NEW LAW UPDATE: California Family Code § 6342.5 addresses financial abuse in domestic violence cases
There is a new statute relating to use, possession, and control of real or personal property and debts incurred as result of domestic violence, effective as of January 1, 2021 and operative as of January 1, 2022. It authorizes courts to make a finding in a domestic violence restraining order that specific debts were incurred as a result of domestic violence, such as through identity theft or coercion. It is a powerful tool in holding abusers responsible for financial abuse of their partners.
In this statute, the Court has the discretion to make an order to determine the use, possession, and control of real or personal property of the parties when the order is in effect and order the payment of any liens or encumbrances coming due during that time. The Court as part of that order may include a finding that the debts were incurred as a result of domestic violence and without the consent of the party, as may be evidenced by violation of acts like, but not limited to, crimes perpetrated under Section 530.5 of the Penal Code. The priority of liens or other security interests are not impacted.
The statute has its genesis in AB 2517 promulgated by Assemblymember Todd Gloria (D-San Diego).
As described by the Legislative Counsel's Digest, the statute adds to the existing domestic violence statutes:
Existing law enacts procedures to prevent acts of domestic violence, abuse, and sexual abuse and authorizes a court to issue an ex parte order determining the temporary use, possession, and control of real or personal property of the parties and the payment of any liens or encumbrances coming due during the period the order is in effect. Existing law also authorizes a court to issue orders based on ex parte orders, including the above-described order, after notice and a hearing.
The need for the statute is great. As described by the Senate Rules Committee in its report
preceding its vote on July 30, 2020:
According to Katie Ray-Jones, the National Domestic Violence Hotline’s Chief Executive, “‘[d]omestic violence is rooted in power and control.’” When abusers lose control of their intimate partners, they resort to a variety of tactics to subjugate them. The Center for Disease Control states that intimate partner violence may consist of physical violence, sexual violence, and psychological aggression, which includes expressive aggression (insulting, name calling) and coercive control (behaviors that involve monitoring, controlling, or threatening the victim). Coercive control encompasses a variety of behaviors aimed at overcoming a person’ s free will and curtailing their personal liberty and sense of agency.
A pervasive form of coercive control is financial abuse, which refers to “behavior that seeks to control a person’s ability to acquire, use, or maintain economic resources, and threatens their self-sufficiency and financial autonomy.” An estimated 99 percent of domestic violence cases involve financial abuse. Examples of financial abuse include: forcing a partner to miss, leave, or be late to work; harassing a partner at work; controlling how money is spent; withholding money or basic living resources; giving a partner an ‘allowance’; stealing money, credit, property, or identity from a partner; and forcing a partner to file fraudulent legal financial documents or overspend on credit cards. The effects can devastate the victim and make them more vulnerable to further domestic abuse.
The author writes: “AB 2517 will play a critical part in providing some protections judges can use in determining who is responsible for paying off the debt that happened. This bill is essential in helping survivors get back on track faster.”
While a finding pursuant to this bill is binding as to the parties, the victim may need to take additional action to protect themselves against claims from creditors. Civil Code section 1798.93 provides that a victim of identity theft can bring an action against a claimant and is entitled to various forms of relief, including a declaration that the claim is void and unenforceable as against the victim. Section 1798. 93 also provides for a civil penalty for up to $30,000 if the victim establishes by clear and convincing evidence that the claimant continued to pursue their claim against the victim after being presented with facts that were later held to entitle the victim to a judgement under that section. A finding under this bill that a specific debt was incurred as a result of domestic violence would be probative, if not determinative, in a proceeding under section 1798.
In short, a finding under the new statute can lead to further action to financially hold an abuser responsible for coercive financial abuse perpetrated against a domestic violence survivor.
California Family Code § 6342.5 reads:
(a) After notice and a hearing, the court may issue an order determining the use, possession, and control of real or personal property of the parties during the period the order is in effect and the payment of any liens or encumbrances coming due during that period.
(b) The order described in subdivision (a) may include a finding that specific debts were incurred as the result of domestic violence and without the consent of a party. For purposes of this subdivision, the acts that may support this finding include, but are not limited to, the crimes proscribed by Section 530.5 of the Penal Code. This finding does not affect the priority of any lien or other security interest.
(c) The Judicial Council shall adopt appropriate forms and modify existing forms, as necessary, to effectuate this section.
(d) This section shall be operative on January 1, 2022.
If you’d like recourse for the financial abuse you suffered, schedule a free initial consultation with the Law Offices of Jane Migachyov HERE.