New law could help Texans forced into taking on debt

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AUSTIN (Nexstar) — Starting this September, victims of coerced debt will be able to get a police report for identity theft. 

“Prior to the passage of this bill, the way that the identity theft statute defined identity theft had to be without a person’s consent,” said Carla Sanchez-Adams, managing attorney with Texas Rio Grande Legal Aid. “So consent was with knowledge, permission, but it didn’t take into account scenarios when somebody was either under threat of violence or under duress or coercion by somebody else.” 

The term “coerced debt” was coined by University of Texas at Austin School of Law Professor Angela Littwin, who specializes in bankruptcy, consumer and commercial law. In her 2012 publication titled “Coerced Debt: The Role of Consumer Credit in Domestic Violence,” she wrote that this issue is seen in a variety of ways. 

“It ranges from abusers taking out credit cards in their partners’ names without their knowledge, to forcing victims to obtain loans for the abuser, to tricking victims into signing quitclaim deeds for the family home,” she wrote. 

According to statistics cited in a report by Texas Appleseed, in the first six months of 2018, 30 percent of calls made to the National Domestic Violence Hotline by Texans reported economic or financial abuse. 

House Bill 2697, by Rep. Morgan Meyer, R-Dallas, and sponsored by Sen. Judith Zaffirini, D-Laredo, was recently signed into law by Gov. Greg Abbott. It expands identity theft to include cases where someone obtains, possesses, transfers or uses identifying information of another person without their “effective consent.”

With a police report, Sanchez-Adams says there is hope victims can get protections and remedies available to traditional identity theft victims. It’s a necessary component in getting a consumer reporting agency to block the reporting of information caused by alleged identity theft, she said. 

Cheryl — who didn’t want to use her last name for privacy purposes — says she didn’t know her ex-husband had opened nearly 20 credit cards, either solely under her name or where her name was used a co-signer. She describes it as “waking up and basically finding out I was bankrupt without realizing it.” 

At the time, she was preparing to go through a divorce and was also getting ready to go back to school. 

“I ordered the credit reports to get ready to get student loans and stuff,” she said. “All of a sudden, what I thought would be three or four pages came back as inch-thick files from each of the three credit reporting agencies.” 

Cheryl says she always stayed away from credit cards, knowing the complications that could arise by having one. 

“I was the type of person where if I didn’t have the money for it, I’d save the money for it.”

After she saw the credit cards with her name attached to the account, she tried seeking help but would constantly face roadblocks. 

“When you feel like you’re the only person that’s dealing with it, that takes its own toll,” she said. 

Sanchez-Adams, who was Cheryl’s attorney and has worked with several clients on this issue, says there is a growing dependence on consumer reporting and the information contained on a consumer report can impact many areas of a person’s life. A consumer report often contains credit reports and other public data. 

“All of that impacts a survivor,” she added. “If they have debt that was taken out without their knowledge or permission or under coercion, then they have really bad credit. That can impact not just getting a loan, getting a car or transportation that may be sorely needed, but also housing, employment. It can serve as a barrier to all of those things, even utilities or cell phones.” 

Though this change will only apply to cases that take place starting this September, Cheryl says she hopes this will provide survivors support when they find themselves in similar situations.  

“It’s not just men that do this to women,” she said. “It’s parents that do this to kids. It’s wives that do this to husbands. It’s all different situations. Anybody can experience this.” 

“You don’t feel like you have to drown by yourself,” she added. 

Cheryl is now scheduled to graduate with a degree in psychology in May of 2020. 

The Texas Coalition on Coerced Debt, comprised of Texas Rio Grande Legal Aid, the Texas Council on Family Violence, Texas Appleseed and Texas Legal Services Center, is working on an interactive toolkit scheduled to roll out this fall. Sanchez-Adams says it will help people identify whether they’ve been a victim of coerced debt.

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