Debt: coerced debts.

Existing law regulates various practices related to debt, including its sale and collection. Existing law provides for various private rights of action, including for a patient against a psychotherapist for sexual contact, as defined and specified, a peace officer against an individual who has filed a false complaint with the officer's employing agency, as specified, and a person against another for sexual harassment, as defined and specified. This bill would require a claimant, upon receipt from the debtor of adequate documentation AND a sworn written statement that some or all of the debt being collected is coerced debt, to cease collection activities until the claimant completes a review, as defined and specified. The bill would also prohibit a person from causing another person to incur a coerced debt, and would make a person who causes another person to incur a coerced debt civilly liable to the claimant, as specified. The bill would also create a right of action that would allow a debtor to bring an action or file a cross-complaint against a claimant to establish that a particular debt, or portion thereof, is coerced debt, as specified. If a debtor establishes that a particular debt, or portion thereof, is coerced debt, the bill (1) would entitle that debtor to specified relief, including an injunction prohibiting the claimant from holding or attempting to hold the debtor personally liable on the particular debt, or portion thereof, that is coerced debt, or from enforcing a judgment related to the particular debt, or portion thereof, that is coerced debt against the debtor, and (2) would require the court to issue a judgment in favor of the claimant against any person who coerced the debtor into incurring the debt, as specified. The bill would apply only to debts incurred on or after July 1, 2023, except as specified. The bill would declare that its provisions are severable. The bill would define various terms for these purposes. This bill would require a sworn written certification to be declared under penalty of perjury. By expanding the scope of a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.