summary
Introduced
02/07/2025
02/07/2025
In Committee
05/09/2025
05/09/2025
Crossed Over
Passed
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 provide protections for individuals who have incurred "coerced debt," which is defined as debt obtained through identity theft, fraud, duress, intimidation, force, coercion, or non-consensual use of personal information, particularly within family or household contexts or due to human trafficking. The bill allows debtors to assert that a debt is coerced by submitting a detailed written statement to a collection agency, which must include specific information about the debt, an explanation of how it was incurred, and supporting documentation such as police reports, identity theft reports, or verification from qualified third parties like medical professionals, law enforcement, or domestic violence counselors. Upon receiving a complete statement, the collection agency must cease collection efforts within 5 days, review the claim within 90 days, and notify credit reporting agencies that the debt is disputed. If the agency cannot prove the debt is not coerced, it must stop all collection activities and request the removal of negative credit information. The bill also establishes that in any lawsuit or arbitration, the existence of coerced debt is an affirmative defense, and it creates civil liability for the perpetrator of the coerced debt, who can be held responsible for repaying the full debt and any damages incurred by the victim. Furthermore, the bill includes provisions to protect the debtor's privacy and safety during any legal proceedings related to coerced debt.
Committee Categories
Business and Industry
Sponsors (2)
Last Action
Rule 3-9(a) / Re-referred to Assignments (on 05/09/2025)
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.ilga.gov/legislation/BillStatus.asp?DocNum=2283&GAID=18&DocTypeID=SB&SessionID=114&GA=104 |
| BillText | https://www.ilga.gov/legislation/104/SB/10400SB2283.htm |
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