Illinois Senate Bill SB2220

Illinois 2023-2024 Regular Session

• Introduced: 2/10/23
• Refer: 2/10/23
• Refer: 2/28/23
• Report Pass: 3/8/23
• Refer: 3/31/23

Caption

DEBT JUDGMENT/HOMESTEAD EXEMPT

Impact

One of the bill's key provisions reduces the amount of wages that can be garnished for debt repayment from 15% to 10% of gross weekly wages, enhancing financial relief for consumers. Additionally, it alters the calculation of disposable earnings, whereby a broader threshold is established for what constitutes exempt earnings from garnishment. The expanded exemption underlines a strong move towards consumer protection, aiming to prevent debtors from being plunged into financial despair over unmanageable debts.

Summary

SB2220, introduced by Senator Robert F. Martwick, proposes significant amendments to the Illinois Code of Civil Procedure, focusing on consumer debt collection practices and protections for debtors. The bill mandates that summonses in debt collection actions must include a clear notice informing debtors of their rights to protect certain assets and benefits, including Social Security, public benefits, and equity in their homes. This notice is intended to ensure debtors are aware of their exemptions and can prevent potential hardships due to overwhelming debt obligations.

Contention

Noteworthy points of contention include the challenges this bill could pose for creditors seeking to collect debts. Opponents may argue that limiting wage garnishments and extending the period for debt judgments to expire after seven years unfairly undermines the ability of creditors to recover debts owed. Furthermore, while proponents laud the preservation of debtors' rights and protections, they may raise concerns about potential unintended consequences in the credit market, wherein lenders might tighten credit availabilities or increase interest rates to offset the perceived risks associated with these consumer protections.