Earlier today, the House passed a bill that would grant victims of financial abuse the ability to appeal their debt to creditors. The House deliberated on a similar bill in last year’s session, but were unable to iron out various legal kinks in time to pass it. If passed as amended by the Senate, and signed by the governor, it would make Connecticut the second state offering such protections for victims of financial abuse.
This year’s bill, titled An Act Concerning Coerced Debt, builds upon the framework that legislative members established last year. It defines coerced debt as any personal, family, or household debt held in the name of a domestic violence victim, taken out as a result of their abuser’s threats or intimidation. Coercive debt is especially prominent in situations of spousal or elder abuse.
“Coerced debt is non-consensual debt that often arises in a social situation of domestic violence, or what we now call coercive control,” said Rep. Jason Doucette (D- Manchester). “It goes without saying that this type of debt, certainly when in default, can result in devastating consequences to the debtor.”
The bill would allow for victims to notify creditors that they debt they owe is coerced, and the creditor would have a predetermined period to review the claim and any additional proof that the victim submits in support of it. During this review period, the creditor would also be required to stop any collection activities, including any court proceedings, against the debtor. If it is found that the debtor was in fact a victim of coercion, the debt’s liability may then be transferred to the abuser, and the creditor would be obligated to inform any credit agencies they contacted to remove penalties inflicted on the debtor’s credit report as a result of their coerced debt.
Karen Robbins, a Connecticut woman who was subjected to years of financial abuse, submitted written testimony in support of the bill that highlighted her own struggles with coerced debt.
“I spent the past three years in Connecticut Family Court trying to end my marriage and reclaim my financial independence after enduring post-separation abuse directed by my ex-husband,” wrote Robbins. “The State of Connecticut needs strong laws to protect the vulnerable from wrongdoers who are presently empowered to exert extraordinary undue influence on shelter, sustenance, education, healthcare, and more.”
Robbins said that she discovered the extent of her ex-husband’s financial abuse in 2020, finding that since 2002, he had used her personal information to open numerous credit cards, take out fraudulent mortgages on her home, and take money from her children’s 529 plans. After explaining her situation to several creditors, she was able to get over $100,000 in debt forgiven, but was forced to sell her home in 2022 and still struggles to take out loans or obtain housing as a result of her downtrodden credit score.
“Every adult-aged Connecticut resident knows full well that credit scores and consumer reports play the dominant role in their financial lives,” said Robbins. “Without good credit, victims of economic familial abuse/coerced debt face overwhelming long odds in terms of qualifying for rental housing, home mortgages, auto loans or even employment whenever a pre-hiring background check uncovers delinquent credit reports.”
Rep. Doucette brought an amendment before the House that would significantly alter the bill. Most notably, it would remove a section of the underlying bill which originally outlined a secondary procedure for claimants to seek recourse if creditors deny their initial claim. This secondary procedure offered ways in which claimants could initiate legal action against creditors if they are not satisfied with the creditors’ ruling.
Doucette said that this amendment came as a result of collaboration with representatives Craig Fishbein (R-Wallingford) and Steven Stafstrom (D-Bridgeport), in hopes of reducing legal redundancies. Doucette said that existing law already provides “court proceedings, pleadings and causes of action” through which creditors and debtors alike can dispute the validity of an owed debt. Additionally, the amendment also increased the time which creditors have to review coerced debt claims, from an initial period of 30 days in the underlying bill, to 60 days as per the amendment.
Rep. Fishbein, whose questioning of the finer points of the bill’s predecessor in last year’s session ultimately prevented its passage, spoke in support of the amendment.
“I will admit that when the session started, this is one of the bills that, there is no way I thought I’d be standing up here today supporting,” said Rep. Fishbein. “I think what we have before us, the omitted language, is a really good piece of legislation.”
Ultimately, the amendment was passed by verbal vote.
“I stand here in all confidence in saying that we, the state of Connecticut, through passage of this legislation are leading the nation,” said Fishbein.
Fishbein said that last year’s bill was essentially a copy of a bill California passed in 2022, and presented a variety of problems that he thought needed to be addressed before he could support the bill. Fishbein said that the potential for a coercive debt’s liability to be transferred from victims to their abusers is “not something expressly contemplated by the California law.”
Another provision of Connecticut’s bill missing from California’s, per Fishbein, is the ability of victims to hide the identity of their abuser when notifying creditors, in cases where disclosing their abuser’s name could put victims at risk of retaliation.
Representatives Anthony Nolan (D-New London), Lucy Dathan (D-New Canaan), and Robyn Porter (D-New Haven) also spoke in support of the bill. Nolan, a former police officer, supported because he saw countless cases of domestic abusers financially trapping their victims over the course of his career. Dathan agreed with Fishbein’s remarks about “how, fundamentally, much better this law is than California’s.” Porter said that as a “thriving survivor” of domestic violence herself, the bill was “awesome” and “ought to pass.”
The bill passed as amended with an unanimous vote of 149-0. Because the House passed an amended version of the bill, it will now have to be reconsidered by the Senate, which initially voted 35-1 in favor of the underlying bill on April 24. If the Senate passes this amended version of the bill, it will be considered in concurrence with the House, and will then have to be signed by the governor to be passed as law.
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