Illinois Rep. Cassidy’s coerced debt protection bill passes both chambers of Illinois General Assembly

Passed bill authored by State Rep. Kelly M. Cassidy aims to protect debtors from coerced debt by allowing dispute submissions and requiring collection agencies to investigate claims, with penalties for noncompliance, according to the Illinois General Assembly.

In the House, 74 Democrats and 15 Republicans voted in favor of the bill, while 23 Republicans opposed it.

Meanwhile, in the Senate, 38 Democrats and 18 Republicans voted in favor of the bill.

Cassidy introduced the bill in the Illinois House on Feb. 7, 2025 during the 104th session.

The legislation, known as HB3352, was passed on May 22, 2025 during the general assembly session 104.

According to the Illinois General Assembly site, the legislature summarized the bill’s official text as follows: “Amends the Collection Agency Act. Provides that a debtor is not liable for any coerced debt, as defined in the Act, and may assert that they have incurred a coerced debt by providing to a collection agency an oral or written Statement of Coerced Debt, as specified. Sets forth provisions concerning notice of coerced debt to a collection agency; duties of a collection agency upon receiving an incomplete statement of coerced debt; affirmative defenses in collection actions or arbitration; civil liability; protections from perpetrators of coerced debt; restrictions on waivers; and liability of collection agencies for violations of the Act. Provides that, upon receiving the debtor’s complete statement of coerced debt and specified supporting information, a collection agency shall review and consider all the information received from the debtor as well as any other information available in the collection agency’s file or from the creditor related to the alleged coerced debt within 90 days after receipt of the statement of coerced debt. Requires a collection agency, within 5 days after receipt of the complete statement of coerced debt and supporting information, to cease any pre-judgment attempts to collect the coerced debt from the debtor, including refraining from filing any lawsuit or arbitration to collect the coerced debt, and notify any consumer reporting agency to which the collection agency or creditor furnished adverse information about the debtor that the debtor disputes the adverse information. Establishes additional requirements for a collection agency that reviews a statement of coerced debt. Provides that, within 180 days after the effective date of the Act, the Department of Financial and Professional Regulation may design and publish a model coerced debt and third party written verification form in English and any other language it determines, within its discretion, is the first language of a significant number of consumers in the State. Makes other changes.”

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill amends the Collection Agency Act to introduce provisions addressing “coerced debt,” defined as debt incurred through fraud, duress, or coercion, excluding real property debts. It allows debtors to dispute coerced debts by submitting a written statement with supporting documentation like police reports or court orders. Upon submission, a collection agency must investigate and refrain from collection efforts during the review. If the debt is deemed coerced, collection must cease, and credit agencies must be notified to delete adverse information. Debtors have an affirmative defense in legal actions if the debt is coerced. The bill also imposes penalties on collection agencies failing to comply and mandates the creation of a model statement within 180 days of the act’s effective date.

The bill was sponsored by Sen. Adriane Johnson (Democrat-30th District), Rep. Amy Briel (Democrat-76th District), and Rep. Camille Y. Lilly (Democrat-78th District), along with 26 other sponsors.

Bills in Illinois follow a multi-step legislative process, beginning with introduction in either the House or Senate, followed by committee review, floor debates, and votes in both chambers before reaching the governor for approval or veto. The General Assembly operates on a biennial schedule, and while typically thousands of bills are introduced each session, only a fraction successfully pass through the process to become law.

You can read more about bills and other measures here.

Cassidy, a Democrat, was elected to the Illinois State House in 2011 to represent the state’s 14th House District, replacing previous state representative Harry Osterman.

Lawmakers listed as “Not Voting” were present for the vote but did not cast a vote. Those marked as having an “Excused Absence” were not present and formally provided a reason for their absence, which was accepted.