

(E) “CREDITOR” MEANS A PERSON , OR THE PERSON ’S SUCCESSOR , 5
ASSIGNEE, OR AGENT, CLAIMING TO OWN OR HAVE THE RIGHT TO COLLECT A DEBT 6
OWED BY THE DEBTOR. 7

(F) “DEBTOR” MEANS AN INDIVIDUAL WHO OWES A DEBT. 8

(G) “QUALIFIED THIRD PARTY” MEANS: 9

(1) A LAW ENFORCEMENT OFFICER; 10

(2) A LICENSED HEALTH CARE PROVIDER; 11

(3) A LICENSED MENTAL HEALTH CARE PROVIDER; 12

(4) A LICENSED SOCIAL WORKER; 13

(5) A LICENSED CLINICAL MARRIAGE AND FAMILY THERAPIST; OR 14

(6) AN EMPLOYEE OF A DOME STIC VIOLENCE PROGRA M THAT 15
RECEIVES FUNDING FROM THE GOVERNOR’S OFFICE OF CRIME PREVENTION AND 16
POLICY. 17

3–2702. 18

(A) (1) BEFORE FILING A CIVIL ACTIO N UNDER § 3–2703 OF THIS 19
SUBTITLE, A DEBTOR SHALL NOTIFY A CREDITOR TH AT A DEBT ON WHICH T HE 20
CREDITOR DEMANDS PAY MENT IS COERCED DEBT AND REQUEST THAT THE 21
CREDITOR CEASE ALL DEBT COLLECTION ACTIVITY ON THE COERCED DEBT. 22

(2) NOTICE PROVIDED UNDER THIS SUBSECTION SHALL: 23

(I) BE IN WRITING; 24

(II) INCLUDE ADEQUATE DOCUMENTATION; AND 25

(III) BE SUBMITTED: 26

4 HOUSE BILL 1198

1. BY MAIL; 1

2. BY E–MAIL; 2

3. BY FAX; OR 3

4. ONLINE OR THROUGH OTHER ELECTRONIC MEANS. 4

(3) A CREDITOR SHALL MAKE INFORMATION ON HOW A DEBTOR CAN 5
SUBMIT A NOTICE UNDE R THIS SECTION PUBLI CLY AVAILABLE ONLINE AND ON 6
REQUEST VIA ANY PUBLICLY AVAILABLE METHOD OF COMMUNICATION. 7

(4) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPHS (II) AND (III) OF 8
THIS PARAGRAPH, NOTICE SUBMITTED BY A DEBTOR IS CONSIDERED RECEIVED THE 9
SAME DAY THE DEBTOR SUBMITS THE NOTICE. 10

(II) NOTICE SUBMITTED BY M AIL IS CONSIDERED RE CEIVED 3 11
DAYS AFTER THE NOTICE WAS POSTMARKED. 12

(III) NOTICE SUBMITTED WITH OUT ADEQUATE 13
DOCUMENTATION IS CON SIDERED RECEIVED THE DAY THAT THE ADE QUATE 14
DOCUMENTATION IS PROVIDED TO THE CREDITOR. 15

(B) (1) ON RECEIPT OF NOTICE PR OVIDED UNDER SUBSECT ION (A) OF 16
THIS SECTION, A CREDITOR SHALL: 17

(I) PROVIDE THE DEBTOR WI TH WRITTEN CONFIRMAT ION 18
THAT THE CREDITOR HA S RECEIVED THE NOTIC E, INCLUDING IDENTIFICATION OF 19
THE DATE THE NOTICE WAS CONSIDERED RECEIVED UNDER SUBSECTION (A)(4) OF 20
THIS SECTION; 21

(II) INFORM THE DEBTOR OF ANY MISSING DOCUMENT ATION 22
REQUIRED TO REVIEW THE NOTICE, IF APPLICABLE; AND 23

(III) INFORM A CONSUMER REPORTING AGENCY THAT THE DEBT 24
IS DISPUTED. 25

(2) WITHIN 30 DAYS AFTER RECEIVING NOTICE UNDER SUBSECTION 26
(A) OF THIS SECTION , A CREDITOR SHALL PROVIDE WRITTE N NOTICE TO THE 27
DEBTOR OF THE CREDITOR’S DECISION TO CONTINUE OR CEASE DEBT COLLECTION 28
ACTIVITY RELATING TO THE COERCED DEBT. 29

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(3) A NOTICE UNDER PARAGRA PH (2) OF THIS SUBSECTION O F A 1
CREDITOR’S DECISION TO RESUME DEBT COLLECTION SHALL STATE THE DATE ON 2
WHICH THE CREDITOR WILL RESUME DEBT COLLECTION ACTIVITY, WHICH MAY BE 3
NOT EARLIER THAN 40 DAYS AFTER THE CREDI TOR RECEIVED NOTICE UNDER 4
SUBSECTION (A) OF THIS SECTION. 5

(4) FOLLOWING NOTICE UNDER PARAGRAPH (2) OF THIS 6
SUBSECTION OF A DECISION TO CEASE DEBT COLLECTION ACTIVITY, A CREDITOR: 7

(I) SHALL: 8

1. CEASE ALL DEBT COLLECTION ACTIVITY, INCLUDING 9
WAGE GARNISHMENT; 10

2. REPORT TO A CONSUMER REPORTING AGENCY THE 11
DELETION OF THE COERCED DEBT; AND 12

3. MOVE TO DISMISS ANY A CTION IN A COURT TO 13
ENFORCE COLLECTION ACTIVITY ON THE COERCED DEBT; AND 14

(II) MAY RESUME DEBT COLLECTION ACTIVIT Y ON THE 15
COERCED DEBT ONLY AFTER PROVIDING WRITTEN NOTICE TO THE DEBTOR AT 16
LEAST 10 DAYS BEFORE RESUMING DEBT COLLECTION ACTIVITY. 17

(C) A CREDITOR MAY SELL OR ASSIGN TO ANOTHER PARTY A DEBT THAT A 18
DEBTOR HAS ASSERTED IS COERCED DEBT IF THE CREDITOR SELLING OR ASSIGNING 19
THE DEBT NOTIFIES THE BUYER OR ASSIGNE E THAT THE DEBTOR HAS ASSERTED 20
THE DEBT IS COERCED DEBT. 21

(D) A CREDITOR CEASING DEBT COLLECTION ACTIVITY ON A DEBT THAT A 22
DEBTOR HAS ASSERTED IS A COERCED DEBT DOES NOT CREATE A PR ESUMPTION 23
REGARDING THE VALIDITY OR INVALIDITY OF THE DEBT FOR WHICH THE DEBTOR 24
MAY BE LIABLE. 25

(E) A DEBTOR MAY NOT FILE AN ACTION UNDER § 3–2703 OF THIS SUBTITLE 26
EARLIER THAN 30 DAYS AFTER PROVIDING A CREDITOR WITH NOTICE IN 27
ACCORDANCE WITH SUBSECTION (A) OF THIS SECTION. 28

3–2703. 29

(A) A DEBTOR ALLEGING A DEBT IS COERCED DEBT MAY SEEK EQUITABLE 30
RELIEF IN A COURT OF COMPETENT JURISDICTION, INCLUDING: 31

6 HOUSE BILL 1198

(1) A DECLARATORY JUDGMENT THAT A DEBT IS A COERCED DEBT; 1

(2) AN INJUNCTION PROHIBITING A CREDITOR FROM: 2

(I) HOLDING THE DEBTOR LIABLE FOR THE COERCED DEBT; 3

(II) ENFORCING A JUDGMENT RELATED TO THE COERC ED 4
DEBT; OR 5

(III) REPORTING THE COERCED DEBT TO A CONSUMER 6
REPORTING AGENCY; 7

(3) AN ORDER DISMISSING WITH PREJUDICE ANY CAUSE OF ACTION 8
BROUGHT BY A CREDITOR TO ENFORCE OR COLLECT THE COERCED DEBT FROM THE 9
DEBTOR; AND 10

(4) AN ORDER REQUIRING A CREDITOR TO REPORT TO A CONSUMER 11
REPORTING AGENCY THE DELETION OF THE COERCED DEBT. 12

(B) A DEBTOR MAY FILE A PE TITION UNDER THIS SE CTION NOT EARLIER 13
THAN 30 DAYS AFTER A CREDITOR HAS RECEIVED NOTICE UNDER § 3–2702 OF THIS 14
SUBTITLE. 15

(C) (1) A PETITION FOR EQUITABLE RELIEF FILED UNDER THIS SECTION 16
SHALL CONTAIN: 17

(I) EVIDENCE THAT THE DEBTOR PROV IDED NOTICE TO A 18
CREDITOR REQUIRED UNDER § 3–2702 OF THIS SUBTITLE; AND 19

(II) INFORMATION IDENTIFYING: 20

1. THE ACCOUNT ASSOCIATE D WITH THE COERCED 21
DEBT; 22

2. THE INDIVIDUAL IN WHO SE NAME THE COERCED 23
DEBT WAS INCURRED; AND 24

3. THE INDIVIDUAL WHO CA USED THE DEBTOR TO 25
INCUR THE ALLEGED COERCED DEBT INCLUDING, IF KNOW N, THE INDIVIDUAL ’S 26
CONTACT INFORMATION. 27

(D) (1) A PETITIONER IS NOT REQUIRED TO P ROVIDE INFORMATION 28
UNDER SUBSECTION (C)(1)(II)3 OF THIS SECTION IF THE PETITIONER SIGNS A 29
HOUSE BILL 1198 7

SWORN STATEMENT ATTESTING THAT DISCLOSURE IS LIKELY TO RESULT IN ABUSE 1
OF OR HARM TO THE PETITIONER, OR HARM TO THE PETITIONER’S FAMILY OR PET. 2

(2) THE COURT SHALL TAKE APPROPRIATE STE PS NECESSARY TO 3
PREVENT ABUSE OF OR HARM TO THE DEBTOR, OR HARM TO THE DEBTOR’S FAMILY 4
OR THE DEBTOR’S PET. 5

(3) APPROPRIATE STEPS UND ER THIS SUBSECTION M AY INCLUDE 6
SHIELDING OF CASE FILES, REDACTING PERSONALLY IDENTIFIABLE INFORMATION, 7
OR REQUIRING DEPOSIT IONS AND EVIDENTIARY HEARINGS TO BE CONDUCTED 8
REMOTELY. 9

(E) (1) IN AN ACTION UNDER THIS SECTION, A DEBTOR HAS THE BURDEN 10
OF PROOF TO SHOW THA T NOTICE REQUIRED UN DER § 3–2702 OF THIS SUBTITLE 11
WAS PROVIDED TO THE CREDITOR. 12

(2) ONCE A DEBTOR MEETS THE BURDEN OF PROOF UNDER 13
PARAGRAPH (1) OF THIS SUBSECTION, A CREDITOR HAS THE BURDEN OF PROOF TO 14
SHOW THAT THE DEBTO R DID NOT ALLEGE IN GOOD FAITH THAT THE DEBT WAS 15
COERCED. 16

3–2704. 17

THIS SUBTITLE MAY NOT BE CONSTRUED TO PROHIBIT A CREDITOR FROM 18
PURSUING AN ACTION AGAINST AN INDIVIDUAL ALLEGED TO HAVE CAUSED A 19
DEBTOR TO INCUR COERCED DEBT. 20

3–2705. 21

IF A DEBTOR RECEIVES A DECLARATO RY JUDGMENT THAT A D EBT IS A 22
COERCED DEBT UNDER THIS SUBTITLE, A DEBTOR MAY SEEK RELIEF IN A COURT OF 23
COMPETENT JURISDICTION AGAINST AN INDIVIDUAL ALLEGED TO HAVE CAUSED A 24
COERCED DEBT, INCLUDING: 25

(1) DAMAGES IN THE AMOUNT OF PAYMENT S MADE OR COSTS 26
INCURRED RELATED TO THE COERCED DEBT; 27

(2) ATTORNEY’S FEES; AND 28

(3) COURT COSTS. 29

3–2706. 30

8 HOUSE BILL 1198

IN AN ACTION AGAINST A DEBTOR TO SATISFY A DEBT, IT IS AN AFFIRMATIVE 1
DEFENSE THAT THE DEBT IS A COERCED DEBT. 2

3–2707. 3

AN AGREEMENT BETWEEN A DEBTOR AND ANY OTH ER PERSON TO WAIVE O R 4
MODIFY A RIGHT CONFE RRED OR CAUSE OF ACT ION CREATED UNDER TH IS 5
SUBTITLE IS VOID AS CONTRARY TO PUBLIC POLICY. 6

SECTION 2. AND BE IT FURTHER ENACTED, That, if any provision of this Act or 7
the application of any provision of this Act to any person or circumstance is held invalid for 8
any reason in a court of competent jurisdiction, the invalidity does not affect other 9
provisions or any other application of this Act that can be given effect without the invalid 10
provision or application, and for this purpose the provisions of this Act are declared 11
severable. 12

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 13
October 1, 2026. 14