Compare versions
--- version:Edition 1+++ version:Filed@@ -1,15 +1,13 @@GENERAL ASSEMBLY OF NORTH CAROLINASESSION 2025-H 1-HOUSE BILL 515+H D+HOUSE BILL DRH30194-LR-35BShort Title: North Carolina Economic Abuse Prevention Act. (Public)-Sponsors: Representatives T. Brown, Howard, Setzer, and Carney (Primary Sponsors).-For a complete list of sponsors, refer to the North Carolina General Assembly web site.-Referred to: Judiciary 2, if favorable, Finance, if favorable, Rules, Calendar, and Operations of-the House-March 26, 2025-*H515-v-1*+Sponsors: Representative T. Brown.+Referred to:++*DRH30194-LR-35B*A BILL TO BE ENTITLED 1AN ACT TO ENACT THE NORTH CAROLINA ECONOMIC ABUSE PREVENTION ACT. 2The General Assembly of North Carolina enacts: 3@@ -34,235 +32,238 @@b. A Federal Trade Commission identity theft report identifying a 22particular debt, or portion thereof, as coerced, but not as identity theft. 23c. A court order issued under Chapter 50 or Chapter 50B of the General 24-Statutes relating to domestic viole nce, Chapter 7B of the General 25+Statutes relating to domestic violence, Chapter 7B of the General 25Statutes relating to an abused, neglected, or dependent juvenile, or 26G.S. 108A-106 relating to disabled adults. 27d. A sworn written certification from a qualified third-party professional 28-based on information they received whi le acting in a professional 29+based on information they received while acting in a professional 29capacity. This documentation shall be signed by a qualified third-party 30professional and display the letterhead, address, and telephone number 31of the office, institution, center, or organization, as appropriate, that 32engages or employs, whether financially compensated or not, the 33qualified third -party professional, or, if the qualified third -party 34-General Assembly Of North Carolina Session 2025-Page 2 House Bill 515-First Edition-professional is self -employed, the documentation shall display the 1-letterhead, address, and telephone number of the qualified third -party 2-professional. 3-(3) Claim. – A right to payment, whether or not that right is reduced to judgment, 4-liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, 5-undisputed, legal, or equitable. 6-(4) Claimant. – A person or an entity who has or purports to have a claim against 7-a debtor arising from coerced debt, or that person 's or entity 's successor or 8-assignee. This definition includes, but is not limited to, a debt collector or a 9-debt buyer. Th e term does not include a person who caused the claim 10-described in subdivision (3) of this section to arise through duress, 11-intimidation, threat of force, force, fraud, or undue influence perpetrated 12-against the debtor. 13-(5) Coerced debt. – A particular debt, or portion thereof, for personal, family, or 14-household use in the name of a debtor who is a victim of domestic violence as 15-defined in G.S. 50B-1, or a victim of domestic abuse as defined in 16-G.S. 14-32.3(a), or a current or former child in foster care as defined in 17-G.S. 131D-10.2, incurred as a resul t of duress, intimidation, threat of force, 18-force, or undue influence. 19-(6) Debtor. – A person who owes or is otherwise liable for coerced debt. 20-(7) Fraud. – An initial fraudulent act that is perpetrated against the debtor. 21-(8) Immediate family member. – As defined in G.S. 53-244.030(13). 22-(9) Person. – A natural person. 23-(10) Qualified third -party professional. – Any of the following who also has a 24-degree, certificate, or license from an accredited program for counseling 25-domestic violence victims: 26-a. Any agent of a domestic violence or sexual assault program, as defined 27-in G.S. 8-53.12. 28-b. A guardian ad litem or attorney appointed in accordance with 29-G.S. 1A-1, Rule 17 of the Rules of Civil Procedure, or G.S. 7B-601. 30-c. A board-certified psychiatrist or psychologist. 31-d. A licensed marriage and family therapist. 32-e. A licensed professional clinical counselor. 33-f. A licensed clinical social worker. 34-g. A social worker or caseworker employed by a county department of 35-social services for the purposes described in G.S. 108A-100 or 36-G.S. 7B-100. 37-h. A non -licensed or credentialed domestic violence professional who 38-otherwise meets the criteria of G.S. 8-53.12(a)(1). 39-(11) Sworn written certification. – A document in which the author declares under 40-penalty of perjury as true any material fact, and which is accompanied by the 41-following, to the extent that an item listed below is relevant to the debtor 's 42-allegation that the debt is coerced debt: 43-a. A copy of the debtor's drivers license or identification card, as issued 44-by the State. 45-b. Any other identification document that supports the statement that the 46-particular debt, or portion thereof, is coerced debt. 47-c. An express statement that the debtor did not willingly authorize the 48-use of the debtor 's name or personal infor mation for incurring the 49-coerced debt, and specific facts supporting the claim of coerced debt, 50-General Assembly Of North Carolina Session 2025-House Bill 515-First Edition Page 3-if available, and, if not all of the debt was coerced, a statement 1-identifying the portion thereof that was coerced. 2-d. Any available correspondence disputing t he coerced debt after 3-transaction information has been provided to the debtor. 4-e. Information, if known by the debtor, including, but not limited to, a 5-credit card number or loan number, that can be used by the claimant 6-to identify the account associated with the coerced debt and the person 7-or persons in whose name the debt was incurred. 8-f. The identity of the person or persons who coerced the debtor into 9-incurring the debt and contact information for that person or persons, 10-if known by the debtor ; except when, in the alternative, the debtor 11-executes sworn statements asserting that disclosing this information is 12-likely to result in abuse to the debtor or an immediate family member 13-of the debtor and identifying the name, address, and telephone number 14-of the person or persons who coerced the debtor into incurring the debt. 15-g. A telephone number for contacting the person signing the certification 16-concerning any additional information or questions, or direction that 17-further communications to the debtor be in wri ting only, with the 18-mailing address specified in the statement. 19-h. The certification required by this subdivision shall be sufficient if it is 20-in substantially the following form: 21-"I declare under penalty of perjury that the representations made herein are true, correct, and 22-contain no material omissions of fact. 23-_______(Date and Place)________ _______(Signature)________" 24-"§ 1H-3. Scope. 25-(a) This Chapter does not apply to secured debts. 26-(b) This Chapter does not allow a court to order a claimant to refund any moneys already 27-paid on a debt that is determined to be coerced. 28-(c) This Chapter does not diminish the rights of a claimant to recover payment for a 29-coerced debt from the person or persons who coerced a debtor into incurring that debt. 30-(d) This Chapter does not reduce or eliminate any other rights or defenses available to a 31-debtor or claimant pursuant to any other law. 32-"§ 1H-4. Civil liability. 33-A person shall not cause another person to incur a coerced debt. A person who causes another 34-person to incur a coerced debt in violation of this section shall be civilly liable to the claimant 35-for the amount of the debt, or portion of said debt to be determined by a court, plus the claimant's 36-attorneys' fees and costs. 37-"§ 1H-5. Notice of coerced debts. 38-(a) Upon receipt of both of the following, a claimant shall cease collection activities until 39-completion of the review provided in subsection (c) of this section: 40-(1) Adequate documentation. 41-(2) The debtor 's sworn written certification that a particular debt, or portion 42-thereof, being collected is coerced debt. 43-(b) If a debtor notifies a claimant orally that a particular debt, or portion thereof, being 44-collected is coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtor's 45-notification must be in writing. If a debtor notifies a claimant in writing that a particular debt, or 46-portion thereof, being collected is coerced debt, but omits information required by subsection (a) 47-of this section, and, if the claimant does not cease collection activities, the claimant shall provide 48-written notice to the debtor of the additional information that is required. 49-(c) Within 10 business days of receiving the complete statement and information 50-described in subsection (a) of this section, the claimant shall, if the claimant furnished adverse 51-General Assembly Of North Carolina Session 2025-Page 4 House Bill 515-First Edition-information about the debtor to a consumer credit reporting agency, notify the consumer credit 1-reporting agency that the account is disputed. The claimant shall initiate a review considering all 2-of the information provided by the debtor and other information available to the claimant in its 3-file. Within 30 days of completing the review, the claimant shall notify the debtor in writing of 4-the claimant's determination and the goo d-faith basis for that determination. The claimant shall 5-not recommence collection activities until the debtor has been notified in writing of the good-faith 6-determination that the information does not establish that the particular debt, or portion thereof, 7-is coerced debt. 8-(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable 9-or not liable for the particular debt, or portion thereof, shall arise if the claimant decides after the 10-review described in subsection (c) of this section to cease or recommence collection activities. 11-The exercise or nonexercise of rights under this section is not a waiver of any other right or 12-defense of the debtor or claimant. 13-(e) At least 30 days before filing an action pursuant to G.S. 1H-6 or other action against 14-a claimant in connection with an allegedly coerced debt, a debtor shall submit notice of the 15-debtor's intent to file an action against the claimant and documents that comply with subsection 16-(a) of this section in writing to the claimant. This 30 -day period shall begin to run when the 17-claimant receives this written notice. This written notice shall meet all of the following 18-requirements: 19-(1) The notice shall be sent by certified mail, overnight delivery, or other method 20-that allows for confirmation of the delivery date. 21-(2) The notice shall be sent to an address made available to the debtor by the 22-claimant for receipt of the notice, or, if an address has not been identified by 23-the claimant, to the claimant's principal place of business as identified by the 24-Secretary of State. If an address is unavailable through the Secretary of State's 25-website, the debtor may use the correspondence address of the claimant, or in 26-the case of a debt collector, the address on file with the Depart ment of 27-Insurance for licensing purposes. 28-(f) The debtor shall not commence an action described in G.S. 1H-6 or other action 29-against a claimant in connection with an allegedly coerced debt if the claimant informs the debtor 30-that it has ceased all efforts t o collect on the particular debt, or portion thereof, identified in the 31-written notice pursuant to subsection (e) of this section and the debtor receives written notice of 32-this cessation before the expiration of the 30-day period. 33-(g) The debtor may commence an action described in G.S. 1H-6 or other action against a 34-claimant in connection with an allegedly coerced debt if either of the following conditions is 35-satisfied: 36-(1) The 30-day period described in subsection (e) of this section expires and the 37-collection activities have not ceased or the debtor has not received written 38-notice that collection activities have ceased. 39-(2) The debtor receives written notice pursuant to subsection (c) of this section of 40-the claimant's good-faith determination that the information does not establish 41-that the particular debt, or portion thereof, is coerced debt. 42-(h) A claimant that ceases collection activities under this section and does not 43-recommence those collection activities shall do both of the following: 44-(1) If the claimant has furnished adverse information to a consumer credit 45-reporting agency regarding the debtor and a particular debt, or portion thereof, 46-notify the agency to delete that information no later than 10 business days after 47-making its determination. 48-(2) If the claimant is a debt collector, notify the creditor no later than 10 business 49-days after making its determination that collection activities have been 50-General Assembly Of North Carolina Session 2025-House Bill 515-First Edition Page 5-terminated based upon the debtor's assertion that a particular debt, or portion 1-thereof, being collected is coerced debt. 2-"§ 1H-6. Order establishing relief from coerced debt. 3-(a) A debtor may bring an action against a claimant to establish that a particular debt, or 4-portion thereof, is coerced debt. 5-(b) In an action brought by a claimant to recover a particular debt against the debtor, the 6-debtor may file a cross -complaint to establish that the particular debt, or portion thereof, is 7-coerced debt. The notice described in G.S. 1H-5(c) shall not be required as a prerequisite to filing 8-a cross-complaint. A debtor shall plead the allegations of coerced debt with particularity and shall 9-do either of the following: 10-(1) Attach the documents provided to the claimant pursuant to G.S. 1H-5(a) to 11-any complaint. 12-(2) Attach the documents identified in G.S. 1H-5(a) to any cross-complaint. 13-(c) If the debtor establishes by a preponderance of the evidence that the particular debt, 14-or portion thereof, is coerced debt, the debtor shall be entitled to the following relief: 15-(1) A declaratory judgment that the debtor is not obligated to the claimant on the 16-particular debt, or portion thereof, that is coerced debt. 17-(2) An injunction prohibiting the claimant from holding or attempting to hold the 18-debtor personally liable on the particular debt, or portion t hereof, that is 19-coerced debt, and prohibiting the claimant from enforcing a judgment related 20-to the particular debt, or portion thereof, that is coerced debt against the debtor. 21-(3) An order dismissing any cause of action brought by the claimant to enforce or 22-collect on the particular debt from the debtor or, if only a portion of the debt 23-is established as coerced debt, an order directing that the complaint and 24-judgment, if any, in the action be amended to reflect only the portion of the 25-particular debt that is not coerced debt. 26-(c1) If the debtor establishes by a preponderance of the evidence that the particular debt, 27-or portion thereof, is coerced debt, the court shall issue a judgment in favor of the claimant against 28-the person or persons who coerced the debtor into incurring the debt in the amount of the debt, 29-or portion thereof, that is coerced debt, provided that the person or persons who coerced the 30-debtor into incurring the debt or debts has been brought within the jurisdiction of the court and 31-joined as a party to the action and the evidence supports such a judgment. The court presiding 32-over the action shall take the appropriate steps necessary to prevent abuse of the debtor or an 33-immediate family member of the debtor, including, but not limited to, s ealing court records, 34-redacting personally identifiable information about the debtor and any immediate family member 35-of the debtor, and directing that any deposition or evidentiary hearing be conducted remotely. 36-(d) A debtor who files knowingly false motions, pleadings, or other papers or engages in 37-other tactics that are frivolous or intended to cause unnecessary delay against a claimant shall be 38-liable for the claimant's attorneys' fees and costs in defending the lawsuit. 39-(e) The claimant may move the court to make written findings regarding evidence related 40-to the person who caused the coerced debt to be incurred. 41-"§ 1H-7. Miscellaneous provisions. 42-(a) Where some or all of a claim is established as having arisen from coerced debt, a 43-claimant shall have standing, and may use all rights and remedies, to collect by any lawful means 44-that claim, or portion thereof, from the person or persons determined to have coerced the debt, 45-or against a person who used or possessed money, goods, services, or property obtained through 46-coerced debt. 47-(b) The statute of limitations for a claimant to bring an action to collect coerced debt from 48-any person determined to have coerced the debt shall run from the date of the court 's 49-determination that the person caused the duress , intimidation, threat of force, force, fraud, or 50-General Assembly Of North Carolina Session 2025-Page 6 House Bill 515-First Edition-undue influence giving rise to the coerced debt at issue and shall be brought within five years of 1-that determination. 2-(c) If any provision of this Chapter or the application thereof to any person or 3-circumstances is held invalid, such invalidity shall not affect other provisions or applications of 4-this Chapter that can be given effect without the invalid provision or application and, to this end, 5-the provisions of this Chapter are severable. 6-(d) This Chapter applies only to debts incurred on or after July 1, 202 5, except that a 7-debtor may file a cross-complaint described by subsection (b) of this section in an action filed by 8-a claimant to collect a debt incurred prior to July 1, 2025, unless a final judgment has been entered 9-in that action." 10-SECTION 2. This act becomes effective July 1, 2025. 11+professional is self -employed, the documentation shall display the 35+H.B. 515+Mar 25, 2025+HOUSE PRINCIPAL CLERK+General Assembly Of North Carolina Session 2025+Page 2 DRH30194-LR-35B+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. Th e 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 fact, and which is accompanied by the 40+following, to the extent that an item listed below is relevant to the debtor 's 41+allegation that the debt is coerced debt: 42+a. A copy of the debtor's drivers license or identification card, as issued 43+by the State. 44+b. Any other identification document that supports the statement that the 45+particular debt, or portion thereof, is coerced debt. 46+c. An express statement that the debtor did not willingly authorize the 47+use of the debtor 's name or personal information for incurring the 48+coerced debt, and specific facts supporting the claim of coerced debt, 49+if available, and, if not all of the debt was coerced, a statement 50+identifying the portion thereof that was coerced. 51+General Assembly Of North Carolina Session 2025+DRH30194-LR-35B Page 3+d. Any available correspondence disputing the coerced debt after 1+transaction information has been provided to the debtor. 2+e. Information, if known by the debtor, including, but not limited to, a 3+credit card number or loan number, that can be used by the claimant 4+to identify the account associated with the coerced debt and the person 5+or persons in whose name the debt was incurred. 6+f. The identity of the person or persons who coerced the debtor into 7+incurring the debt and contact information for that person or persons, 8+if known by the debtor ; except when, in the alternative, the debtor 9+executes sworn statements asserting that disclosing this information is 10+likely to result in abuse to the debtor or an immediate family member 11+of the debtor and identifying the name, address, and telephone number 12+of the person or persons who coerced the debtor into incurring the debt. 13+g. A telephone number for contacting the person signing the certification 14+concerning any additional information or questions, or direction that 15+further communications to the debtor be in writing only, with the 16+mailing address specified in the statement. 17+h. The certification required by this subdivision shall be sufficient if it is 18+in substantially the following form: 19+"I declare under penalty of perjury that the representations made herein are true, correct, and 20+contain no material omissions of fact. 21+_______(Date and Place)________ _______(Signature)________" 22+"§ 1H-3. Scope. 23+(a) This Chapter does not apply to secured debts. 24+(b) This Chapter does not allow a court to order a claimant to refund any moneys already 25+paid on a debt that is determined to be coerced. 26+(c) This Chapter does not diminish the rights of a claimant to recover payment for a 27+coerced debt from the person or persons who coerced a debtor into incurring that debt. 28+(d) This Chapter does not reduce or eliminate any other rights or defenses available to a 29+debtor or claimant pursuant to any other law. 30+"§ 1H-4. Civil liability. 31+A person shall not cause another person to incur a coerced debt. A person who causes another 32+person to incur a coerced debt in violation of this section shall be civilly liable to the claimant 33+for the amount of the debt, or portion of said debt to be determined by a court, plus the claimant's 34+attorneys' fees and costs. 35+"§ 1H-5. Notice of coerced debts. 36+(a) Upon receipt of both of the following, a claimant shall cease collection activities until 37+completion of the review provided in subsection (c) of this section: 38+(1) Adequate documentation. 39+(2) The debtor 's sworn written certification that a particular debt, or portion 40+thereof, being collected is coerced debt. 41+(b) If a debtor notifies a claimant orally that a particular debt, or portion thereof, being 42+collected is coerced debt, the claimant shall notify the debtor, orally or in writing, that the debtor's 43+notification must be in writing. If a debtor notifies a claimant in writing that a particular debt, or 44+portion thereof, being collected is coerced debt, but omits information required by subsection (a) 45+of this section, and, if the claimant does not cease collection activities, the claimant shall provide 46+written notice to the debtor of the additional information that is required. 47+(c) Within 10 business days of receiving the complete statement and information 48+described in subsection (a) of this section, the claimant shall, if the claimant furnished adverse 49+information about the debtor to a consumer credit reporting agency, notify the consumer credit 50+reporting agency that the account is disputed. The claimant shall initiate a review considering all 51+General Assembly Of North Carolina Session 2025+Page 4 DRH30194-LR-35B+of the information provided by the debtor and other information available to the claimant in its 1+file. Within 30 days of completing the review, the claimant shall notify the debtor in writing of 2+the claimant's determination and the good -faith basis for that determination. The claimant shall 3+not recommence collection activities until the debtor has been notified in writing of the good-faith 4+determination that the information does not establish that the particular debt, or portion thereof, 5+is coerced debt. 6+(d) No inference or presumption that the debt is valid or invalid, or that the debtor is liable 7+or not liable for the particular debt, or portion thereof, shall arise if the claimant decides after the 8+review described in subsection (c) of this section to cease or recommence collection activities. 9+The exercise or nonexercise of rights under this section is not a waiver of any other right or 10+defense of the debtor or claimant. 11+(e) At least 30 days before filing an action pursuant to G.S. 1H-6 or other action against 12+a claimant in connection with an allegedly coerced debt, a debtor shall submit notice of the 13+debtor's intent to file an action against the claimant and documents that comply with subsection 14+(a) of this section in writing to the claimant. This 30 -day period shall begin to run when the 15+claimant receives this written notice. This written notice shall meet all of the following 16+requirements: 17+(1) The notice shall be sent by certified mail, overnight delivery, or other method 18+that allows for confirmation of the delivery date. 19+(2) The notice shall be sent to an address made available to the debtor by the 20+claimant for receipt of the notice, or, if an address has not been identified by 21+the claimant, to the claimant's principal place of business as identified by the 22+Secretary of State. If an address is unavailable through the Secretary of State's 23+website, the debtor may use the correspondence address of the claimant, or in 24+the case of a debt collector, the address on file with the Department of 25+Insurance for licensing purposes. 26+(f) The debtor shall not commence an action described in G.S. 1H-6 or other action 27+against a claimant in connection with an allegedly coerced debt if the claimant informs the debtor 28+that it has ceased all efforts to collect on the particular debt, or portion thereof, identified in the 29+written notice pursuant to subsection (e) of this section and the debtor receives written notice of 30+this cessation before the expiration of the 30-day period. 31+(g) The debtor may commence an action described in G.S. 1H-6 or other action against a 32+claimant in connection with an allegedly coerced debt if either of the following conditions is 33+satisfied: 34+(1) The 30-day period described in subsection (e) of this section expires and the 35+collection activities have not ceased or the debtor has not received written 36+notice that collection activities have ceased. 37+(2) The debtor receives written notice pursuant to subsection (c) of this section of 38+the claimant's good-faith determination that the information does not establish 39+that the particular debt, or portion thereof, is coerced debt. 40+(h) A claimant that ceases collection activities under this section and does not 41+recommence those collection activities shall do both of the following: 42+(1) If the claimant has furnished adverse information to a consumer credit 43+reporting agency regarding the debtor and a particular debt, or portion thereof, 44+notify the agency to delete that information no later than 10 business days after 45+making its determination. 46+(2) If the claimant is a debt collector, notify the creditor no later than 10 business 47+days after making its determination that collection activities have been 48+terminated based upon the debtor's assertion that a particular debt, or portion 49+thereof, being collected is coerced debt. 50+"§ 1H-6. Order establishing relief from coerced debt. 51+General Assembly Of North Carolina Session 2025+DRH30194-LR-35B Page 5+(a) A debtor may bring an action against a claimant to establish that a particular debt, or 1+portion thereof, is coerced debt. 2+(b) In an action brought by a claimant to recover a particular debt against the debtor, the 3+debtor may file a cross -complaint to establish that the particular debt, or portion thereof, is 4+coerced debt. The notice described in G.S. 1H-5(c) shall not be required as a prerequisite to filing 5+a cross-complaint. A debtor shall plead the allegations of coerced debt with particularity and shall 6+do either of the following: 7+(1) Attach the documents provided to the claimant pursuant to G.S. 1H-5(a) to 8+any complaint. 9+(2) Attach the documents identified in G.S. 1H-5(a) to any cross-complaint. 10+(c) If the debtor establishes by a preponderance of the evidence that the particular debt, 11+or portion thereof, is coerced debt, the debtor shall be entitled to the following relief: 12+(1) A declaratory judgment that the debtor is not obligated to the claimant on the 13+particular debt, or portion thereof, that is coerced debt. 14+(2) An injunction prohibiting the claimant from holding or attempting to hold the 15+debtor personally liable on the particular debt, or portion thereof, that is 16+coerced debt, and prohibiting the claimant from enforcing a judgment related 17+to the particular debt, or portion thereof, that is coerced debt against the debtor. 18+(3) An order dismissing any cause of action brought by the claimant to enforce or 19+collect on the particular debt from the debtor or, if only a portion of the debt 20+is established as coerced debt, an order directing that the complaint and 21+judgment, if any, in the action be amended to reflect only the portion of the 22+particular debt that is not coerced debt. 23+(c1) If the debtor establishes by a preponderance of the evidence that the particular debt, 24+or portion thereof, is coerced debt, the court shall issue a judgment in favor of the claimant against 25+the person or persons who coerced the debtor into incurring the debt in the amount of the debt, 26+or portion thereof, that is coerced debt, provided that the person or persons who coerced the 27+debtor into incurring the debt or debts has been brought within the jurisdiction of the court and 28+joined as a party to the action and the evidence supports such a judgment. The court presiding 29+over the action shall take the appropriate steps necessary to prevent abuse of the debtor or an 30+immediate family member of the debtor, including, but not limited to, sealing court records, 31+redacting personally identifiable information about the debtor and any immediate family member 32+of the debtor, and directing that any deposition or evidentiary hearing be conducted remotely. 33+(d) A debtor who files knowingly false motions, pleadings, or other papers or engages in 34+other tactics that are frivolous or intended to cause unnecessary delay against a claimant shall be 35+liable for the claimant's attorneys' fees and costs in defending the lawsuit. 36+(e) The claimant may move the court to make written findings regarding evidence related 37+to the person who caused the coerced debt to be incurred. 38+"§ 1H-7. Miscellaneous provisions. 39+(a) Where some or all of a claim is established as having arisen from coerced debt, a 40+claimant shall have standing, and may use all rights and remedies, to collect by any lawful means 41+that claim, or portion thereof, from the person or persons determined to have coerced the debt, 42+or against a person who used or possessed money, goods, services, or property obtained through 43+coerced debt. 44+(b) The statute of limitations for a claimant to bring an action to collect coerced debt from 45+any person determined to have coerced the debt shall run from the date of the court 's 46+determination that the person caused the duress, intimidation, threat of force, force, fraud, or 47+undue influence giving rise to the coerced debt at issue and shall be brought within five years of 48+that determination. 49+(c) If any provision of this Chapter or the application thereof to any person or 50+circumstances is held invalid, such invalidity shall not affect other provisions or applications of 51+General Assembly Of North Carolina Session 2025+Page 6 DRH30194-LR-35B+this Chapter that can be given effect without the invalid provision or application and, to this end, 1+the provisions of this Chapter are severable. 2+(d) This Chapter applies only to debts incurred on or after July 1, 202 5, except that a 3+debtor may file a cross-complaint described by subsection (b) of this section in an action filed by 4+a claimant to collect a debt incurred prior to July 1, 2025, unless a final judgment has been entered 5+in that action." 6+SECTION 2. This act becomes effective July 1, 2025. 7
Diffs are computed deterministically from extracted bill text and show additions, deletions, and section moves. Scanned-PDF text extracted via OCR is flagged where confidence is low; see methodology.