New Disclosure Laws Proposed in New York, Illinois

Eric Rosenkoetter from Maurice Wutscher has been doing yeoman’s work this month in keeping track of proposed state laws that the credit and collection industry need to be aware of. Following up on his notice about a proposed law in New York that clarifies how collectors and creditors can attempt to collect debts from deceased individuals, is an update about another bill in New York and one from Illinois, both of which would require collectors to send specific notices to individuals.


In New York, Assembly Bill 876 would require collection agencies to include a section called “Debtor’s Rights” in an initial written communication with an individual. That section would have to include the following statements:

As a debtor who owes or may owe a consumer claim, you are given some protection and rights by the New York and federal laws regulating debt collection procedures. You should be aware of your rights.

  • A debt collector may contact you or any member of your family or household directly. However, they may not contact you with such frequency, at unusual hours, or in a manner that can be expected to abuse or harass you. They also cannot threaten action which they do not take in the usual course of business.
  • A debt collector may not threaten to contact your employer regarding a debt prior to obtaining a final judgment against you. However, a debt collector may contact your employer to execute a wage assignment agreement if you, the debtor, have agreed to the assignment.
  • A debt collector cannot use a communication which appears to be authorized, issued, or approved by a government agency or attorney when it is not.
  • A debt collector cannot disclose or threaten to disclose information affecting your reputation for creditworthiness if the collector knows or has reason to know the information is false. A debt collector also cannot attempt or threaten to enforce a right when it knows or has reason to know the right does not exist.
  • For more information about your rights under state and federal debt collection procedures law, contact the Consumer Protection Division of the New York State Department of State at (insert the current telephone number or internet website established by the consumer protection division for receiving inquiries from consumers). You may also contact the New York State Attorney General at (insert the current telephone number established by the department of law for receiving inquiries from consumers) or (insert the current address of the website of the department of law).

The bill has been referred to the legislature’s standing committee on consumer affairs and protection.


In Illinois, House Bill 281 would require collectors to include an additional notice when issuing a summons for an unpaid debt.

In addition to the summons, the bill would require a separate notice to be included. The notice would say:


  • Your Social Security
  • Your SSI
  • Your Public Benefits
  • Your Veterans Benefits
  • Your Retirement Benefits
  • $7,500 in Equity in a Motor Vehicle
  • $150,000 to $200,000 in Equity in your Home
  • $15,000 in your Bank Account

You Can STOP:

  • Phone Calls from Debt Collectors
  • Verbal Abuse from Debt Collectors
  • Threats from Debt Collectors

You Have the RIGHT:

  • To Privacy
  • To Have the Court Review Any Agreement to Settle Your Case
  • To Ask for a Reasonable Payment Plan

As well, the bill would reduce the amount of time have a judgment revived by filing a petition to five years, from seven years, after the judgment has been entered, and alter the amount of wages that are subject to garnishment.

The bill has been referred to the legislature’s Rules Committee.

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