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March 3, 2023

CT bill proposes relief from ‘coerced debt’ for domestic violence victims

CT-N Sen. Patricia Billie Miller, D-Stamford, heard testimony from Karen Robbins, who said she was a victim of coerced debt and domestic abuse.

“D,” a survivor of domestic abuse, first reached out to the Greenwich YWCA when she was considering leaving her husband. Beyond the verbal abuse and physical threats of violence D experienced, her husband had also taken on more than $200,000 of debt in D’s name and never made payments on it, representatives of the YWCA told legislators in testimony this week.

“When it came time for her to transition into independent housing, D’s low credit score resulted in her being rejected by many, many potential landlords,” the Greenwich YWCA’s Mary Lee A. Kiernan and Meredith Gold wrote in their testimony. 

Connecticut lawmakers are considering legislation that would give recourse to victims, like D, of what’s known as “coerced debt” — that is, debt that was incurred in a victim’s name by an abusive domestic partner, often fraudulently or under threat. 

Advocates say nearly all domestic violence survivors experience such financial abuse, which can leave them in a precarious economic position long after they’ve left abusive relationships. 

D eventually filed for bankruptcy, which helped with her outstanding debt, Kiernan and Gold wrote, but “D’s financial security will be impacted for years.”

Senate Bill 1086, modeled after similar legislation in California and Maine, lays out the documentation survivors need to show that any debt was “incurred as a result of duress, intimidation, threat of force, force, fraud or undue influence,” orders creditors to cease collection of those debts from the victim and orders credit rating agencies to reevaluate the debt and remove it from the victim’s credit report. 

The General Assembly’s Banking Committee heard public testimony on S.B. 1086, along with more than a dozen other proposals, in an hours-long hearing Thursday. 

Representatives from the Connecticut Creditor Bar Association and the Association of Credit and Collection Professionals, also known as ACA, offered testimony asking for further refinement to the bill’s language, particularly with regard to holding the perpetrator accountable. 

“We believe it is important to be crystal clear that the perpetrator will be responsible for their actions and not allowed to retain any economic benefits derived from their abuse,” CCBA President William Marohn wrote.

Andrew Madden of ACA called the goal of the legislation “noble” and asked legislators to consider adding accountability measures for debtors who might make false claims.

Speaking before the Banking Committee on Thursday afternoon, Karen Robbins told lawmakers she is a domestic abuse survivor and has been working for three years “trying to end my marriage and reclaim financial independence.” She said her ex-husband used her identity to open credit card accounts and take out a mortgage. He also stole from their children’s savings accounts, she told the committee.

Robbins said she’s spent countless hours on the phone with attorneys and banks, and as a result of the damage to her credit, she’s had trouble obtaining car insurance and life insurance. Robbins said she had to ask a friend to put their name on a lease for the apartment where she and her children live.

“Coerced debt can eradicate a survivor’s ability to move forward with their lives, provide for their children and begin the difficult work of restoring emotional and financial independence,” Robbins said. She said S.B. 1086 “will significantly improve the odds of victims like me regaining control of their futures.”

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