N.Y. GBS Law § 604-CC — New York Code / Act GBS / Article 29-HHH / Section 604-CC
Coerced debt cause of action and affirmative defense
Status: in_force

§ 604-cc. Coerced debt cause of action and affirmative defense. 1. A\ndebtor shall have a cause of action against a creditor in any court\nhaving jurisdiction to issue a declaratory judgment establishing that a\ndebt or portion of a debt asserted to be owed to such creditor is a\ncoerced debt. Notwithstanding section one thousand one of the civil\npractice law and rules, any individual alleged to have caused such\ncoerced debt to be incurred shall not be a necessary party to such\naction. Such action shall not be commenced and maintained unless the\ndebtor has submitted a request for reconsideration under subdivision\nfour of section six hundred four-bb of this article of the creditor's\ndecision to recommence debt collection activities based on such\ncreditor's review of the debtor's notice of coerced debt and the\ncreditor either affirmed the creditor's determination that the debt is\nnot coerced or the debtor has not received written notice the creditor\ndetermined that the debt is coerced debt within thirty-five days of\nsubmitting the request for reconsideration.\n  2. In an action under subdivision one of this section, a debtor shall\nplead the allegations of coerced debt with particularity and shall\nattach the documents provided to the creditor pursuant to subdivision\none of section six hundred four-bb of this article to any complaint.\n  3. A debtor who establishes by a preponderance of the evidence in an\naction pursuant to subdivision one of this section that a debt or\nportion of a debt asserted to be owed to the creditor is coerced debt\nshall, unless the creditor provides information that would otherwise\nshow that the determination that the debt was not coerced was the result\nof the creditor's bona fide error, be entitled to the following relief:\n  (a) a declaratory judgment stating that the debt or portion thereof is\ncoerced debt and that the alleged debtor shall not be liable for such\ncoerced debt;\n  (b) an order enjoining or restraining the creditor from holding or\nattempting to hold the debtor personally liable for the coerced debt or\nattempting to obtain or enforce any judgment thereon against such debtor\nand enjoining and restraining all future collection activities with\nrespect to such debt;\n  (c) an order dismissing any other cause of action brought by the\ncreditor to enforce or collect the coerced debt from the debtor;\n  (d) if the creditor has furnished adverse information to a consumer\nreporting agency with respect to such coerced debt, an order directing\nthe creditor to notify such agency to delete all such adverse\ninformation; and\n  (e) the costs and attorneys' fees reasonably incurred in bringing such\naction.\n  4. In any action by a creditor against a debtor to collect a debt, it\nshall be an affirmative defense to such action that all or a portion of\nthe debt is coerced debt. Providing notice to the creditor under section\nsix hundred four-bb of this article shall not be a prerequisite to\nasserting such defense; provided, however, the documents described in\nsubdivision one of section six hundred four-bb of this article shall be\nannexed to the debtor's answer. Notwithstanding section one thousand one\nof the civil practice law and rules, any individual alleged to have\ncaused such coerced debt to be incurred shall not be or become a\nnecessary party to such action.\n  5. An action pursuant to subdivision one of this section shall be\ncommenced within three years after the date on which the debtor provided\nthe notice of coerced debt pursuant to section six hundred four-bb of\nthis article to the creditor; provided, however, that if such creditor,\nits assignor, or any assignee recommences collection activities on the\ndebt after ceasing collection activities on such debt based on such\ncreditor's review of the debtor's claim of coerced debt, such debtor\nshall have the right to file a subsequent notice of coerced debt\npursuant to subdivision six of section six hundred four-bb of this\narticle and the statute of limitations shall commence on the date on\nwhich such debtor provided such subsequent notice of coerced debt.\n  6. If requested by the debtor, the court presiding over any action in\nwhich coerced debt is raised as a claim or affirmative defense shall\ntake appropriate steps necessary to prevent abuse of such debtor or an\nimmediate family member of such debtor, including but not limited to the\nsealing of court records, the redaction of such debtor's or their\nimmediate family member's personal information, and/or directing that\nany disposition or hearing be held remotely.\n  7. The provisions of this article shall not be construed so as to\nprevent a creditor from enforcing any claim or collecting judgment\narising out of a lawful debt or portion thereof from any other person or\nentity other than the coerced debtor.\n  8. Collection activities, for the purpose of this section, do not\ninclude any communication between a creditor or debtor that is required\nby state or federal law or regulation.\n