Available at: https://ssrn.com/abstract=6023874 or http://dx.doi.org/10.2139/ssrn.6023874
Abstract:
Coerced debt occurs when the abusive partner in a relationship characterized by domestic violence (DV) uses fraud, coercion, or manipulation to incur debt in the DV survivor’s name. For example, abusers may fraudulently open credit cards in their partners’ names or coerce their partners into refinancing their homes. Prior research has shown that coerced debt may be a common problem that negatively impacts DV survivors’ lives by damaging credit scores and imposing barriers to leaving abusive relationships. This manuscript presents data from the first in-depth study of coerced debt, Debt as a Control Tactic in Abusive Marriages, funded by the National Science Foundation.1 Our research team interviewed 116 recently-divorced women with coerced debt. A key research aim was to evaluate the effectiveness of legal relief for coerced debt. We analyzed participants’ experiences with divorce and studied three options under debtor-creditor law: unauthorized use in the Truth in Lending Act, the Texas statute of limitations, and bankruptcy. We found these options for legal relief for coerced debt to be highly ineffective. The failure of existing legal remedies underscores the importance of ongoing advocacy for legal reform.
This article—Ineffective Legal Relief for Coerced Debt: The Failure of Divorce and Debtor-Creditor Law to Address Debt Created by Domestic Violence—by Littwin, Adams, and Kennedy, reports on a National Science Foundation–funded study examining how coerced debt is created and, more importantly, how poorly the legal system responds to it.
The study interviewed 116 women who had recently divorced abusive husbands and identified over $12.5 million in coerced debt, with a median of roughly $22,000 per participant. The authors then examined whether commonly assumed remedies actually help:
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Divorce law fails because family courts cannot bind creditors. Even when divorce decrees “assign” debt to the abuser, survivors remain contractually liable. Indemnification provisions offer cold comfort, often increasing post-divorce conflict and risk.
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Unauthorized use doctrines under the Truth in Lending Act help only a small fraction of debts, particularly because creditors often demand police reports—something many survivors reasonably fear.
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Statutes of limitation are almost entirely illusory as relief.
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Bankruptcy, while theoretically powerful, is often inaccessible due to cost and remains unacceptable to many survivors despite awareness of its existence.
Using a framework of availability, accessibility, and acceptability, the authors find that fewer than one in ten coerced debts could realistically be resolved through existing debtor-creditor law. The article ends with a call for reform, including broader recognition of coerced debt and stronger statutory protections.
Commentary:
This is an important paper, and not just for academics. It should be required reading for domestic-violence advocates and divorce attorneys—and, frankly, for bankruptcy lawyers who don’t routinely think about IPV and coercion.
One of the article’s most striking findings is not simply that legal remedies fail, but why they fail. Survivors often do not pursue relief because the systems meant to help them are expensive, frightening, culturally incompetent, or actively dangerous. That rings true. But there is another layer here that deserves more attention: there is a deep and persistent ignorance about bankruptcy among the very professionals most likely to encounter coerced debt first.
That ignorance exists not only among laypeople—who understandably don’t know what they don’t know—but also among DV advocates and divorce lawyers. Many harbor a reflexive aversion to bankruptcy, viewing it as a moral failure, a last resort, or something that will “ruin” a survivor’s life. Some divorce attorneys are also understandably concerned that a bankruptcy might discharge unpaid attorney’s fees. The result is that bankruptcy is often never seriously discussed, even when it is the most effective—and sometimes the only—tool available.
I saw a version of this long before I ever became a bankruptcy lawyer. In 1998, fresh out of law school, I worked on an acrimonious divorce where the only contested issue was about $20,000 in joint credit-card debt. No assets. No children. Each party ultimately spent more than $3,000 in legal fees fighting over which of them would be “responsible” for debts that the credit-card companies were never going to release either of them from anyway. Even back then, they could have filed a joint bankruptcy for under $1,000 total and moved on with their lives. Instead, they paid lawyers to argue over a legal fiction.
Multiply that dynamic by coercive control, fear of retaliation, and financial abuse, and you begin to see how perverse the system becomes.
Divorce Courts, Contracts, and Bankruptcy’s Missing Seat at the Table
The authors correctly note that divorce courts cannot shift contractual liability from an abused debtor to an abuser without running headlong into constitutional problems—namely, interference with private contracts. At best, courts can order indemnification. At worst, they do nothing.
Bankruptcy, however, sits in a different constitutional posture. Congress can impair contracts, and it has done so for over two centuries. Used thoughtfully and in coordination with divorce proceedings, bankruptcy could solve problems that family courts simply cannot.
That said, there is a real tension here. Actually shifting liability to an abuser—outside of bankruptcy—may increase the risk of further abuse and may also deplete the abuser’s resources, impairing child support or alimony. A more realistic (if underexplored) option may be placing the abuser into an involuntary bankruptcy, liquidating non-exempt assets to pay creditors, and discharging the remaining debts for both parties. It’s not a silver bullet, but it is at least a tool worth discussing—something divorce courts and DV advocates rarely do.
North Carolina Law: Existing Tools and Promising Reform
North Carolina debtors already have some protection. The North Carolina Identity Theft Protection Act, N.C.G.S. § 75-60 et seq., can apply to certain coerced debts, though it is far from comprehensive.
More promising is the proposed Coerced Debt Relief Act, S. 650 (2025–2026), introduced by Mujtaba A. Mohammed. That bill would directly recognize coerced debt and provide clearer remedies. It closely tracks the National Consumer Law Center Model State Coerced Debt Law, which should be the baseline for reform nationwide.
Bankruptcy, Student Loans, Vehicle Cram-Down and Missed Opportunities
The paper’s discussion of bankruptcy is careful but incomplete. In evaluating student loan discharge, the authors do not meaningfully account for the Department of Justice’s Student Loan Adversary Proceeding (SLAP) guidance. As other scholars—including Pang and Iuliano—have shown, that guidance has substantially increased the likelihood of discharge, albeit with additional legal costs.
Facts demonstrating abuse, long-term impacts of that abuse, and coercion in taking on student loans would carry significant weight under the DOJ SLAP framework—and likely even with the most recalcitrant bankruptcy judges.
Similarly, the authors correctly note that BAPCPA curtailed vehicle cram-downs in Chapter 13. But the infamous “Hanging Paragraph” in § 1325(a)(5)(*) applies only to motor vehicles “acquired for the personal use of the debtor” within 910 days. A serious argument can be made that a vehicle acquired through coercive debt—even one driven by the survivor—was in reality acquired by, through and for the abuser. That argument has not been tested nearly enough.
Awareness Is Up. Acceptability Is Not.
One underappreciated finding in the study is that over 90% of participants were at least aware of bankruptcy as a concept. That is a quiet triumph of access to justice—and yes, a vindication of consumer bankruptcy attorneys whose advertising is often sneered at by “tall-building” lawyers, judges, and academics.
But awareness is not acceptability. Bankruptcy remained “not at all acceptable” to a majority of participants. That gap can be closed—but only if DV advocates, divorce lawyers, and bankruptcy attorneys start talking to each other, cross-training, and presenting bankruptcy not as failure, but as relief.
Lastly, while certainly accurate that access to legal solutions for coerced debt are often limited by the expense of attorneys fees (which in the consumer bankruptcy attorneys are nonetheless far, far more reasonable than nearly any other type of lawyer- as evidence by the fact that white shoe law firms never take on consumer cases), more thought and effort needs to be expended on finding solutions for this conundrum. This includes options for low-cost attorney fee only Chapter 13 cases (as allowed in the MDNC) or ideas, such as being considered by the National Bankruptcy Conference and Rep. J. Luis Correa (D-CA), for attorney fees to be paid after the filing of a Chapter 7 under court supervision (those two options are, in essence, identical), ideas for increasing access to justice while maintaining the high quality of representation (since creditors and abusers aren't ever going to ease up) is vital.
Until then, coerced debt will remain what this article so clearly shows it to be: another weapon of abuse, enabled by a fragmented and deeply siloed, limited and inaccessible legal system.
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