Finds that survivors of domestic violence and the children of domestic violence survivors undergo multiple forms of abuses, including monetary abuse, and that survivors of domestic violence need multiple pathways to remedy coerced debt and to repair credit reports. Declares that the public policy of this State to provide remedies for economic abuse against domestic violence survivors.

Enacts Chapter 1H of the General Statutes, the North Carolina Coerced Debt Relief Act. Defines claimant as person or an entity who has or purports to have a claim against a debtor arising from coerced debt, or that person's or entity's successor or assignee. This definition includes, but is not limited to, a debt collector or a debt buyer. The term does not include a person who caused the claim to arise through duress, intimidation, threat of force, force, fraud, or undue influence perpetrated against the debtor.

Defines coerced debt as a particular debt, or portion thereof, for personal, family, or household use in the name of a debtor who is a victim of domestic violence as defined in GS 50B-1, or a victim of domestic abuse as defined in GS 14-32.3(a), or a current or former child in foster care as defined in GS 131D-10.2, incurred as a result of duress, intimidation, threat of force, force, or undue influence.

Defines adequate documentation as documentation that identifies a particular debt, or portion thereof, as coerced debt, describes the circumstances under which the coerced debt was incurred, and takes the form of any of the following: (1) a police report; (2) a Federal Trade Commission identity theft report identifying a particular debt, or portion thereof, as coerced, but not as identity theft; (3) court order issued under Chapter 50 or Chapter 50B of the General Statutes relating to domestic violence, Chapter 7B of the General  Statutes relating to an abused, neglected, or dependent juvenile, or GS 108A-106 relating to disabled adults; (4) a sworn written certification from a qualified third-party professional based on information they received while acting in a professional capacity. This documentation must be signed by a qualified third-party professional and display the letterhead, address, and telephone number of the office, institution, center, or organization, as appropriate, that engages or employs, whether financially compensated or not, the qualified third-party professional, or, if the qualified third-party  professional is self-employed, the documentation shall display the letterhead, address, and telephone number of the qualified third-party professional.

Defines debtor as the person who owes or is otherwise liable for coerced debt.

Also defines abuse, claim, fraud, immediate family member, person, qualified third-party professional, and sworn written certification.

Prohibits a person from causing another person to incur a coerced debt. Specifies that a person who causes another person to incur a coerced debt will be civilly liable to the claimant (i.e., creditor) for the amount of the debt, or portion of the debt to be determined by a court, plus the claimant’s attorneys’ fees or costs. Specifies that GS 1H does not apply to secured debts nor does it authorize a court to order a claimant to refund any money already paid on a debt that is found to be coerced. Further specifies that GS 1H does not diminish the rights of a claimant to recover payment for a coerced debt or debts from the person who coerced a debtor into incurring that debt. Clarifies that GS 1H does not reduce or eliminate any other rights or defenses available to a debtor or claimant pursuant to any other law.

Sets forth the following process for debtor who alleges a coerced debt to seek review of the debt by the claimant claiming the debt. Requires a claimant to stop collection until it concludes review after receiving adequate documentation and the debtor’s sworn written certification that a particular debt, or portion thereof, is a coerced debt. Requires a claimant to notify any consumer credit reporting agencies to which the debt has been reported, that the debt is in dispute within 10 business days of receiving the statement and adequate documentation. Requires claimant to provide written instructions to a debtor on the form and documentation required to allege a coerced debt if the information is provided orally or is incomplete. 

Requires the claimant to initiate a review considering all of the information provided by the debtor and other information available to the claimant in its file. Within 30 days of completing the review, the claimant must notify the debtor in writing of the claimant's determination and the good-faith basis for that determination. The claimant must not not recommence collection activities until the debtor has been notified in writing of the good-faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt. Provides that no inference or presumption that a debt is valid or invalid, or about the liability of the debtor for the debt, will arise if the claimant decides after its review to cease or recommence collection activities. Specifies that the exercise or nonexercised of rights under GS 1H is not a waiver of any other right or defense of the debtor or claimant.

Requires a claimant who has ceased collection activities and does not recommence those activities to do the following: (1) if they have furnished adverse information to a consumer credit reporting agency regarding the debtor and a particular debt, or portion thereof, notify the agency to delete that information no later than 10 business days after making its determination and (2) if the claimant is a debt collector, notify the creditor no later than 10 business days after making its determination that collection activities have been terminated based upon the debtor's assertion that a particular debt, or portion thereof, being collected is coerced debt.

Requires a debtor to provide notice to a claimant if they are going to file a lawsuit or other action against the claimant in connection with the coerced debt 30 days before filing suit. Specifies rules relating to that notice. Prevents a debtor from filing an action against a claimant if the claimant informs the debtor that it has ceased all efforts to collect on the particular debt, or portion thereof, identified in the debtor’s pre-suit notice, discussed above, and the debtor receives a written notice of cessation before the expiration of the 30-day time period discussed above. Sets the following as preconditions to a lawsuit against a claimant brought by a debtor in connection with a coerced debt: (1) expiration of the 30-day period and the collection activities have not ceased or the debtor has not received written notice that collection activities have ceased; or (2) the debtor receives written notice of the claimant’s good-faith determination that the information does not establish that the particular debt, or portion thereof, is coerced debt.

Authorizes a claimant to bring suit against a claimant to establish that a particular debt, or portion thereof, is a coerced debt, both by filing directly or by cross-complaint in an action brought by the claimant against the debtor to recover the debt.  If the action is initiated by cross-complaint, the pre-suit notice discussed above is not required. Requires the debtor to plead with particularity and to attach the documents originally provided to the creditor (discussed above) to the complaint. Specifies that if the debtor establishes by a preponderance of the evidence that the debt is a coerced debt, they are entitled to the following relief: (1) a declaratory judgment that the debtor is not obligated to the claimant on the particular debt, or portion thereof, that is coerced debt; (2) 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, and prohibiting the claimant from enforcing a judgment related to the particular debt, or portion thereof, that is coerced debt against the debtor; (3) an order dismissing any cause of action brought by the claimant to enforce or collect on the particular debt from the debtor or, if only a portion of the debt is established as coerced debt, an order directing that the complaint and judgment, if any, in the action be amended to reflect only the portion of the particular debt that is not coerced debt. Authorizes the court to enter judgment against the person who coerced the debt if the debt is found to be coerced debt and that person is within the jurisdiction of the court and the evidence supports that finding. Directs the court to take steps to prevent abuse of the debtor or an immediate family member, including sealing court records, redacting personally identifiable information, and directing that any deposition or evidentiary hearing be conducted remotely.

Specifies that a debtor who knowingly files false motions, pleadings, or other frivolous or dilatory tactics will be liable for the claimant’s attorneys’ fees and costs in defending the lawsuit. Allows for a claimant to move for written findings regarding evidence related to the person who caused the coerced debt to be incurred.

Specifies that a claimant has standing to collect a debt by any lawful means from a person who coerced a debt when it has been determined that a debt is a coerced debt. Specifies statute of limitations for that action. Contains severability clause. Specifies that Chapter 1H applies only to debts incurred on or after July 1, 2023, except that a debtor may file a cross-complaint in an action filed by a claimant to collect a debt incurred prior to July 1, 2023, unless a final judgment has been entered in that action.

Effective July 1, 2023.