Pritzker signs bill to limit high-interest consumer debt
SPRINGFIELD -- Illinois residents who have had judgments entered against them for consumer debts will soon start paying less interest on those debts, and collectors will have a shorter time frame in which to collect on those debts.
That's the result of a new law Gov. J.B. Pritzker signed Monday. House Bill 88, known as the Consumer Fairness Act, reduces the interest rate charged on post-judgment debt of $25,000 or less to 5 percent, instead of 9 percent. It also reduces the time for collecting on a judgment to 17 years, instead of 26 years.
The new law takes effect Jan. 1, 2020.
In a statement, Pritzker said the intent of the legislation is to relieve consumers from the burden of high-interest debt.
"Consumer debt is at an all-time high across the United States, and there are millions of people, including too many Illinois families, who are struggling under unconscionable circumstances," he said. "Today, here in Illinois, we are giving real relief to those who are simply trying to pay off their debts, so they can end the cycle of debt they are trapped in."
The bill was sponsored in the House by state Rep. Will Guzzardi and in the Senate by state Sen. Iris Martinez, both Chicago Democrats.
It passed both chambers by unanimous votes without opposition from debt collectors or other financial institutions.
"Millions of Illinoisans struggle with consumer debt, and our laws have allowed far too many of them to get trapped in an endless cycle of collections," Guzzardi said in the statement. "Today, we are putting reasonable limits on debt collection to protect people from predation and help them get back on their feet."