Coerced Debt

Survivors of domestic violence face numerous obstacle to becoming safe and rebuilding their lives. Even after personal safety challenges are addressed, recent studies have found that economic abuse, in the form of coerced debt, lingers—through bad credit caused by the abuser. Coerced debt is debt incurred by an abuser, in the name of a victim of domestic violence, through threat, force or fraud. It is a form of coercive control, identity theft, and economic abuse. Consumer reports and credit scores impact vast parts of our economic lives, from the ability to rent an apartment and get a job, to the cost of insurance and credit.  By expanding awareness of coerced debt and its impacts on survivors of domestic violence, as well as promoting policy solutions to address this growing problem, we can offer key economic support to survivors of domestic violence to gain, maintain or rebuild, financial security.

HIGHLIGHTS

  • New Texas Law: In 2021, successfully advocated for HB 3529, which builds on important changes from the 2019 legislative session. This new bill streamlines Texas law to ensure access to remedies under Chapter 521 of the Business and Commerce Code for victims of coerced debt. Chapter 521 enables victims to be declared victims of identity theft in state district court, based on the facts surrounding a particular debt. Once a person has such a declaration from a court, it can be used as a defense in a debt collection lawsuit to remove coerced debts from a credit report and to stop other collection efforts. This expansion is essential for survivors of domestic violence, as they often face pushback from credit bureaus and debt collectors even when they have a police report alleging identity theft. It also helps survivors of domestic violence who may not feel comfortable going to the police because of fear or intimidation.
  • New Texas Law: In 2019, helped to lead efforts to ensure the passage of HB 2697, which expands the definition of identity theft to include debts incurred through coercion (coerced debt), creating a pathway to financial recovery for victims of financial abuse.
  • Coalition Forms to Educate & Train Direct Service Providers About Coerced Debt: In 2019, the Texas Coalition on Coerced Debt formed as a collaboration of Texas Appleseed, Texas RioGrande Legal Aid, the Texas Legal Services Center, the Texas Council on Family Violence, and a broad array of stakeholders and experts.
  • New Report: Produced Abuse by Credit: The Problem of Coerced Debt in Texas, a first-of-its-kind study examining the growing problem of identity theft within abusive relationships. Following the report, the State of Texas passed HB 2697.