How to Recognize Coerced Debt

Domestic violence survivors face numerous challenges to rebuild their lives. Recent studies have shown that even after personal safety challenges are addressed, economic abuse, such as coerced debt and , remains an obstacle.

Coerced debt can have a severe impact on a survivor’s financial status. Credit ratings are destroyed by coerced debt, making it hard for survivors to obtain future loans, rent apartments, and even find employment.

Here are a few ways to recognize coerced debt in your relationships or with friends and family.

What is coerced debt?

Coerced debt is a form of financial abuse and refers to any non-consensual, credit-related transactions demanded or coerced by an abusive partner.

According to one U.K.-based study, 1 in 10 women had debts put in her name and feared saying no to their partner. The Center for Survivor Agency & Justice notes in the first in-depth look at coerced debt that, of 188 divorcing women in Texas, 80% experienced economic abuse and 67% having coerced debt. The median amount of coerced debt a survivor had was $23,248, and the amount of coerced debt held by all women survivors totaled more than $13.6 Million.

Coerced debt is sometimes a form of identity theft and can be obtained through deceit, manipulation, or pressure.

Who is more at risk of coerced debt?

According to a study, Addressing Coerced Debt In Divorce: Study Findings and Implications For Attorneys and Advocates, by the Center for Survivor Agency and Justice, survivors of color or on the margins had more coerced debt (80% vs 63% to their white counterparts) with higher amounts than the average survivor ($24,565), and were more likely to have personal loans (19% vs 9% to their White counterparts). Additionally, survivors of colors or on the margins benefited more from deleted coerced debt from their credit scores as they were less likely to be able to pay off the coerced debt by the time of divorce (70% vs 54%) than their White counterparts.

How to Recognize Coerced Debt
How to Recognize Coerced Debt

Survivors with lower incomes were also significantly less likely to be able to pay off coerced debt by the time of divorce, compared to those with higher incomes (64% vs 43%).

Recognizing the signs of coerced debt

There are three methods that abusive partners use to place debt in the names of their partners. Remember, coerced debt uses a partner’s credit for one’s own advantage. It often occurs alongside other financial abuse tactics.

Pressure to take on debt

An abusive partner can create or add to debt in a partner’s name by taking out loans, using credit cards, or putting household bills in their partners’ name, among other types of debt. Examples of situations that an abusive partner may use to pressure their partner to take on debt includes:

  • Applying for major credit cards, obtaining loans, or opening other financial accounts in the survivor’s name.
  • Forcing a survivor to obtain loans such as mortgages, vehicle loans, payday loans, or even student loans.
  • Forcing or asking a survivor to sign financial documents without them fully understanding the terms or conditions of the debt.
  • Threatening to physically harm or convince the survivor to make purchases or transactions that could cause harm to their credit history including household bills such as gas, electric, cable, internet, or phone bills.
  • Refinancing a home mortgage or reinstating an apartment lease without the survivor’s knowledge.

Safety planning around coerced debt

To protect yourself financially, it is important to always do your research and fully understand the terms of any loan or financial agreement before signing. Make sure to carefully read all documents and ask questions if anything is unclear. If you feel pressured or uncomfortable, trust your instincts and walk away from the situation. It is also important to seek help from a trusted financial advisor or legal counsel if you are unsure about the legitimacy of the financial agreement. Here are some additional ways you can protect yourself from coerced debt:

Prepare a safety plan
  • You might not be ready to leave your partner yet, but you can make a plan in case you eventually decide to go. Consider these details:
    • If you have children or pets, think about where they’ll stay.
    • Make copies of important documents and keys.
    • Get a rough idea of how much money you’ll need to get away, even if it’s just a few dollars for a bus ride to a local shelter.

Write down or memorize important phone numbers.

Document coerced debt

Documenting situations and examples of coerced debt (in every form that it occurs) can help you provide proof of your partner’s pattern of behavior. Documentation of financial abuse is critical when trying to resolve coerced debt with card issuers, other creditors, banks, credit bureaus, mortgage servicers, and others.  Examples of useful documentation include:

  • Letters from a domestic violence shelter, advocate, health care provider, and/or mental health care provider, about the circumstances of abuse.
  • Legal documents, such as a restraining order, proof of criminal proceeding, a divorce decree, separation agreement, or other court orders.
  • Essential documents such as your Social Security card, health insurance card, passport, and children’s documentation if you have it.
Change your email addresses and passwords

Nobody should ever feel pressured or forced to share their passwords if they don’t want to, and everyone should always have the right to as much digital privacy as they want. If you can safely do so, change your passwords. Be mindful that this sometimes sends a “flag message” to the email accounts listed in their system. If your partner has access to those, it could give them a heads up that you’re taking measures for your safety. If you’re concerned that your partner will be made aware of the change, or if you are concerned that this could escalate your level of danger, you may want to create new accounts that are not linked to the old ones that you can move your business to discreetly.

Protect your bank accounts

Monitor and protect your bank accounts by looking for any transactions that you didn’t make. If you feel that it is safe to do so, report suspicious transactions. If you do believe that your accounts are being accessed by your partner and it does not seem safe to address this, consider opening a new account that they are not aware of and have the information sent to a safe email and location that they will not be able to access (e.g., work, PO box, trusted family, or friend).

Remember, coerced debt refers to non-consensual, credit-related transactions in the context of an abusive relationship.

Help is available.

If you have been forced to make transactions that led you into debt, or if you have had debts fraudulently built up in your name, you could be experiencing coerced debt. Our advocates are available 24/7 to talk, chat, or text with you about your concerns. Call us at 1-800-799-SAFE (7233) or chat at thehotline.org.