New Law Will Protect Survivors of Domestic Violence, Older Adults from Impacts of Economic Abuse
BOSTON – Last week, Vermont Governor Phil Scott signed legislation to stop creditors from collecting on coerced debts. Coerced debt is a form of economic abuse experienced by survivors of domestic violence, human trafficking, older adults, foster children, and people with disabilities. It occurs when an abuser uses fraud, duress, intimidation, force, coercion, or identity theft to accumulate debt in the name of another person.
“We are pleased to see Governor Scott and the Vermont Legislature take action to help people who have been forced to take on debt because of abuse,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center (NCLC). “This law provides relief for people with wrongfully damaged credit histories and ends the aggressive debt collection tactics that add to the suffering caused by coerced debt.”
The new law prohibits creditors and debt collectors from holding a person responsible for coerced debt. After a victim of coerced debt provides certain documents to a creditor or debt collector supporting a claim of coerced debt, any attempts to collect the coerced debt must stop. The creditor or debt collector can only restart collection attempts after a reasonable investigation as to whether the debt was coerced or not. If a reasonable investigation shows that it was coerced debt, any lawsuit or arbitration to collect the debt must be dismissed and any judgment obtained vacated. The creditor or collection agency must also request that the consumer reporting companies remove any information relating to the coerced debt from the victim’s file and credit report.
Vermont joins eight other states that have passed legislation to safeguard people from the long-lasting impact of coerced debt. The states include: California, Connecticut, Illinois, Maine, Minnesota, Nevada, New York, and Texas.
The Vermont law is based largely on NCLC’s Model State Coerced Debt Law, which includes a complete, free-standing model law and language that states can add to existing laws. In addition, a just-published article from NCLC’s Digital Library examines the harm coerced debt inflicts on people forced to take on debt by abusers.
“Without state action, coerced debt victims will continue to face the negative economic impacts of the abuse, including damaged credit histories that can deprive a survivor of access to much-needed housing, employment, and utility resources,” said Andrea Bopp Stark, senior attorney at NCLC.
Related Resources
- NCLC Digital Library: Assisting Survivors of Domestic Violence with Coerced Debt, May 21, 2026
- Disregarded and In Debt: Understanding Barriers to Relief for Victims of Coerced Debt, Oct. 28, 2025
- Advanced Notice of Proposed Rulemaking on the Fair Credit Reporting Act (Regulation V); Identity Theft and Coerced Debt: Comments to the Consumer Financial Protection Bureau, March 7, 2025
- Model State Coerced Debt Law, May 1, 2024
- New Supreme Court Ruling–When Is a Bankruptcy Debtor on the Hook for Partner’s Fraud?, March 2, 2023
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