IllinoisHB3352104th General Assembly (2025–2026)HouseWALLET

COLLECTION AGENCY COERCED DEBT

Sponsored By: Sponsor information unavailable

Signed by Governor

Summary

Amends the Collection Agency Act. Provides that a debtor is not liable for any coerced debt, as defined in the Act, and may assert that they have incurred a coerced debt by providing to a collection agency an oral or written Statement of Coerced Debt, as specified. Sets forth provisions concerning notice of coerced debt to a collection agency; duties of a collection agency upon receiving an incomplete statement of coerced debt; affirmative defenses in collection actions or arbitration; civil liability; protections from perpetrators of coerced debt; restrictions on waivers; and liability of collection agencies for violations of the Act. Provides that, upon receiving the debtor's complete statement of coerced debt and specified supporting information, a collection agency shall review and consider all the information received from the debtor as well as any other information available in the collection agency's file or from the creditor related to the alleged coerced debt within 90 days after receipt of the statement of coerced debt. Requires a collection agency, within 5 days after receipt of the complete statement of coerced debt and supporting information, to cease any pre-judgment attempts to collect the coerced debt from the debtor, including refraining from filing any lawsuit or arbitration to collect the coerced debt, and notify any consumer reporting agency to which the collection agency or creditor furnished adverse information about the debtor that the debtor disputes the adverse information. Establishes additional requirements for a collection agency that reviews a statement of coerced debt. Provides that, within 180 days after the effective date of the Act, the Department of Financial and Professional Regulation may design and publish a model coerced debt and third party written verification form in English and any other language it determines, within its discretion, is the first language of a significant number of consumers in the State. Makes other changes.

judiciary - civilassignmentsfinancial institutions

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 3 benefits, 2 costs, 1 mixed.

Debt relief for victims of coercion

Under Illinois law, you do not owe qualifying coerced debt, including the coerced part of a larger debt. This covers specified fraud, threats, force, coercion, undue influence, or unauthorized identity use involving family or household abuse or exploitation, and human trafficking. Debt secured by real property does not qualify. To claim relief, send the collection agency a complete written statement identifying the account, explaining the coercion, and listing preferred contact methods. Include supporting records and a signed statement that at least one household member experienced domestic violence, dating violence, sexual assault, stalking, or human trafficking. Supporting records can include police reports, court orders, financial records, communications, or verification from a qualified professional or clergy member. Within 180 days after the law's effective date, Illinois' financial regulator must publish model claim and verification forms with required signed verification language. Forms must be in English, with other languages available at the Department's discretion for significant consumer populations. Any agreement that gives up these rights or related legal claims is void.

Stronger court protections for coerced borrowers

You can use coerced debt as a defense against a collection lawsuit or arbitration. Submit a complete coerced-debt statement to both the collection agency and the court or arbitrator to establish an initial defense. The agency must then show that coercion more likely than not did not occur. In covered proceedings, the judge or arbitrator must protect you and your immediate family or household from an alleged perpetrator. Safety steps can include sealed records, hidden personal details, and remote depositions or evidence hearings.

Victims can recover debt-related losses

A collection agency that breaks these protections owes you the greater of actual damages or court-awarded statutory damages up to $2,500 per debt. It also owes court costs and reasonable attorney's fees. A person found by a court or arbitrator to have caused coerced debt owes the collection agency the debt, minus amounts already paid. That person also owes you actual losses from debt payments, garnishments, and related costs.

Collection pauses with debt claim limits

You can submit a coerced-debt statement electronically or by mail to the collection agency's designated address. After an oral claim, the agency must report disputed adverse information to credit reporting agencies. Within 14 days, it must explain the written-claim requirement and refer you to the state's model statement. For an incomplete statement, the agency must identify missing information within 21 days; you then have 21 days to provide it. Collection may resume if the statement remains incomplete 30 days after the notice. Within 10 days after receiving a complete statement, the agency must stop collection efforts before judgment and report the dispute. It must review the complete claim and supporting records within 90 days. If it finds coercion, it must stop collecting the coerced debt, including through lawsuits or arbitration, and request deletion from credit reports. It may ask for the perpetrator's identity and contact details, if known. If it rejects the claim, it must send its written decision and supporting evidence through your preferred contact method before restarting collection. After a good-faith rejection, you cannot submit another statement about that debt before a lawsuit or arbitration; the agency need not answer repeat statements. The agency cannot share your contact details or claim documents with the alleged perpetrator or others, but may share an allegation summary for collection purposes.

Collectors get more time to sue

The deadline to sue over alleged coerced debt pauses while the collection agency is temporarily barred from starting legal action. This gives the agency more time to bring a collection case after the pause ends.

Fraudulent debt verifiers face financial penalties

Qualified third parties face liability for fraudulently certifying that a debtor sought help with coerced debt, abuse, exploitation, or trafficking. They owe the collection agency actual damages, court costs, and reasonable attorney's fees. These payments go to the collection agency, not the debtor.

Sponsors & Cosponsors

Sponsors

There is no primary sponsor on record.

Cosponsors

  • Adriane L. Johnson

    Democratic • Senate

  • Amy Briel

    Democratic • House

  • Camille Y. Lilly

    Democratic • House

  • Celina Villanueva

    Democratic • Senate

  • Christopher Belt

    Democratic • Senate

  • Dagmara Avelar

    Democratic • House

  • Diane Blair-Sherlock

    Democratic • House

  • Graciela Guzmán

    Democratic • Senate

  • Hoan Huynh

    Democratic • House

  • Jehan Gordon-Booth

    Democratic • House

  • Jennifer Gong-Gershowitz

    Democratic • House

  • Joyce Mason

    Democratic • House

  • Justin Slaughter

    Democratic • House

  • Karina Villa

    Democratic • Senate

  • Kelly M. Cassidy

    Democratic • House

  • Kevin John Olickal

    Democratic • House

  • Kimberly A. Lightford

    Democratic • Senate

  • Mary Edly-Allen

    Democratic • Senate

  • Maura Hirschauer

    Democratic • House

  • Nabeela Syed

    Democratic • House

  • Nicolle Grasse

    Democratic • House

  • Rachel Ventura

    Democratic • Senate

  • Rita Mayfield

    Democratic • House

  • Robert Peters

    Democratic • Senate

  • Stephanie A. Kifowit

    Democratic • House

  • Steve Stadelman

    Democratic • Senate

  • Sue Rezin

    Republican • Senate

  • Thaddeus Jones

    Democratic • House

  • Theresa Mah

    Democratic • House

  • Willie Preston

    Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 186 • No: 30

Senate vote • 5/22/2025

Third Reading - Passed;

Yes: 56 • No: 0

Senate vote • 5/7/2025

Do Pass Financial Institutions;

Yes: 8 • No: 0

House vote • 4/10/2025

Third Reading - Short Debate - Passed

Yes: 89 • No: 23

House vote • 4/9/2025

House Floor Amendment No. 1 Recommends Be Adopted Judiciary - Civil Committee;

Yes: 20 • No: 0

House vote • 3/19/2025

Do Pass / Short Debate Judiciary - Civil Committee;

Yes: 13 • No: 7

Actions Timeline

  1. Public Act . . . . . . . . . 104-0297

    8/15/2025House
  2. Effective Date January 1, 2026

    8/15/2025House
  3. Governor Approved

    8/15/2025House
  4. Added as Alternate Co-Sponsor Sen. Graciela Guzmán

    6/24/2025Senate
  5. Sent to the Governor

    6/20/2025House
  6. Added as Alternate Co-Sponsor Sen. Steve Stadelman

    5/22/2025Senate
  7. Added as Alternate Co-Sponsor Sen. Christopher Belt

    5/22/2025Senate
  8. Added as Alternate Chief Co-Sponsor Sen. Sue Rezin

    5/22/2025Senate
  9. Added as Alternate Co-Sponsor Sen. Willie Preston

    5/22/2025Senate
  10. Added as Alternate Co-Sponsor Sen. Mary Edly-Allen

    5/22/2025Senate
  11. Added as Alternate Co-Sponsor Sen. Adriane L. Johnson

    5/22/2025Senate
  12. Passed Both Houses

    5/22/2025House
  13. Third Reading - Passed; 056-000-000

    5/22/2025Senate
  14. Added as Alternate Co-Sponsor Sen. Karina Villa

    5/16/2025Senate
  15. Added as Alternate Co-Sponsor Sen. Celina Villanueva

    5/16/2025Senate
  16. Added Co-Sponsor Rep. Thaddeus Jones

    5/16/2025House
  17. Placed on Calendar Order of 3rd Reading May 13, 2025

    5/8/2025Senate
  18. Second Reading

    5/8/2025Senate
  19. Placed on Calendar Order of 2nd Reading May 8, 2025

    5/7/2025Senate
  20. Do Pass Financial Institutions; 008-000-000

    5/7/2025Senate
  21. Added as Alternate Co-Sponsor Sen. Rachel Ventura

    5/7/2025Senate
  22. Added as Alternate Chief Co-Sponsor Sen. Robert Peters

    5/7/2025Senate
  23. Assigned to Financial Institutions

    4/29/2025Senate
  24. Added Co-Sponsor Rep. Amy Briel

    4/23/2025House
  25. Referred to Assignments

    4/14/2025Senate

Bill Text

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