Minnesota Legislature
HF 2413
1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/20/2023 03:55pm
Current Version - 1st Engrossment
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A bill for an act
relating to commerce; providing remedies to debtors with coerced debt; proposing
coding for new law in Minnesota Statutes, chapter 332.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[332.71] DEFINITIONS.
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new text begin Subdivision 1. new text end
new text begin Scope. new text end
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For the purposes of sections 332.71 to 332.75, the definitions in
this section have the meanings given them.
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new text begin Subd. 2. new text end
new text begin Coerced debt. new text end
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(a) "Coerced debt" means all or a portion of debt in a debtor's
name that has been incurred as a result of:
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(1) the use of the debtor's personal information without the debtor's knowledge,
authorization, or consent;
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(2) the use or threat of force, intimidation, undue influence, harassment, fraud, deception,
coercion, or other similar means against the debtor; or
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(3) economic abuse perpetrated against the debtor.
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(b) Coerced debt does not include secured debt.
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new text begin Subd. 3. new text end
new text begin Creditor. new text end
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"Creditor" means a person, or the person's successor, assignee, or
agent, claiming to own or have the right to collect a debt owed by the debtor.
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new text begin Subd. 4. new text end
new text begin Debtor. new text end
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"Debtor" means a person who (1) is a victim of domestic abuse,
harassment, or sex or labor trafficking, and (2) owes coerced debt.
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new text begin Subd. 5. new text end
new text begin Documentation. new text end
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"Documentation" means a writing that identifies a debt or a
portion of a debt as coerced debt, describes the circumstances under which the coerced debt
was incurred, and takes the form of:
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(1) a police report;
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(2) a Federal Trade Commission identity theft report;
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(3) an order in a dissolution proceeding under chapter 518 that declares that one or more
debts are coerced; or
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(4) a sworn written certification.
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new text begin Subd. 6. new text end
new text begin Domestic abuse. new text end
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"Domestic abuse" has the meaning given in section 518B.01,
subdivision 2.
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new text begin Subd. 7. new text end
new text begin Economic abuse. new text end
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"Economic abuse" means behavior in the context of a domestic
relationship that controls, restrains, restricts, impairs, or interferes with the ability of a victim
of domestic abuse, harassment, or sex or labor trafficking to acquire, use, or maintain
economic resources, including but not limited to:
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(1) withholding or restricting access to, or the acquisition of, money, assets, credit, or
financial information;
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(2) interfering with the victim's ability to work and earn wages; or
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(3) exerting undue influence over a person's financial and economic behavior or decisions.
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new text begin Subd. 8. new text end
new text begin Harassment. new text end
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"Harassment" has the meaning given in section 609.748.
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new text begin Subd. 9. new text end
new text begin Labor trafficking. new text end
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"Labor trafficking" has the meaning given in section 609.281,
subdivision 5.
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new text begin Subd. 10. new text end
new text begin Qualified third-party professional. new text end
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"Qualified third-party professional"
means:
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(1) a domestic abuse advocate, as defined under section 595.02, subdivision 1, paragraph
(l);
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(2) a sexual assault counselor, as defined under section 595.02, subdivision 1, paragraph
(k);
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(3) a licensed health care provider, mental health care provider, social worker, or marriage
and family therapist; or
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(4) a nonprofit organization in Minnesota that provides direct assistance to victims of
domestic abuse, sexual assault, or sex or labor trafficking.
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new text begin Subd. 11. new text end
new text begin Sex trafficking. new text end
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"Sex trafficking" has the meaning given in section 609.321,
subdivision 7a.
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new text begin Subd. 12. new text end
new text begin Sworn written certification. new text end
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"Sworn written certification" means a statement
by a qualified third-party professional in the following form:
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CERTIFICATION OF QUALIFIED THIRD-PARTY PROFESSIONAL
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I, .................... (name of qualified third-party professional), do hereby certify under
penalty of perjury as follows:
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1. I am a licensed health care provider, mental health care provider, social worker,
marriage and family therapist, domestic abuse advocate, as that term is defined in Minnesota
Statutes, section 595.02, subdivision 1, paragraph (l), or sexual assault counselor, as that
term is defined in Minnesota Statutes, section 595.02, subdivision 1, paragraph (k), or a
staff member of a nonprofit organization that provides direct assistance to victims of domestic
abuse, sexual assault, or sex or labor trafficking, who has had in-person contact or
face-to-face contact through an electronic medium with .................... (name of debtor).
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2. Based on my professional interactions with the debtor and information presented to
me in my professional capacity, I have a reasonable basis to believe .................... (name of
debtor) is a victim of domestic abuse, harassment, sex trafficking or labor trafficking and
has incurred all or a portion of debt that is coerced debt, as that term is defined in Minnesota
Statutes, section 332.71, subdivision 2.
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3. Based on my professional interactions with the debtor and on information presented
to me, I have reason to believe that the circumstances under which the coerced debt was
incurred are as follows:
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4. The following debts or portions of the debts have been identified to me as coerced:
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I attest that the foregoing is true and correct.
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(Printed name of qualified third party)
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(Signature of qualified third party)
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(Business address and business telephone)
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(Date)
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Sec. 2.
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[332.72] COERCED DEBT PROHIBITED.
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A person is prohibited from causing another person to incur coerced debt.
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Sec. 3.
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[332.73] NOTICE TO CREDITOR OF COERCED DEBT.
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new text begin Subdivision 1. new text end
new text begin Notification. new text end
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(a) Before taking an affirmative action under section 332.74,
a debtor must, by certified mail, notify a creditor that the debt or a portion of a debt on
which the creditor demands payment is coerced debt and request that the creditor cease all
collection activity on the coerced debt. The notification and request must be in writing and
include documentation. The creditor, within 30 days of the date the notification and request
is received, must notify the debtor in writing of the creditor's decision to either immediately
cease all collection activity or continue to pursue collection.
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(b) If a creditor ceases collection but subsequently decides to resume collection activity,
the creditor must notify the debtor ten days prior to the date the collection activity resumes.
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(c) A debtor must not proceed with an action under section 332.74 until the 30-day
period provided under paragraph (a) has expired.
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new text begin Subd. 2. new text end
new text begin Sale or assignment of coerced debt. new text end
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A creditor may sell or assign a debt to
another party if the creditor selling or assigning the debt includes notification to the buyer
or assignee that the debtor has asserted the debt is coerced debt.
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new text begin Subd. 3. new text end
new text begin No inference upon cessation of collection activity. new text end
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The fact that a creditor
ceases collection activity under this section or section 332.74 does not create an inference
or presumption regarding the validity or invalidity of a debt for which a debtor is liable or
not liable. The exercise or nonexercise of rights under this section is not a waiver of any
other debtor or creditor rights or defenses.
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Sec. 4.
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[332.74] DEBTOR REMEDIES.
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new text begin Subdivision 1. new text end
new text begin Right to petition for declaration and injunction. new text end
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A debtor alleging
violation of section 332.72 may petition for equitable relief in the district court in the county
where the debtor lives or where the coerced debt was incurred. The petition must include:
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(1) the notice to the creditor required under section 332.73, subdivision 1;
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(2) consistent with Rule 11 of the Minnesota Rules of General Practice, information
identifying (i) the account or accounts associated with the coerced debt, and (ii) the person
in whose name the debt was incurred; and
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(3) the identity and, if known, contact information of the person who caused the debtor
to incur coerced debt, unless the debtor signs a sworn statement that disclosing the
information is likely to result in domestic abuse or other harm to the debtor, the debtor's
children, parents, other relatives, or a family pet.
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new text begin Subd. 2. new text end
new text begin Procedural safeguards. new text end
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The court must take appropriate steps necessary to
prevent abuse of the debtor or to the debtor, the debtor's children, parents, other relatives,
or a family pet. For purposes of this subdivision, appropriate steps include but are not limited
to sealing the file, marking the file as confidential, redacting personally identifiable
information about the debtor, and directing that any deposition or evidentiary hearing be
conducted remotely.
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new text begin Subd. 3. new text end
new text begin Relief. new text end
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(a) If a debtor shows by a preponderance of the evidence that the debtor
has been aggrieved by a violation of section 332.72 and the debtor has incurred coerced
debt, the debtor is entitled to one or more of the following:
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(1) a declaratory judgment that the debt or portion of a debt is coerced debt;
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(2) an injunction prohibiting the creditor from (i) holding or attempting to hold the debtor
liable for the debt or portion of a debt, or (ii) enforcing a judgment related to the coerced
debt; and
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(3) an order dismissing any cause of action brought by the creditor to enforce or collect
the coerced debt from the debtor or, if only a portion of the debt is established as coerced
debt, an order directing that the judgment, if any, in the action be amended to reflect only
the portion of the debt that is not coerced debt.
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(b) If the court orders relief for the debtor under paragraph (a), the court, after the
creditor's motion has been served by United States mail to the last known address of the
person who violated section 332.72, shall issue a judgment in favor of the creditor against
the person in the amount of the debt or a portion thereof.
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(c) This subdivision applies regardless of the judicial district in which the creditor's
action or the debtor's petition was filed.
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new text begin Subd. 4. new text end
new text begin Affirmative defense. new text end
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In an action against a debtor to satisfy a debt, it is an
affirmative defense that the debtor incurred coerced debt.
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new text begin Subd. 5. new text end
new text begin Burden. new text end
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In any affirmative action taken under subdivision 1 or any affirmative
defense asserted in subdivision 3, the debtor bears the burden to show by a preponderance
of the evidence that the debtor incurred coerced debt. There is a presumption that the debtor
has incurred coerced debt if the person alleged to have caused the debtor to incur the coerced
debt has been criminally convicted, entered a guilty plea, or entered an Alford plea under
section 609.27, 609.282, 609.322, or 609.527.
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new text begin Subd. 6. new text end
new text begin Statute of limitations tolled. new text end
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(a) The statute of limitations under section 541.05
is tolled during the pendency of a proceeding instituted under this section.
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(b) A creditor is prohibited from filing a collection action regarding a debt that is the
subject of a proceeding instituted under this section while the proceeding is pending.
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(c) If a debtor commences a proceeding under this section while a collection action is
pending against the debtor regarding a debt that is subject to the proceeding, the court must
immediately stay the collection action pending the disposition of the proceeding under this
section.
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Sec. 5.
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[332.75] CREDITOR REMEDIES.
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Nothing in sections 332.71 to 332.74 diminishes the rights of a creditor to seek payment
recovery for a coerced debt from the person who caused the debtor to incur the coerced
debt.
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Sec. 6. new text begin EFFECTIVE DATE.
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Sections 1 to 5 are effective January 1, 2024, and apply to all debts incurred on or after
that date.
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