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Bill > HB3352

IL HB3352

COLLECTION AGENCY COERCED DEBT

summary

Introduced
02/07/2025
In Committee
05/07/2025
Crossed Over
04/10/2025
Passed
05/22/2025
Dead

Introduced Session

104th General Assembly

Bill 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.

AI Summary

This bill amends the Collection Agency Act to establish protections for debtors who have incurred "coerced debt," which is defined as debt incurred through fraud, duress, intimidation, threat, force, coercion, undue influence, or non-consensual use of personal identifying information within family or household members, resulting from domestic violence, abuse, exploitation, or human trafficking. The bill allows debtors to submit a detailed written statement of coerced debt to a collection agency, which must include specific information about the debt, how it was incurred, and supporting documentation such as police reports, court orders, or verified third-party statements. Upon receiving a complete statement, the collection agency must cease collection efforts within 10 days, review the information within 90 days, and either determine the debt is coerced (and stop all collection activities) or provide a written explanation for why the debt is not considered coerced. The bill establishes that coerced debt is an affirmative defense in legal proceedings, with the collection agency bearing the burden of disproving the debtor's claim. Additionally, the law provides civil liability for perpetrators of coerced debt, protects the debtor's privacy during legal proceedings, prevents waivers of these rights, and allows debtors to seek damages if a collection agency fails to comply with the new provisions. The Department of Financial and Professional Regulation is required to develop model forms to help implement these protections.

Committee Categories

Business and Industry, Justice

Sponsors (29)

Last Action

Added as Alternate Co-Sponsor Sen. Steve Stadelman (on 05/22/2025)

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