CIVIL RELIEF FROM COERCED DEBT ACT

HB0313

HOUSE BILL 313

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Reena Szczepanski

AN ACT

RELATING TO DEBT COLLECTION; ENACTING THE CIVIL RELIEF FROM
COERCED DEBT ACT; PRESCRIBING DEBTOR DUTIES; REQUIRING DEBTORS
TO SUBMIT A STATEMENT OF COERCED DEBT; PRESCRIBING CREDITOR
DUTIES; ESTABLISHING A RIGHT OF ACTION FOR CLAIMS ARISING OUT
OF COERCED DEBTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
[
NEW MATERIAL
] SHORT TITLE.--This act may be
cited as the "Civil Relief from Coerced Debt Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Civil Relief from Coerced Debt Act:

A. "coerced debt" means a debt or portion of debt
that was incurred because of identity theft, fraud, duress,
intimidation, threat, force, coercion, manipulation, undue
influence, misinformation or the non-consensual use of the
debtor's personal identifying information within the context of
human trafficking, domestic abuse, domestic violence, sexual
assault, stalking or abuse of an adult as defined in the Adult
Protective Services Act. "Coerced debt" does not include debt
secured by real property;

B. "creditor" means:

(1) an individual or entity to whom a debt is
owed, due or asserted to be due or owed;

(2) any assignee for value;

(3) a debt collector; or

(4) a debt buyer;

C. "debt" means an obligation or alleged obligation
to pay money;

D. "debtor" means an individual who owes or who is
alleged to owe a debt;

E. "perpetrator of coerced debt" means a person who
causes or is alleged to have caused coerced debt to be incurred
by another; and

F. "qualified third party" means:

(1) a law enforcement officer;

(2) an attorney, a physician, a physician
assistant, a psychiatrist, a psychologist, a social worker, a
nurse, a therapist or a clinical professional counselor, all of
whom are licensed to practice in any state;

(3) a person who advises or provides services
to persons regarding sexual assault, domestic abuse, domestic
violence, family violence, human trafficking or abuse of
children, the elderly or dependent adults; or

(4) a member of the clergy of a church,
religious society or denomination.

SECTION 3.
[
NEW MATERIAL
] COERCED DEBT--DEBTOR DUTIES--STATEMENT OF COERCED DEBT.--

A. A person shall not cause another to incur
coerced debt. A person who is found to be a perpetrator of
coerced debt by a court of competent jurisdiction shall be
civilly liable to the creditor. The perpetrator of coerced
debt may also be civilly liable to a debtor to the extent that
the debtor made payments or incurred costs related to the
coerced debt.

B. A debtor is not liable for coerced debt and may
assert that the debtor has incurred a coerced debt by providing
to a creditor a written statement of coerced debt and adequate
documentation. The statement of coerced debt shall:

(1) contain enough information about the debt
or portion of the debt to permit a creditor to identify any
accounts associated with the debt;

(2) inform the creditor that the debtor did
not willingly authorize the use of the debtor's name, account
or personal information for incurring the debt or portion of
the debt or to claim that a debt or portion of the debt is a
coerced debt;

(3) provide facts describing how the debt was
incurred;

(4) include the debtor's contact information,
such as a phone number, an email address, a physical address or
a confidential substitute address pursuant to the Confidential
Substitute Address Act for the debtor or a qualified third
party the debtor designates to receive information about the
coerced debt;

(5) be supported by at least one of the
following:

(a) a police report that identifies the
coerced debt or a portion of the debt and describes the
circumstances under which the coerced debt was incurred;

(b) an order from a court setting forth
findings of coerced debt;

(c) written verification on letterhead
or on a form published by the department of justice from a
qualified third party to whom the debtor reported the coerced
debt that identifies the name, organization, address and
telephone number of the qualified third party, identifies the
coerced debt or a portion of the debt and attests that the
debtor sought the qualified third party's assistance related to
the coerced debt, abuse or exploitation pursuant to the Family
Violence Protection Act or because the person is a victim of
human trafficking. Provision of a written verification under
this section does not waive any privilege or confidentiality
between the third party and the debtor pursuant to federal,
state or local law; or

(d) any other document that individually
or in combination with other documents demonstrates that a
person was subject to coerced debt, including text messages,
email messages, phone records, voicemail messages, social media
posts, letters, credit card applications or orders of
protection; and

(6) be verified by signing the following
attestation: "By signing below, I am certifying that the
information provided on this form is true and correct to the
best of my knowledge and recollection and that one or more
members of my household is or has been a victim of human
trafficking, domestic abuse, domestic violence, sexual assault,
stalking or abuse of an adult as defined in the Adult
Protective Services Act".

C. A debtor who seeks relief provided pursuant to
the Civil Relief from Coerced Debt Act shall submit to the
creditor a statement of coerced debt that confirms the date on
which the statement was delivered and in a form prescribed by
the financial institutions division of the regulation and
licensing department.

SECTION 4.
[
NEW MATERIAL
] CREDITOR DUTIES PURSUANT TO
COERCED DEBT AND DEBTOR'S STATEMENT OF COERCED DEBT.--

A. A creditor shall provide to a debtor on any
collection letter or written communication to the debtor, and
on the creditor's website, the information necessary to submit
a statement of coerced debt to that creditor by first class
mail, certified mail or overnight delivery, by email or by
completing an online form on the creditor's website.

B. Within ten business days of receipt of a
debtor's statement of coerced debt, the creditor shall notify
all consumer reporting agencies to which the creditor furnished
adverse information about the debtor that the debtor disputes
the adverse information.

C. If the consumer provides a statement of coerced
debt and adequate documentation as required by Section 3 of the
Civil Relief from Coerced Debt Act to the creditor, the
creditor shall, within ten business days of receipt:

(1) suspend all attempts to collect the
coerced debt from the debtor;

(2) refrain from filing any lawsuit to collect
the coerced debt or, if a collection action related to the
coerced debt has already been filed, dismiss the action as
against the debtor unless the creditor is challenging that the
debt is not coerced debt in that action;

(3) cease all garnishment of funds from the
debtor;

(4) return to the debtor any payments that
were made by the debtor or received as part of a garnishment of
funds from the debtor on the coerced debt;

(5) notify the debtor that the creditor is
suspending all attempts to collect the debt from the debtor
based on the debtor's claim of coerced debt. The notice shall
be provided to the debtor using the debtor's preferred contact
method as specified in Section 3 of the Civil Relief from
Coerced Debt Act. The creditor shall inform the debtor of the
option to receive the notice in writing;

(6) contact all consumer reporting agencies to
which the creditor furnished information about the debtor and
the coerced debt and request that the agencies delete the
information; and

(7) refrain from selling the debt or
transferring the debt for consideration. If the creditor does
not own the debt and is collecting the debt for another, then
the creditor shall notify the owner of the debt that the
creditor has suspended collection activities against the
debtor.

D. Creditors shall not require debtors to submit a
police report or other court document or record.

E. If a debtor provides to a creditor a statement
of coerced debt that includes some but not all the information
required of a statement of coerced debt or provides an oral
statement of coerced debt without adequate documentation, the
creditor shall notify the debtor within fourteen business days,
using the debtor's preferred contact method, of the additional
information required to complete the statement of coerced debt
and of the adequate documentation requirement. If the creditor
provides this notice orally, the creditor shall inform the
debtor of the option to receive the notice in writing.

F. A creditor who provides a debtor with a model
form provided by the financial institutions division of the
regulation and licensing department shall be deemed to have met
notice requirements provided for in Subsection A of this
section.

G. All written notices under this section shall be
provided to all debtors in both English and Spanish. If the
creditor provides oral interpretation services or otherwise
communicates with the debtor in any language other than
English, the creditor shall provide the notice, orally or in
writing, required under this subsection to the debtor in the
debtor's preferred language.

H. In connection with any communication related to
a debtor's statement of coerced debt, a creditor:

(1) shall only use the contact information
that the debtor provides in the statement of coerced debt to
contact the debtor and shall not use any other contact
information; and

(2) shall maintain confidential the
information of a debtor alleging coerced debt and shall not
provide the contact information of the debtor or a copy of the
statement of coerced debt or supporting information to an
alleged perpetrator of coerced debt or another person but may
summarize the allegations about how the coerced debt was
incurred in order to collect the debt from the perpetrator.

SECTION 5.
[
NEW MATERIAL
] DUTY OF THE FINANCIAL
INSTITUTIONS DIVISION OF THE REGULATION AND LICENSING
DEPARTMENT.--Not later than one hundred eighty days after the
effective date of the Civil Relief from Coerced Debt Act, the
financial institutions division of the regulation and licensing
department shall publish a model form for creditors to provide
to debtors for use in submitting a statement of coerced debt to
the creditor in English and Spanish.

SECTION 6.
[
NEW MATERIAL
] CIVIL REMEDIES.--

A. A debtor may raise as a defense in any forum and
by any allowable procedure that a particular debt, or portion
thereof, is coerced debt.

B. A debtor establishes a prima facie case that a
debt is coerced debt by providing a statement of coerced debt
that meets the requirements of Subsection B of Section 3 of the
Civil Relief from Coerced Debt Act. If the creditor has a
good-faith basis to believe that the debt is not coerced debt,
the creditor may seek a court order in a court of competent
jurisdiction declaring the debt is not a coerced debt. In such
a suit, the creditor has the burden to disprove that the debt
is coerced debt.

C. A creditor may use all legal rights and remedies
to collect a coerced debt from a perpetrator of coerced debt.

D. In any court action, the presiding court shall
take appropriate steps necessary to protect the debtor or an
immediate family member of the debtor from an alleged
perpetrator of coerced debt by sealing court records, redacting
personally identifiable information about the debtor and any
immediate family member of the debtor and directing that any
deposition or evidentiary hearing be conducted remotely.

E. Any creditor who fails to comply with any
provision of Section 4 of the Civil Relief from Coerced Debt
Act is liable to the debtor in an amount equal to the sum of:

(1) all actual damages sustained by the debtor
as a result of such noncompliance;

(2) in the case of any action by an
individual, such additional damages as the court may allow, but
not exceeding five thousand dollars ($5,000) per violation
indexed annually for inflation or, in the case of a class
action, the amount for each named plaintiff that could be
recovered under Paragraph (1) of this subsection and an amount
that the court may allow for all other class members, without
regard to a minimum individual recovery, not to exceed the
lesser of five hundred thousand dollars ($500,000) indexed
annually for inflation or one percent of the net worth of the
debt collector;

(3) court costs and reasonable attorney fees
as determined by the court; and

(4) punitive damages if the court finds that a
creditor's noncompliance was willful.

F. The provisions of the Civil Relief from Coerced
Debt Act apply to lawsuits filed in this state, regardless of
whether a related contract provides that the law of another
state is chosen.

SECTION 7.
[
NEW MATERIAL
] APPLICABILITY.--

A. The Civil Relief from Coerced Debt Act:

(1) applies to a creditor who attempts to
evade that act's applicability by any device, subterfuge or
pretense; and

(2) does not:

(a) apply to debt secured by real
property; or

(b) diminish the rights of a creditor to
recover payment for a coerced debt from a perpetrator of
coerced debt.

B. The Civil Relief from Coerced Debt Act does not
reduce or eliminate any other rights or defenses available to a
debtor or creditor. In the event of an inconsistency between
debtor-creditor laws and that act, that act prevails to the
extent of the inconsistency.

C. An agreement between a debtor and any other
person shall not contain a provision that constitutes a waiver
of any right conferred or cause of action created by the Civil
Relief from Coerced Debt Act, and any such waiver is void.

- 12 -