HOUSE BILL 313
57th legislature - STATE OF NEW MEXICO - second session, 2026
INTRODUCED BY
Reena Szczepanski
AN ACT
RELATING TO DEBT COLLECTION; ENACTING THE CIVIL RELIEF FROM COERCED DEBT ACT; PRESCRIBING DEBTOR DUTIES; REQUIRING DEBTORS TO SUBMIT A STATEMENT OF COERCED DEBT; PRESCRIBING CREDITOR DUTIES; ESTABLISHING A RIGHT OF ACTION FOR CLAIMS ARISING OUT OF COERCED DEBTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Civil Relief from Coerced Debt Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Civil Relief from Coerced Debt Act:
A. "coerced debt" means a debt or portion of debt that was incurred because of identity theft, fraud, duress, intimidation, threat, force, coercion, manipulation, undue influence, misinformation or the non-consensual use of the debtor's personal identifying information within the context of human trafficking, domestic abuse, domestic violence, sexual assault, stalking or abuse of an adult as defined in the Adult Protective Services Act. "Coerced debt" does not include debt secured by real property;
B. "creditor" means:
(1) an individual or entity to whom a debt is owed, due or asserted to be due or owed;
(2) any assignee for value;
(3) a debt collector; or
(4) a debt buyer;
C. "debt" means an obligation or alleged obligation to pay money;
D. "debtor" means an individual who owes or who is alleged to owe a debt;
E. "perpetrator of coerced debt" means a person who causes or is alleged to have caused coerced debt to be incurred by another; and
F. "qualified third party" means:
(1) a law enforcement officer;
(2) an attorney, a physician, a physician assistant, a psychiatrist, a psychologist, a social worker, a nurse, a therapist or a clinical professional counselor, all of whom are licensed to practice in any state;
(3) a person who advises or provides services to persons regarding sexual assault, domestic abuse, domestic violence, family violence, human trafficking or abuse of children, the elderly or dependent adults; or
(4) a member of the clergy of a church, religious society or denomination.
SECTION 3. [NEW MATERIAL] COERCED DEBT--DEBTOR DUTIES--STATEMENT OF COERCED DEBT.--
A. A person shall not cause another to incur coerced debt. A person who is found to be a perpetrator of coerced debt by a court of competent jurisdiction shall be civilly liable to the creditor. The perpetrator of coerced debt may also be civilly liable to a debtor to the extent that the debtor made payments or incurred costs related to the coerced debt.
B. A debtor is not liable for coerced debt and may assert that the debtor has incurred a coerced debt by providing to a creditor a written statement of coerced debt and adequate documentation. The statement of coerced debt shall:
(1) contain enough information about the debt or portion of the debt to permit a creditor to identify any accounts associated with the debt;
(2) inform the creditor that the debtor did not willingly authorize the use of the debtor's name, account or personal information for incurring the debt or portion of the debt or to claim that a debt or portion of the debt is a coerced debt;
(3) provide facts describing how the debt was incurred;
(4) include the debtor's contact information, such as a phone number, an email address, a physical address or a confidential substitute address pursuant to the Confidential Substitute Address Act for the debtor or a qualified third party the debtor designates to receive information about the coerced debt;
(5) be supported by at least one of the following:
(a) a police report that identifies the coerced debt or a portion of the debt and describes the circumstances under which the coerced debt was incurred;
(b) an order from a court setting forth findings of coerced debt;
(c) written verification on letterhead or on a form published by the department of justice from a qualified third party to whom the debtor reported the coerced debt that identifies the name, organization, address and telephone number of the qualified third party, identifies the coerced debt or a portion of the debt and attests that the debtor sought the qualified third party's assistance related to the coerced debt, abuse or exploitation pursuant to the Family Violence Protection Act or because the person is a victim of human trafficking. Provision of a written verification under this section does not waive any privilege or confidentiality between the third party and the debtor pursuant to federal, state or local law; or
(d) any other document that individually or in combination with other documents demonstrates that a person was subject to coerced debt, including text messages, email messages, phone records, voicemail messages, social media posts, letters, credit card applications or orders of protection; and
(6) be verified by signing the following attestation: "By signing below, I am certifying that the information provided on this form is true and correct to the best of my knowledge and recollection and that one or more members of my household is or has been a victim of human trafficking, domestic abuse, domestic violence, sexual assault, stalking or abuse of an adult as defined in the Adult Protective Services Act".
C. A debtor who seeks relief provided pursuant to the Civil Relief from Coerced Debt Act shall submit to the creditor a statement of coerced debt that confirms the date on which the statement was delivered and in a form prescribed by the financial institutions division of the regulation and licensing department.
SECTION 4. [NEW MATERIAL] CREDITOR DUTIES PURSUANT TO COERCED DEBT AND DEBTOR'S STATEMENT OF COERCED DEBT.--
A. A creditor shall provide to a debtor on any collection letter or written communication to the debtor, and on the creditor's website, the information necessary to submit a statement of coerced debt to that creditor by first class mail, certified mail or overnight delivery, by email or by completing an online form on the creditor's website.
B. Within ten business days of receipt of a debtor's statement of coerced debt, the creditor shall notify all consumer reporting agencies to which the creditor furnished adverse information about the debtor that the debtor disputes the adverse information.
C. If the consumer provides a statement of coerced debt and adequate documentation as required by Section 3 of the Civil Relief from Coerced Debt Act to the creditor, the creditor shall, within ten business days of receipt:
(1) suspend all attempts to collect the coerced debt from the debtor;
(2) refrain from filing any lawsuit to collect the coerced debt or, if a collection action related to the coerced debt has already been filed, dismiss the action as against the debtor unless the creditor is challenging that the debt is not coerced debt in that action;
(3) cease all garnishment of funds from the debtor;
(4) return to the debtor any payments that were made by the debtor or received as part of a garnishment of funds from the debtor on the coerced debt;
(5) notify the debtor that the creditor is suspending all attempts to collect the debt from the debtor based on the debtor's claim of coerced debt. The notice shall be provided to the debtor using the debtor's preferred contact method as specified in Section 3 of the Civil Relief from Coerced Debt Act. The creditor shall inform the debtor of the option to receive the notice in writing;
(6) contact all consumer reporting agencies to which the creditor furnished information about the debtor and the coerced debt and request that the agencies delete the information; and
(7) refrain from selling the debt or transferring the debt for consideration. If the creditor does not own the debt and is collecting the debt for another, then the creditor shall notify the owner of the debt that the creditor has suspended collection activities against the debtor.
D. Creditors shall not require debtors to submit a police report or other court document or record.
E. If a debtor provides to a creditor a statement of coerced debt that includes some but not all the information required of a statement of coerced debt or provides an oral statement of coerced debt without adequate documentation, the creditor shall notify the debtor within fourteen business days, using the debtor's preferred contact method, of the additional information required to complete the statement of coerced debt and of the adequate documentation requirement. If the creditor provides this notice orally, the creditor shall inform the debtor of the option to receive the notice in writing.
F. A creditor who provides a debtor with a model form provided by the financial institutions division of the regulation and licensing department shall be deemed to have met notice requirements provided for in Subsection A of this section.
G. All written notices under this section shall be provided to all debtors in both English and Spanish. If the creditor provides oral interpretation services or otherwise communicates with the debtor in any language other than English, the creditor shall provide the notice, orally or in writing, required under this subsection to the debtor in the debtor's preferred language.
H. In connection with any communication related to a debtor's statement of coerced debt, a creditor:
(1) shall only use the contact information that the debtor provides in the statement of coerced debt to contact the debtor and shall not use any other contact information; and
(2) shall maintain confidential the information of a debtor alleging coerced debt and shall not provide the contact information of the debtor or a copy of the statement of coerced debt or supporting information to an alleged perpetrator of coerced debt or another person but may summarize the allegations about how the coerced debt was incurred in order to collect the debt from the perpetrator.
SECTION 5. [NEW MATERIAL] DUTY OF THE FINANCIAL INSTITUTIONS DIVISION OF THE REGULATION AND LICENSING DEPARTMENT.--Not later than one hundred eighty days after the effective date of the Civil Relief from Coerced Debt Act, the financial institutions division of the regulation and licensing department shall publish a model form for creditors to provide to debtors for use in submitting a statement of coerced debt to the creditor in English and Spanish.
SECTION 6. [NEW MATERIAL] CIVIL REMEDIES.--
A. A debtor may raise as a defense in any forum and by any allowable procedure that a particular debt, or portion thereof, is coerced debt.
B. A debtor establishes a prima facie case that a debt is coerced debt by providing a statement of coerced debt that meets the requirements of Subsection B of Section 3 of the Civil Relief from Coerced Debt Act. If the creditor has a good-faith basis to believe that the debt is not coerced debt, the creditor may seek a court order in a court of competent jurisdiction declaring the debt is not a coerced debt. In such a suit, the creditor has the burden to disprove that the debt is coerced debt.
C. A creditor may use all legal rights and remedies to collect a coerced debt from a perpetrator of coerced debt.
D. In any court action, the presiding court shall take appropriate steps necessary to protect the debtor or an immediate family member of the debtor from an alleged perpetrator of coerced debt by sealing court records, redacting personally identifiable information about the debtor and any immediate family member of the debtor and directing that any deposition or evidentiary hearing be conducted remotely.
E. Any creditor who fails to comply with any provision of Section 4 of the Civil Relief from Coerced Debt Act is liable to the debtor in an amount equal to the sum of:
(1) all actual damages sustained by the debtor as a result of such noncompliance;
(2) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding five thousand dollars ($5,000) per violation indexed annually for inflation or, in the case of a class action, the amount for each named plaintiff that could be recovered under Paragraph (1) of this subsection and an amount that the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of five hundred thousand dollars ($500,000) indexed annually for inflation or one percent of the net worth of the debt collector;
(3) court costs and reasonable attorney fees as determined by the court; and
(4) punitive damages if the court finds that a creditor's noncompliance was willful.
F. The provisions of the Civil Relief from Coerced Debt Act apply to lawsuits filed in this state, regardless of whether a related contract provides that the law of another state is chosen.
SECTION 7. [NEW MATERIAL] APPLICABILITY.--
A. The Civil Relief from Coerced Debt Act:
(1) applies to a creditor who attempts to evade that act's applicability by any device, subterfuge or pretense; and
(2) does not:
(a) apply to debt secured by real property; or
(b) diminish the rights of a creditor to recover payment for a coerced debt from a perpetrator of coerced debt.
B. The Civil Relief from Coerced Debt Act does not reduce or eliminate any other rights or defenses available to a debtor or creditor. In the event of an inconsistency between debtor-creditor laws and that act, that act prevails to the extent of the inconsistency.
C. An agreement between a debtor and any other person shall not contain a provision that constitutes a waiver of any right conferred or cause of action created by the Civil Relief from Coerced Debt Act, and any such waiver is void.
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