Illinois Laws Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire


Financial Inclusion for All Illinois: Amy Eisenstein, 630-878-9701; National Consumer Law Center Contact: Stephen Rouzer (

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Illinois Laws Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire

National Consumer Law Center’s 50-State Review: Illinois Receives a D Rating; Consumers Need More Robust Protections from Debt Collectors

Chicago – With millions of families struggling to recover from the economic fallout of the COVID-19 pandemic, and state and federal eviction and utility shut off moratoriums coming to an end, Illinois must take steps to protect households from seizure of essential wages and property to pay old debts. 

Every state has a set of exemption laws that are intended to prevent creditors from pushing families into destitution. But a new report from the National Consumer Law Center, No Fresh Start 2021: Will States Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire?, which surveys state exemption laws that protect wages, assets in a bank account, and property from seizure by creditors, finds that Illinois’s exemption laws fail to meet even the most basic standards

“The weak exemption laws in Illinois enable creditors to strip wealth from families, widening the racial wealth gap. Our state should support permanent pathways toward economic stability for Illinois families, not trap them in burdensome cycles of debt.” – Amy Eisenstein, Coalition Manager, Financial Inclusion for All Illinois (“FIAI”).

“Debt collectors wipe out a family’s savings and a big part of its monthly income, often acting on debts the original creditor has already written off. Nobody benefits but the collector. And the family then cannot pay its current bills, prompting a bottomless cycle of debt. There must be a better balance in this system.” – John Bouman, Director of Legal Action Chicago, a member organization of FIAI.

State exemption laws are a fundamental safeguard designed to protect consumers and their families from poverty, and to preserve their ability to be productive members of society and achieve financial security. These protections are particularly important as families struggle to regain financial stability as pandemic protections expire. Yet Illinois fails to meet two of the five most important protection standards, and receives a “C” rating in the other three.

Illinois fails to adequately:

  • Preserve the family’s home—at least a median-value home; and
  • Prevent seizure and sale of the debtor’s necessary household goods. 

Illinois receives a “C” rating in the areas of:

  • Preventing creditors from seizing so much of the debtor’s wages that the debtor is pushed below a living wage; 
  • Allowing the debtor to keep a used car of at least average value; and
  • Preserving a basic amount in a bank account so that the debtor’s funds to pay essential costs such as rent, utilities, and commuting expenses are not cleaned out.

“In Illinois and other states with weak exemption laws, families will face a wave of debt collector lawsuits that force the seizure of wages and essential property,” said Carolyn Carter, associate director at the National Consumer Law Center. “Weak exemption laws will impede economic recovery and exacerbate the racial wealth gap.” 

By updating our exemption laws, Illinois can prevent creditors and debt buyers from pushing families into poverty. These protections also benefit society at large, by helping families regain their financial footing and contribute to the economy, keeping workers in the workforce, helping families stay together, reducing the demand on funds for unemployment compensation and social services, and keeping money in local communities where it will aid economic recovery. 

Financial Inclusion for All Illinois is a coalition dedicated to advancing policies and practices to narrow the gender and racial wealth divides in Illinois. Coalition members include Heartland Alliance, Legal Action Chicago, POWER-PAC IL, Woodstock Institute, LISC Chicago, Small Business Majority, YWCA Metropolitan Chicago, COFI, and many others. For more information, please contact Amy Eisenstein, Coalition Manager at Heartland Alliance,

The nonprofit National Consumer Law Center® (NCLC®) works for economic justice for low-income and other disadvantaged people in the U.S. through policy analysis and advocacy, publications, litigation, and training.

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