People in Illinois struggling to repay certain kinds of debt could get some relief under a new plan pending approval from Gov. J.B. Pritzker.
The measure calls for lowering interest rates on outstanding consumer debt from 9 percent to 5 percent. It would also trim 10 years off the time a lender can pursue collection.
The legislation would only apply to consumer debt — that is, debt for personal, family or household expenses. It's also limited to debt under $25,000.
State Rep. Will Guzzardi, a Chicago Democrat, sponsored legislation designed to help consumers get out from under the burden of debt owed as a result of a judgment.
“Consumer debt affects millions of people across this country, and it can be a cycle in which people get trapped and they can never get out from the burden of it. And the ways the laws are written in Illinois now makes it easier to get trapped in that cycle.”
Kevin Herrera, an attorney with the Shriver Center on Poverty Law , said, “Currently, consumers in the state of Illinois are paying exorbitant amounts of interest on debts the can’t afford to pay in the first place, and those debts are lingering for a quarter century. This was an unnecessary system that was extracting wealth from those who could least afford it.”
Herrera says the issue mainly affects minority communities.