Survivors of violence could see debt erased as N.Y. law goes into effect

Four years into her second marriage, she didn't ask questions when her husband asked her to sign on to a credit card in her name. But then the relationship turned abusive, she said. When she left her marriage, she found herself in financial distress, with her credit score tanking hundreds of points after her former husband used the credit card and didn't make payments.

"I never used the card that was issued," Juliette, who asked CBS News not to use her full name for personal safety reasons, said.

But she now had close to $7,000 of debt in her name and no clear way to remove herself from their shared account. The bank wanted the couple to meet in person to dissolve the account, Juliette said, but she had an order of protection against her former husband and didn't want to be in the same room.

"There was an issue of safety," she said, adding she couldn't believe or understand how the bank didn't have a system in place to assist survivors of domestic abuse.

She said she fled her former husband's home with her two children to live in a roach-filled apartment in the Bronx. She had no choice, she said, after her credit score fell from around 800 to 460. No other landlord would rent to her.

Juliette has a story similar to thousands of domestic violence survivors — but states are beginning to enact legislation that could help them and other survivors of economic abuse.

Legislation in New York, which was signed into law last year and goes into effect on Wednesday, will make it the eighth state to allow relief from coerced debt for survivors of domestic violence, elder abuse and human trafficking.

Proponents of the law say that relief can be life changing. Opponents say the law can be ripe for abuse. New York's law was amended after pushback from financial institutions, narrowing the scope of relief. A spokesperson for the American Financial Services Association said the amendment closed the loopholes: "A remedy built for legitimate survivors can't double as a roadmap for cheats."

Half of domestic violence survivors are coerced into relatively small debts of up to $20,000, according to the Center for Survivor Agency and Justice, but the impact reverberates across their life.

"The rippling effects of coerced debt are quite vast," CSAJ Executive Director Erika Sussman told CBS News. Over the two decades that her organization has been advocating for economic rights for survivors, she has seen debt serve as a barrier to housing, employment, or transportation to work — all things needed for physical safety.

Like so many other survivors of economic abuse, Juli