Consumer Fairness Act Lowers Post-Judgment Interest Rate from 9% to 5%, Reduces Collection Timeframe by 9 Years
Surrounded by consumer advocates at Chicago Volunteer Legal Services, Governor JB Pritzker signed the bipartisan Consumer Fairness Act into law Monday, giving millions of Illinoisans relief from high interest on consumer debt.
“Consumer debt is at an all-time high all across the United States, and there are millions of people, including too many Illinois families, who are struggling under unconscionable circumstances,” said Governor JB Pritzker. “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.”
With one in three Illinois residents in the debt collection process according to the Heartland Alliance, the new law takes two steps to protect Illinois residents from crushing debt.
Helping families avoid the cycle of debt that prevents them from building long-term financial security, the new law lowers post-judgment interest rates on consumer debt under $25,000 from 9% to 5%. It also reduces the timeframe to collect on a judgment from 26 to 17 years by limiting revivals, preventing debt collectors from trapping families in debt with judgments that are decades old.
HB 88 was passed unanimously without opposition from debt collectors and other financial institutions. The new law takes effect January 1, 2020.
“Debt can be a real, crushing thing that keeps people trapped in a cycle of poverty,” said Assistant Senate Majority Leader Iris Martinez. “By making it easier for people to make payments, we are not only making it more likely for the debt to be paid but also helping people move toward financial independence.”
“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,” said Rep. Will Guzzardi. “Today, we’re putting reasonable limits on debt collection to protect people from predation and help them get back on their feet. HB 88 is a significant reform for justice and fairness in our state, and I’m honored to have been a part of its passage.”