N.Y.
General Business Law Section 604-CC
Coerced debt cause of action and affirmative defense
1.
A person shall not cause another person to incur a coerced debt. A person who causes another person to incur a coerced debt in violation of this subdivision shall be civilly liable to the creditor, and/or the debtor in whose name such coerced debt was incurred if such debtor has already paid all or part of such coerced debt, for the amount of such debt, or portion thereof, determined by the court to be a coerced debt, as well as such creditor’s and/or debtor’s costs and attorneys’ fees reasonably incurred in bringing the action. An action under this subdivision shall be commenced within three years of the later of:(a)
the creditor’s determination that all or part of such debt is coerced debt; or(b)
a court’s determination that all or part of such debt is coerced debt.2.
(a) 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 Civil Practice Law & Rules Law § 1001 (Necessary joinder of parties)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 following conditions are satisfied:(i)
(1) the debtor provides by first class mail with certification of mailing, certified mail, overnight delivery, or other method that allows for confirmation of the date of mailing, the notice of coerced debt or subsequent notice of coerced debt under § 604-BB (Notice of coerced debt)section six hundred four-bb of this article, provided, however, that receipt of the notice of coerced debt shall not be a condition to bringing such action if it is sent in a properly addressed envelope; and (2) the thirty-day period under paragraph (b) of subdivision three of § 604-BB (Notice of coerced debt)section six hundred four-bb of this article has expired and the debtor has not received written notice that collection activities have ceased; or(ii)
the debtor receives a written determination under paragraph (c) of subdivision three of § 604-BB (Notice of coerced debt)section six hundred four-bb of this article that the particular disputed debt is not coerced debt.(b)
The submission of a request for reconsideration under subdivision four of § 604-BB (Notice of coerced debt)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 is not a condition to commencing an action under this subdivision.3.
In an action under subdivision two 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 § 604-BB (Notice of coerced debt)section six hundred four-bb of this article to any complaint.4.
A debtor who establishes by a preponderance of the evidence in an action pursuant to subdivision two of this section that a debt or portion of a debt asserted to be owed to the creditor is coerced debt shall 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.5.
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 § 604-BB (Notice of coerced debt)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 § 604-BB (Notice of coerced debt)section six hundred four-bb of this article shall be annexed to the debtor’s answer. A debtor who prevails on an affirmative defense of coerced debt shall be entitled to the costs and attorneys’ fees reasonably incurred in defending against the action. Notwithstanding Civil Practice Law & Rules Law § 1001 (Necessary joinder of parties)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.6.
An action pursuant to subdivision two 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 seven of § 604-BB (Notice of coerced debt)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.7.
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.8.
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.9.
For debts secured by real or personal property, the private cause of action and affirmative defense authorized by this section shall affect only the debtor’s liability for any deficiency after the foreclosure, repossession, or surrender and disposition of the subject collateral.10.
Whenever there shall be a violation of this section, an application may be made by the attorney general in the name of the people of the state of New York to a court or justice having jurisdiction to issue an injunction, and upon notice to the defendant of not less than five days, to enjoin and restrain the continuance of such violations. If it shall appear to the satisfaction of the court or justice that the defendant has, in fact, violated this section, an injunction may be issued by such court or justice, enjoining or restraining any violation, without requiring proof that any person has, in fact, been injured or damaged thereby. In any such proceeding the court may make allowances to the attorney general as provided in Civil Practice Law & Rules Law § 8303 (Additional allowance in the discretion of the court)section eighty-three hundred three of the civil practice law and rules, and may make direct restitution. In connection with any such proposed application, the attorney general is authorized to take proof and make a determination of the relevant facts and to issue subpoenas in accordance with the civil practice law and rules. Whenever the court shall determine that a violation of this section has occurred, the court may impose a civil penalty for each violation up to five thousand dollars. * NB Effective March 19, 2026
Source:
Section 604-CC — Coerced debt cause of action and affirmative defense, https://www.nysenate.gov/legislation/laws/GBS/604-CC (updated Dec. 26, 2025; accessed Feb. 7, 2026).
