N.Y. General Business Law § 604-cc: Coerced debt cause of action and affirmative defense

§ 604-cc. Coerced debt cause of action and affirmative defense. 1. A

debtor shall have a cause of action against a creditor in any court

having jurisdiction to issue a declaratory judgment establishing that a

debt or portion of a debt asserted to be owed to such creditor is a

coerced debt. Notwithstanding section one thousand one of the civil

practice law and rules, any individual alleged to have caused such

coerced debt to be incurred shall not be a necessary party to such

action. Such action shall not be commenced and maintained unless the

debtor has submitted a request for reconsideration under subdivision

four of section six hundred four-bb of this article of the creditor's

decision to recommence debt collection activities based on such

creditor's review of the debtor's notice of coerced debt and the

creditor either affirmed the creditor's determination that the debt is

not coerced or the debtor has not received written notice the creditor

determined that the debt is coerced debt within thirty-five days of

submitting the request for reconsideration.

2. In an action under subdivision one of this section, a debtor shall

plead the allegations of coerced debt with particularity and shall

attach the documents provided to the creditor pursuant to subdivision

one of section six hundred four-bb of this article to any complaint.

3. A debtor who establishes by a preponderance of the evidence in an

action pursuant to subdivision one of this section that a debt or

portion of a debt asserted to be owed to the creditor is coerced debt

shall, unless the creditor provides information that would otherwise

show that the determination that the debt was not coerced was the result

of the creditor's bona fide error, be entitled to the following relief:

(a) a declaratory judgment stating that the debt or portion thereof is

coerced debt and that the alleged debtor shall not be liable for such

coerced debt;

(b) an order enjoining or restraining the creditor from holding or

attempting to hold the debtor personally liable for the coerced debt or

attempting to obtain or enforce any judgment thereon against such debtor

and enjoining and restraining all future collection activities with

respect to such debt;

(c) an order dismissing any other cause of action brought by the

creditor to enforce or collect the coerced debt from the debtor;

(d) if the creditor has furnished adverse information to a consumer

reporting agency with respect to such coerced debt, an order directing

the creditor to notify such agency to delete all such adverse

information; and

(e) the costs and attorneys' fees reasonably incurred in bringing such

action.

4. In any action by a creditor against a debtor to collect a debt, it

shall be an affirmative defense to such action that all or a portion of

the debt is coerced debt. Providing notice to the creditor under section

six hundred four-bb of this article shall not be a prerequisite to

asserting such defense; provided, however, the documents described in

subdivision one of section six hundred four-bb of this article shall be

annexed to the debtor's answer. Notwithstanding section one thousand one

of the civil practice law and rules, any individual alleged to have

caused such coerced debt to be incurred shall not be or become a

necessary party to such action.

5. An action pursuant to subdivision one of this section shall be

commenced within three years after the date on which the debtor provided

the notice of coerced debt pursuant to section six hundred four-bb of

this article to the creditor; provided, however, that if such creditor,

its assignor, or any assignee recommences collection activities on the

debt after ceasing collection activities on such debt based on such

creditor's review of the debtor's claim of coerced debt, such debtor

shall have the right to file a subsequent notice of coerced debt

pursuant to subdivision six of section six hundred four-bb of this

article and the statute of limitations shall commence on the date on

which such debtor provided such subsequent notice of coerced debt.

6. If requested by the debtor, the court presiding over any action in

which coerced debt is raised as a claim or affirmative defense shall

take appropriate steps necessary to prevent abuse of such debtor or an

immediate family member of such debtor, including but not limited to the

sealing of court records, the redaction of such debtor's or their

immediate family member's personal information, and/or directing that

any disposition or hearing be held remotely.

7. The provisions of this article shall not be construed so as to

prevent a creditor from enforcing any claim or collecting judgment

arising out of a lawful debt or portion thereof from any other person or

entity other than the coerced debtor.

8. Collection activities, for the purpose of this section, do not

include any communication between a creditor or debtor that is required

by state or federal law or regulation.