New York has enacted new consumer protections related to coerced debt following Gov. Kathy Hochul’s signing of Senate Bill S1353B on Dec. 19, 2025. The law establishes restrictions on the enforcement of certain consumer debts and outlines new legal remedies for affected individuals.
Under the statute, creditors are prohibited from enforcing consumer debts that were incurred through fraud, duress, intimidation, threats, force, identity theft, or the exploitation of a debtor’s personal information. The law also covers similar forms of economic abuse and creates a private right of action, allowing consumers to seek relief when violations occur.
The legislation will take effect on March 19, 2026, which is 90 days after the governor’s approval.
Definition and Documentation Requirements
The law defines coerced debt as debt incurred through economic abuse, including — but not limited to — coercion, manipulation, undue influence, or the non-consensual use of a consumer’s personal information.
To obtain relief under the statute, consumers must provide documentation supporting their claim. Acceptable documentation includes a police report, a Federal Trade Commission identity theft report identifying a specific debt or portion of a debt as coerced, or written confirmation from a qualified third party who received a report of coerced debt from the consumer.
Industry and Legislative Activity
The New York State Collectors Association supported the legislation and has worked with lawmakers on technical amendments related to the law’s implementation. Ongoing discussions have included potential changes such as tolling the statute of limitations while a reported coerced debt is under investigation.
Similar Laws in Other States
New York’s coerced debt law follows similar measures enacted in several other states, including Illinois, Connecticut, and Minnesota. Legislative teams in Illinois and New York collaborated on amendments to earlier proposals and incorporated language previously adopted in Connecticut and Minnesota.
In Illinois, coerced debt protections under House Bill 3352 are scheduled to take effect on Jan. 1, 2026. The Illinois Department of Financial and Professional Regulation has published a Statement of Coerced Debt form, along with instructions for submitting documentation and written verification from a qualified third party. These materials are available through the department’s Division of Financial Institutions.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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