My daughter ended up in this exact place. Heading into second year level 10 season and the gym would not release her from the contract. Owner called every competitive gym within commute distance to tell them we owed them money. I stopped at 5 gyms contacted, but even after explaining the monies "due" were future meet fees and that I'd already paid well over $1,000 in meet fees/assessments for a future season she would never compete (and would repay for at the new gym), they all sided with the abusive gym and said they couldn't take her.
My daughter said she didn't want to pay another dime to the abusive gym and decided to walk away instead.
Reported to USAG and their response was, we hear this all the time and it's awful and against what we stand for, but we can't do anything about it. Translation, any gym, state, region, is free to screw with kids and their families and USAG couldn't give a flying fig.
I wouldn't worry about the owner going after you for money though. Beyond blackballing my at the time 13 year old kid and destroying her gymnastics future out of spite, the original gym never actually tried to recoup the monies. Likely because they know legally, they have no standing.