New Illinois Law: You Are Not Responsible for Coerced Debt

The Coerced Debt Amendment to the Illinois Collection Agency Act (HB 3352) became effective on January 1, 2026. Illinois changed the Collection Agency Act to protect people who were forced or tricked into debt. Under this law, a debtor is not legally responsible for coerced debt. 

This change is especially important for survivors of domestic violence and human trafficking. 

What Is Coerced Debt? 

Coerced debt is a debt, or part of a debt, that a person took on because of: 

• Fraud 
• Duress 
• Intimidation 
• Threats 
• Force or coercion 
• Undue influence 
• The non-consensual use of the person’s personal identifying information 

The law applies when the debt was caused by an abuser or exploiter, including family or household members as defined by the Illinois Domestic Violence Act, or as a result of human trafficking. 

Coerced debt does not include debt secured by real property, such as a mortgage. 

Common Examples 

This law protects people who were: 

• Forced by a domestic partner to open credit cards 
• Threatened into taking out loans 
• Tricked into signing financial agreements 
• Victims of identity misuse by a family or household member 

If the debt happened because of force, fear, or deception, it may be coerced debt. 

What the Law Says 

Under the amended Collection Agency Act: 

• A debtor is not liable for any coerced debt 
• Collection agencies cannot legally collect that debt 

This means a survivor should not have to pay debts created through abuse or exploitation. 

How to Assert Your Rights 

The Illinois Department of Financial and Professional Regulation (IDFPR) created a standard form statement for debtors to use. This form includes all the information required by law. 

The debtor must send the completed statement to the collection agency. 

Required Proof 

The statement must be supported by one of the following: 

• A police report 
• A court order 
• Verification from a qualified third party 
• Another document showing the debt was coerced 

This documentation helps show that the debt resulted from abuse, coercion, or trafficking. 

In Court: An Affirmative Defense 

A debtor can also raise coerced debt as an affirmative defense. This means that if a collection agency sues, the debtor can tell the court that the debt is not enforceable because it was coerced. 

Bottom Line 

If you were forced, threatened, or tricked into debt by an abuser or trafficker, Illinois law says that debt is not your responsibility. You have the right to stop collection and to defend yourself if a case is filed.