The Illinois Senate yesterday joined the state’s House of Representatives in unanimously passing a bill that decreases the post-judgment interest rate that can be charged on unpaid debts and lowers the timeframe that judgment holders have to collect.
The Consumer Fairness Act of 2019 now heads to Gov. J.B. Pritzker for his signature to become law.
If enacted, the law would lower the post-judgment interest rate on unpaid debts in Illinois to 5%, from 9% currently. As well, judgment holders would have 17 years to collect on a debt, instead of the 26 years they currently have. The interest rate applies to judgments of $25,000 or less.
“The Consumer Fairness Act gives a fighting chance to thousands of Illinoisans who, up to this point, have been faced with the crippling reality of years of debt accumulation with a 9% interest rate,” said Kevin Herrera, staff attorney at the Sargent Shriver National Center on Poverty Law, in a statement. “Critically, this new legislation also provides clarity around the debt collections process, letting people know what debts are being collected on – and how long the collections process will last – sooner. We are thrilled that Illinois is on its way to joining several other states around the country in leveling the playing field between people who owe judgment debts and the collections industry.”
Consumer advocates said the passage of the legislation will help close a racial wealth divide in Illinois.