Illinois Passes Two Collection Agency Bills in Session

The Illinois Legislature has passed two laws directly affecting collection agencies in the span of two weeks.

On May 5, HB4025 passed both houses of the Illinois Congress. It allows counties to contract with private debt collectors in the pursuit of defaulted fines levied by judges as punishment for crimes. It also codifies the notion that responsibility to pay the collector?s fee lies with the debtor. The specific text of the bill, as it relates to collection agencies, is:

The State’s Attorney of the county in which the fine was imposed may retain attorneys and private collection agents for the purpose of collecting any default in payment of any fine or installment of that fine. The fees and costs incurred by the State’s Attorney in any such collection and the fees and charges of attorneys and private collection agents retained by the State’s Attorney for those purposes shall be charged to the offender.

The bill is presently before the Governor for signing into law.

This positive step for collection agencies was a bit overshadowed by a bill passed on May 13. HB4393 limits the fees an agency can collect when going after child support payments. Lawmakers say collection agencies overcharge parents when they help collect court-ordered child support.

Private collectors would not be able to keep more than 35-percent of the past-due money they collect. They would also be barred from charging fees on current and future support payments.

The vice president of a Texas-based collection agency says the fees are necessary for the companies collecting the money. Vanessa Diaz says her company, Supportkids, won’t do business in Illinois if the change becomes law.

HB4393 easily passed both houses of Congress and is also on the Governor?s desk.