Illinois debt collection laws

By Kai Greenspan, Founding Editor · Last updated: September 3, 2026

How long can someone sue you over a debt in Illinois?

The Code of Civil Procedure sets the period by the kind of obligation, and for consumer debts the two that usually matter are these.

Ten years for “actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing”, under Section 13-206, which says they “shall be commenced within 10 years next after the cause of action accrued”.

Five years for “actions on unwritten contracts, expressed or implied” and for “all civil actions not otherwise provided for”, under Section 13-205, which says they “shall be commenced within 5 years next after the cause of action accrued”.

Section 13-206 also says, in its own words, what a written payment or promise does to the clock: “if any payment or new promise to pay has been made, in writing, on any bond, note, bill, lease, contract, or other written evidence of indebtedness, within or after the period of 10 years, then an action may be commenced thereon at any time within 10 years after the time of such payment or promise to pay.”

Which period applies to a particular account, when it started, and whether anything paused or restarted it are questions about the facts of that account, and they are for a lawyer rather than this page.

Sources: Code of Civil Procedure Sections 13-205 and 13-206(Article XIII, Part 2) · quoted 3 September 2026

Do debt collectors have to be licensed in Illinois?

Yes, and the statute is direct. Section 4 of the Collection Agency Act states:“No collection agency shall operate in this State, directly or indirectly engage in the business of collecting debt, solicit debt claims for others, have a sales office, a client, or solicit a client in this State, exercise the right to collect, or receive payment for another of any debt, without obtaining a license under this Act.” Section 1 says the Act “shall be known and may be cited as the” Collection Agency Act, and the license is issued by the Department of Financial and Professional Regulation.

Since when. The Department’s register of collection agency licenses, which the state publishes as open data, carries licenses issued from 1975, and the Act has been renumbered since: the legislature’s own text marks each section as formerly part of Chapter 225 of the compiled statutes, the professions chapter, before its move to Chapter 205, financial regulation. The register keeps ended licenses on the record, so a company licensed for decades shows its history as well as its current license, which is what this directory’s bands measure.

Practising without one has a price. Section 4.5 provides that any person who“holds oneself out to practice as a collection agency without being licensed under this Act shall, in addition to any other penalty provided by law, pay a civil penalty to the Department in an amount not to exceed $10,000 for each offense”.

Sources: Collection Agency Act, 205 ILCS 740, Sections 1, 4 and 4.5· quoted 2 September 2026 · first-license dates from theDepartment’s license records on the state’s open data portal, read 2 September 2026

Who does not need the license?

Two separate things sit outside Section 4, and they are easy to confuse. The first is a list. Section 2.03 provides that “This Act does not apply to the following”, and names nineteen kinds of business:

• “Banks, including trust departments, affiliates, and subsidiaries thereof, and fiduciaries (except those who own or operate collection agencies)”, and likewise “Credit unions, including affiliates and subsidiaries thereof (except those who own or operate collection agencies)”.
• “Licensed attorneys at law”, “Insurance companies”, “Abstract companies doing an escrow business”, “Real estate brokers when acting in the pursuit of their profession”, and “Public officers and judicial officers acting under order of a court”.
• Lenders collecting their own loans under other licenses: persons licensed under the Residential Mortgage License Act of 1987, the Sales Finance Agency Act, the Student Loan Servicing Act, the Consumer Installment Loan Act, the Consumer Legal Funding Act and the Pawnbroker Regulation Act of 2023 when engaged in the activity those Acts authorize, and persons originating loans under the Interest Act when collecting loans they originated.
• “Retail sellers collecting on retail installment contracts or retail charge agreements originated by the retail seller”, and motor vehicle retail sellers collecting their own contracts.
• Condominium unit owners’ associations and their agents collecting assessments, “Any person under contract with a creditor to notify the creditor’s debtors of a debt using only the creditor’s name”, and “Any person identified by the Department by rule”.

The second is inside Section 4 itself, and it is the one that matters most when the letter comes from another state: “no collection agency shall be required to be licensed if the agency’s activities in this State are limited to collecting debts from debtors located in this State by means of interstate communication, including telephone, mail, or facsimile transmission, electronic mail, or any other Internet communication from the agency’s location in another state provided they are licensed in that state and these same privileges are permitted in that licensed state to agencies licensed in Illinois”.

This matters when you look a company up. A bank collecting its own loans, a lawyer, a retailer collecting its own instalment contracts, or a Texas-licensed agency writing to you from Texas can be operating lawfully in Illinois and lawfully hold no Illinois collection agency license.

Source: Collection Agency Act, Sections 2.03 and 4 · quoted 2 September 2026

The bond behind the license

Illinois both licenses a collection agency collecting for others and bonds it, and the two are joined. Section 8 says “A collection agency shall be required to file and maintain in force a surety bond, issued by an insurance company authorized to transact fidelity and surety business in the State of Illinois.”The bond “shall be for the benefit of creditors who obtain a judgment from a court of competent jurisdiction based on the failure of the agency to remit money collected on account and owed to the creditor”, and “shall be in the form prescribed by the Secretary in the sum of $25,000”.

The join is in the same section: “A license shall be cancelled on the termination date of the agency’s bond unless a new bond is filed with the Department to become effective at the termination date of the prior bond.” So for an agency collecting for others, a license in force is also evidence of a bond in force. The register records the license, which is why this directory describes Illinois agencies as licensed, never as bonded, and measures years continuously licensed.

Source: Section 8 · quoted 2 September 2026

Debt buyers are licensed under the same Act, without the bond

The Act’s definition of a collection agency in Section 2 reaches beyond collecting for others. It includes any person who, in the ordinary course of business, regularly“engages in the business of buying debt”, and it defines a“Debt buyer” as “a person that is engaged in the business of purchasing delinquent or charged-off consumer loans or consumer credit accounts or other delinquent consumer debt for collection purposes, whether it collects the debt itself or hires a third party to collect or hires an attorney-at-law for litigation to collect such debt”. Section 8.5 then says “A debt buyer shall be subject to all of the terms, conditions, and requirements of this Act”, with the exceptions in Section 8.6: in collecting accounts it owns, a debt buyer “shall not be required to (i) file and maintain in force a surety bond under Section 8 of this Act; (ii) maintain a trust account under Section 8c of this Act; (iii) procure written authorization to refer the account to an attorney for suit under Section 8a-1 of this Act; or (iv) adhere to the assignment for collection criteria under Section 8b of this Act”.

So the Illinois register lists debt buyers and third-party collectors under one license type and does not tell them apart. This directory does, from each company’s own published description, under the scope rule on the methodology page: a company whose primary business is collecting for others is listed, with any purchasing disclosed, and a company primarily in the business of buying debt is not.

Sources: Sections 2, 8.5 and 8.6 · quoted 2 September 2026

What must a collector send you in writing?

Section 9.3 requires a validation notice. “Within 5 days after the initial communication with a debtor in connection with the collection of any debt, a collection agency shall, unless the following information is contained in the initial communication or the debtor has paid the debt, send the debtor a written notice” with five disclosures: the amount of the debt; the name of the creditor; that unless the debtor disputes the debt within 30 days it will be assumed valid; that a written dispute within that period obliges the agency to obtain verification, or a copy of a judgment, and mail it; and that on written request within the period the agency will provide the name and address of the original creditor.

A dispute in writing within the 30 days has teeth: the agency “shall cease collection of the debt, or any disputed portion thereof, until the collection agency obtains verification of the debt or a copy of a judgment or the name and address of the original creditor and mails a copy” of it to the debtor. And silence is not consent:“The failure of a debtor to dispute the validity of a debt under this Section shall not be construed by any court as an admission of liability by the debtor.”The section applies to a collection agency or debt buyer when it collects consumer debt.

Source: Section 9.3 · quoted 2 September 2026

What are collectors not allowed to do?

The Act carries its own conduct rules for consumer debt. Section 9.2 says that without the debtor’s consent or a court’s permission a collection agency may not communicate with a debtor at any unusual time, place or manner known to be inconvenient, and that“a collection agency shall assume that the convenient time for communicating with a debtor is after 8:00 a.m. and before 9:00 p.m. in the debtor’s local time”; nor at the debtor’s place of employment if the agency knows the employer prohibits it; nor, once the debtor is known to have a lawyer, with anyone but the lawyer. It provides that “If a debtor notifies a collection agency in writing that the debtor refuses to pay a debt or that the debtor wishes the collection agency to cease further communication with the debtor, the collection agency may not communicate further with the debtor with respect to such debt”, except to say its efforts are ending or that a specified remedy may or will be invoked.

When an agency contacts anyone else to find a debtor, Section 9.1 says it shall“not state that the consumer owes any debt”, shall“not communicate by postcard”, and shall not use any language or symbol on an envelope that indicates it is in the debt collection business. The Department may discipline a licensee for violations: Section 9 lets it “refuse to issue or renew, or may revoke, suspend, place on probation, reprimand, or take other disciplinary or non-disciplinary action as the Department may deem proper, including fines not to exceed $10,000 per violation”, and Section 9.7 lets the Attorney General enforce knowing violations of these sections as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act.

The state law sits beside the federal one. Section 60 provides that a collection agency or debt buyer “shall not be subject to civil liability for its failure to comply with Section 2, 9.1, 9.2, or 9.3 of this Act, as amended by Public Act 99-227, if the collection agency or the debt buyer can demonstrate compliance with comparable provisions of the federal Fair Debt Collection Practices Act”.

Sources: Sections 9, 9.1, 9.2, 9.7 and 60 · quoted 2 September 2026

How do you check an Illinois collector?

The first place is the Department of Financial and Professional Regulation’s own license records, which the state publishes in theProfessional Licensing dataset on its open data portal, and which the Department also serves through its license lookup for one company at a time. The records reach back to 1975 and keep ended licenses, so a company often has several rows; the current license is the one recorded as active or on probation with an expiration date still in the future. Illinois collection agency license numbers are nine digits beginning 017. A bank, a lawyer or a retailer collecting its own accounts, or an out-of-state agency collecting by interstate communication under a home-state license, can be lawfully absent, under the exemptions above. Our step-by-step guide covers the traps.

This directory’s Illinois page lists agencies as they pass verification against the register. The states page says which states are covered and what verified means in each.

Common questions about Illinois debt collection law

This page is information about published law, not legal advice, and it does not create a lawyer-client relationship. Whether any rule applies to a particular debt depends on facts this page cannot know. Every quotation above was taken from the linked source on the date shown; if you find an error, our corrections policyexplains how to tell us.

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