Illinois Takes More Steps to Regulate Debt Collection During COVID-19

The state of Illinois Department of Financial and Professional Regulation issued guidance yesterday recommending practices that licensed consumer credit companies should putting into place to help individuals dealing with the coronavirus pandemic, including those related to how debts are collected, while Illinois Gov. J.B. Pritzker signed a separate executive order suspending certain remedies used by judgment creditors to collect on unpaid debts.

The guidance issued by the IDFPR can be accessed by clicking here. A copy of Gov. Pritzker’s executive order can be accessed by clicking here.

[EDITOR’S NOTE: Have you signed up yet for a free webinar on Wednesday, April 15 at 1pm ET aimed at discussing all the different measures that states have taken to regulate debt collections during the coronavirus pandemic? No? You can sign up by clicking here.]

Consumer credit companies that require licenses in Illinois include consumer installment lenders, sales finance agencies, payday loan lenders, and debt management services. Those companies are urged to be more proactive and increase communication with consumers, especially in order to offer “payment options, including deferred or partial payments, which would avoid delinquencies and negative credit reporting.”

Consumer credit companies are also recommended to consider the suspension of debt collection activities for individuals who have been affected by COVID-19. Those companies should be reaching out to individuals who have automatic payment plans and “upon request of the consumer, temporarily suspend these automatic repayment plans and place the consumer in forbearance without fees or interest.”

The IDFPR had previously issued guidance, advising collection agencies about what to do if they wish to have employees work from home, and encouraging collection agencies and debt buyers to suspend all collection activity for the next 60 days.

Meanwhile, Gov. Pritzker suspended the service of garnishment summons, wage deduction summonses, or citations to discover assets on a consumer debtor or consumer garnishee because upon the filing of those documents causes individuals to have to travel to courthouses and financial institutions, which “undermines critical efforts to maximize social distancing and prevent the spread of COVID-19.”

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