9 V.S.A. § 2495c: Creditor’s conduct pursuant to a debtor’s statement of coerced debt [Effective July 1, 2028]

(a) Within 10 business days following receipt of a debtor’s statement of coerced debt and adequate documentation, a creditor shall:

(1) cease all collection activities and refrain from selling, assigning, or otherwise transferring for consideration such debt;

(2) notify the debtor it has ceased all collection activities pending further review of the claim; and

(3) notify any credit reporting agency to which it furnished adverse information about such debt that the debtor disputes the accuracy of the adverse information.

(b) If a debtor notifies a creditor that a particular debt being collected, or a portion thereof, is coerced debt, but does not provide all the information required under subsection (a) of this section or provides such notice orally, and if such creditor does not cease such collection activities, then within 10 business days after receipt of the debtor’s notice of the coerced debt, the creditor shall inform the debtor that additional written information is required and shall provide the debtor with Model Form A-1, as described in subsection (g) of this section.

(c)(1) Within 30 days following receipt of a debtor’s statement of coerced debt and adequate documentation, the creditor shall complete a reasonable investigation of the disputed information, which shall include a review of all information provided by the debtor and any other relevant information available to the creditor and, upon completion of the investigation, make a determination as to the accuracy of the debtor’s claim of coerced debt.

(2) The 30-day period described in subdivision (1) of this subsection may be extended for up to an additional 15 days if the creditor receives supplementary information from the debtor during that 30-day period that is relevant to the investigation.

(d) Within five business days after making a determination under subsection (c) of this section, the creditor shall notify the debtor of such determination in writing and shall provide a good faith basis for the determination. The notice shall not include personally identifiable information of another person. If the creditor:

(1) determines the disputed debt is coerced debt, the creditor shall notify the debtor that it is ceasing collection activities and contact any consumer reporting agencies to which it furnished adverse information about the debtor’s coerced debt and request that such information be deleted from the debtor’s file and credit report; or

(2) determines the available information does not establish that the disputed debt is coerced debt, the creditor may recommence collection activities; however, the creditor is prohibited from selling, assigning, or otherwise transferring such debt.

(e) All communications from the creditor to a debtor under this section shall be made using only the debtor’s preferred contact method and, in addition, the creditor shall make reasonable efforts to use the debtor’s preferred language as identified in the debtor’s statement of coerced debt.

(f) In connection with a statement of coerced debt, the creditor:

(1) shall not disclose the contact information the debtor provides in the statement of coerced debt to any other person, including the perpetrator or joint account holders, without the debtor’s express written authorization, unless directed or authorized to do so by court order; and

(2) may request that the debtor provide the identity of and contact information for the perpetrator, if known, unless the debtor signs a sworn statement that disclosing such information is likely to result in abuse to the debtor or to a member of the debtor’s immediate family.

(g) Model Form A-1 shall be developed by the Commissioner of Financial Regulation, posted in English and Spanish on a publicly accessible website maintained by the Department of Financial Regulation, and substantially in the following form:

MODEL FORM A-1 FOR CREDITORS TO PROVIDE TO DEBTORS

[Creditor name:

Address:

Email address:

Telephone number:

Website URL where this form can be filled out online]

[Debtor’s name]

[Debtor’s preferred contact information: debtor may provide a telephone number, email address, physical address, or the address of a third party]

[Debtor’s preferred language]

You have given us information about a debt that may have been taken out because someone used your personal information without your permission or because someone intimidated, threatened, forced, or manipulated you into taking out this debt.

For example, an abusive partner could have taken out a credit card or loan in your name without your knowledge or permission or pressured you into taking out credit to buy a car, television, computer, or other item and threatened you with harm if you refused.

Questions: To temporarily or permanently stop collection of this debt, you need to answer the questions below. If you do not know the answer, you can explain why you do not know the answer.

1. Did you sign for or agree to the debt?

2. If you did sign for or agree to the debt, was it because someone threatened you or used intimidation, force, manipulation, theft, or other forms of control to take out the debt in your name? If yes, please describe how it happened.

3. If you did not sign for or agree to the debt, do you know who used your information to take out the debt? If yes, please describe.

4. What is your preferred contact method and contact information? You can provide a telephone number, email address, physical address, safe address, or the contact information of another trusted person you want to receive information for you because you are concerned about your safety.

Supporting Documentation: Please include at least one of the documents below that show that the debt was taken out by someone who threatened you or used intimidation, force, manipulation, theft, or other forms of control to take out the debt in your name. You only need to send one, but you may provide more than one.

1. A copy of a report filed with a federal, state, or local law enforcement agency that identifies the coerced debt and the circumstances under which the coerced debt was incurred, the filing of which subjects the person filing the report to criminal penalties for filing false information if, in fact, the information in the report is false;

2. A court order finding that the debt was coerced; or

3. A sworn certification from a qualified third-party professional you talked with about this debt. The statement should include who the person is, where the person works, the person’s contact information, and information you shared with the person about the debt and how it was taken out. The third party may be:

(a) an officer of the court or law enforcement personnel;

(b) a court-appointed special advocate;

(c) a crisis worker as defined in 12 V.S.A. § 1614(a)(1) employed at a program that assists survivors of domestic violence, sexual assault, stalking, human trafficking, or abuse of children, and who has relevant training or expertise;

(d) a licensed attorney; or

(e) a health care provider as defined in 18 V.S.A. § 9402(7). In addition to the required documentation, you may include any other document [such as a divorce decree, restraining order, protection from abuse order or another document] that includes information about the debt and how it was taken out.

We need to receive your answers to the above questions and at least one document supporting your claim before we stop collecting on the debt.

Within 30 days after we receive this information, we will do all of the following:

1. Notify you in writing that we are stopping all attempts to collect the debt from you, pending our review of your claim.

2. Review your claim and make a determination as to whether you should be relieved from liability for the coerced debt.

3. Contact the consumer reporting agencies to which we gave information about you and the coerced debt and request that they remove the information from your file and credit report. Alternatively, we also have the right to challenge your claim of coerced debt in court, subject to legal protections for victims of coerced debt.

Your statement of coerced debt must be notarized or certified as true and accurate by you under penalty of perjury.

If you have questions, please contact us at: [creditor’s name, mailing address, telephone number, and email address]. If you prefer to communicate with us by email, please confirm with us by telephone our correct email address for submitting information about the debt so we can ensure a timely response.

For more information, see 9 V.S.A. chapter 63, subchapter 13.

(h) With respect to coerced debt secured by tangible personal property, nothing in this subchapter shall affect a creditor’s right to enforce a security interest upon default under 9A V.S.A. Article 9 (Uniform Commercial Code - Secured Transactions), including repossession, surrender, or court-ordered seizure of the subject collateral. However, a creditor is prohibited from collecting or seeking to collect any deficiency from the victim of coerced debt.