Collecting debt in Illinois: licensing, bonds and statutes of limitations.
Collection agencies and debt buyers must be licensed by IDFPR's Division of Financial Institutions under the Illinois Collection Agency Act (205 ILCS 740, formerly 225 ILCS 425), with a $1,350 application fee and $750 annual renewal in 2026 (rising to $1,500 and $1,000 in 2027), licenses expiring December 31, a $25,000 surety bond from which debt buyers are exempt, a reciprocity exemption for out-of-state agencies that collect only by interstate communication, and a separate City of Chicago regulated business license for debt collectors.
General information, not legal advice. Every figure on this page links to the statute, rule or regulator page it came from, with the operative words quoted, and the date we verified it. Rules change; confirm with the regulator or your counsel before acting, and tell us if something here is out of date.
Do you need a license to collect in Illinois?
The Illinois Collection Agency Act was renumbered from 225 ILCS 425 to 205 ILCS 740 in 2023 and rewritten effective January 1, 2026; fees now change every calendar year ($1,350 to apply and $750 to renew in 2026; $1,500 and $1,000 from 2027) and every license expires December 31. Chicago separately licenses debt collectors under MCC 4-6-160; show the Chicago fee as 'set by MCC 4-5-010, confirm with BACP' rather than a number.
Fixed $25,000 surety bond for collection agencies, continuous, for the benefit of creditors who obtain a judgment for the agency's failure to remit collected money; 60-day termination notice; the license is cancelled on the bond termination date unless a replacement bond is filed (205 ILCS 740/8). Rule 150.25(a)(1)(D): 'Proof of a $25,000 surety bond' with the application; IDFPR form BD-COL. Debt buyers collecting accounts they own are exempt from the bond (205 ILCS 740/8.6(b)(i)); IDFPR requires it only from applicants 'that are not exclusively Debt Buyers'. 'Conditional' only because of the debt-buyer exemption; for third-party agencies the bond is mandatory.
205 ILCS 740/4.6: 'The Secretary may require participation in a third-party, multi-state licensing system' and 205 ILCS 740/5 allows application 'on forms provided by the Department or through a multi-state licensing system as designated by the Secretary', but IDFPR's collection agency page (read 2026-09-20) directs applicants to its own online portal (online-dfpr.micropact.com) and [email protected], and contains no NMLS reference; rule 150.25 says applications are submitted to the Division on its forms.
38 Ill. Adm. Code 150.135(a)(1)(A): the fee for an original or new collection agency license is '$1,200 in calendar year 2025; $1,350 in calendar year 2026; and $1,500 in calendar year 2027 and thereafter.' Branch office original license (150.135(a)(1)(B)): $250 in 2025; $350 in 2026; $500 in 2027 and thereafter. IDFPR Company Application Checklist: 'New Application ($1350) fee'. 205 ILCS 740/8a delegates fee setting to Department rule; all fees nonrefundable. Rule amended at 49 Ill. Reg. 14388, effective October 21, 2025. The site should show the calendar-year figure.
Separate branch office license for each additional office (38 Ill. Adm. Code 150.25(b); 'Branch Office' = another location with the same name and ownership as the main license, 150.10): $350 application / $150 renewal in 2026; $500 / $250 from 2027. Certification of record $50; returned payment $50 (150.135(c); 205 ILCS 740/35). Unlicensed practice: civil penalty up to $10,000 per offense (205 ILCS 740/4.5); Class A misdemeanor, Class 4 felony on repeat (205 ILCS 740/14b). Any multi-state licensing system administration fee is paid directly to that system (205 ILCS 740/8a(c)); none applies today because IDFPR does not use NMLS for this license.
trust account: 'Each licensed collection agency shall at all times maintain a separate bank account in which all monies received on debts shall be deposited, referred to as a "Trust Account"' (205 ILCS 740/8c); deposits within 5 business days; Trust Account Financial Report (TR-COL) with the application; debt buyers exempt (8.6(b)); owners/officers must have financial responsibility, be 18 or older, have 'an acceptable credit rating, have no unsatisfied judgments', and not have been 10%+ owners of a revoked or suspended former licensee (205 ILCS 740/7); Personal/Employment History (PH-COL) and Financial Statement (FS-COL) forms for each owner/officer; disclosure of all direct and indirect owners of 10% or more (205 ILCS 740/5); employee identity listing (EL-COL) of collectors and pseudonym rules (38 Ill. Adm. Code 150.40); not required for exclusive debt buyers; foreign entities: certificate of authority to transact business in Illinois from the Secretary of State (38 Ill. Adm. Code 150.25(a)(1)(B)); certificate of good standing; assumed name registration if applicable; business plan and organizational chart; listing of all other state licenses and disciplinary record (IDFPR checklist); actual street address of officers, no P.O. box (38 Ill. Adm. Code 150.25(a)(1)(A)); address and email address of record, changes within 14 days (205 ILCS 740/2.5); branch office license for each additional office (38 Ill. Adm. Code 150.25(b)); written creditor notice before referring an account to an attorney (205 ILCS 740/8a-1); assignment formalities and attorney representation for suits in the agency's name (8b); records retention and accounting/remittance rules (38 Ill. Adm. Code 150.70 to 150.120); no fingerprint or background-check filing, no collection manager exam, and no physical Illinois office requirement appear in the statute, rules or checklist
Exemptions. 205 ILCS 740/2.03 (as amended by P.A. 104-149, eff. 1-1-26): 1. banks, including trust departments, affiliates and subsidiaries, and fiduciaries, except those who own or operate collection agencies; 2. abstract companies doing an escrow business; 3. real estate brokers acting in their profession; 4. public and judicial officers acting under court order; 5. licensed attorneys at law; 6. insurance companies; 7. credit unions and their affiliates and subsidiaries (same exception); 8. Residential Mortgage License Act licensees for authorized activity; 9. retail sellers collecting their own retail installment contracts or charge agreements; 10. condominium unit owners' associations and their agents collecting assessments; 11. persons under contract with a creditor to notify debtors using only the creditor's name; 12. Sales Finance Agency Act licensees collecting purchased accounts or loans they made; 13. Student Loan Servicing Act licensees; 14. Consumer Installment Loan Act licensees collecting loans they originated; 15. Interest Act lenders collecting loans they originated; 16. motor vehicle retail sellers collecting their own contracts; 17. Consumer Legal Funding Act licensees; 18. Pawnbroker Regulation Act of 2023 licensees; 19. any person identified by the Department by rule. Plus the 205 ILCS 740/4 interstate-communication reciprocity exemption.
City and county licenses
- City of ChicagoChicago Department of Business Affairs and Consumer Protection (BACP), Regulated Business License - Debt Collectors, Municipal Code of Chicago 4-6-160
Ordinance O2012-8555 (effective July 1, 2013) added MCC 4-6-160: 'Debt collector' means any person who in the ordinary course of business, on behalf of himself or others, regularly engages in consumer debt collection; excludes any person exempt under section 2.03 of the Illinois Collection Agency Act (the ordinance still cites 225 ILCS 425/2.03). 'Debtor' means any natural person who resides in the city. MCC 4-6-010(a): a regulated business license 'shall be required for the business activities set forth in this chapter. A separate license shall be required for each separate business location.' Duties: written validation notice within 5 days, itemized statement of account, per-debtor files; fines $250 to $2,500 first offense, $500 to $5,000 thereafter; 4-year bar after revocation. FEE NOT VERIFIED: pass A read MCC 4-5-010 (amlegal) as 'Regulated Business License (4-6) $1,000.00' per two-year term as of January 1, 2026 with CPI adjustment from 2027; pass B's figure of $250.00 per location for a two-year term comes from BACP's fact sheet dated 11.19.13. The reconciler could not reach the current MCC 4-5-010 (amlegal returned HTTP 403; municode renders client-side) and only re-read the 2013 fact sheet, so no fee amount should be published until MCC 4-5-010 is read directly. Also open: whether BACP requires the license of out-of-city agencies with no Chicago business location (the definition keys on debtor residence; the license keys on 'business location').
Regulator page
How long can a debt be sued on in Illinois?
Illinois treats credit card debt as an unwritten contract with a five-year limit, and debt buyers are barred by statute from suing on time-barred consumer debt. Whether a partial payment revives a time-barred card debt is unsettled in Illinois, and consumer-debt judgments entered from 2026 onward last 15 years and cannot be revived.
“actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing and actions brought under the Illinois Wage Payment and Collection Act shall be commenced within 10 years next after the cause of action accrued”
“actions on unwritten contracts, expressed or implied, or on awards of arbitration, ... and all civil actions not otherwise provided for, shall be commenced within 5 years next after the cause of action accrued.”
“a cause of action on a promissory note payable at a definite date accrues on the due date or date stated in the promissory note or the date upon which the promissory note is accelerated.”
“Accordingly, the contract at issue is considered to be an oral contract for purposes of the statute of limitations and the five-year period of section 13-205 applies.”
Illinois appellate courts put credit-card debt in the unwritten-contract category (5 years, 13-205), not the written-contract category (10 years, 13-206). Feltman (1st Dist. May 20, 2009): 'A contract will only be deemed written if parties are identified and all the essential terms are in writing and ascertainable from the instrument itself. If resort to parol evidence is necessary to identify the parties or essential terms, the contract is considered an oral contract'; a signed application plus cardholder agreements plus statements did not suffice (composite-document theory rejected). Cach v. Moore (2d Dist. 2019), para. 12, follows Feltman: 'each time a credit card is used, a separate contract is formed ... This is considered an oral contract, subject to the five-year limitations period set forth in section 13-205.' No Illinois Supreme Court decision found; the First and Second Districts agree. 10 years applies only where the creditor holds a signed writing containing all essential terms. Debt buyers are also barred by statute from suing outside the SOL: 205 ILCS 740/8.6(a) (formerly 225 ILCS 425/8.6).
“no judgment shall be enforced after the expiration of 7 years from the time the same is rendered, except upon the revival of the same by a proceeding provided by Section 2-1601 of this Act ... Consumer debt judgments may be revived or enforced in accordance with subsection (a-10) of Section 2-1602.”
Both 13-205 and 13-206 run from when 'the cause of action accrued'. Promissory notes: 13-206 fixes accrual at the stated due date or acceleration; demand notes at demand, and barred if no principal or interest paid and no demand made for 10 continuous years. Credit cards: Cach v. Moore, 2019 IL App (2d) 180707, paras. 12-13: no rule that the period runs from last use; 'a limitations period begins to run when a party has the right to invoke the aid of the court and to enforce his remedy', i.e., delinquency or default, which the defendant must prove as an affirmative defense; the court left open whether a later partial payment restarts it. Feltman measured from last account activity. Illinois has no bright-line statute for card accrual; the practical trigger is the first missed payment or default.
“but 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.”
“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.”
'When a cause of action has arisen in a state or territory out of this State, or in a foreign country, and, by the laws thereof, an action thereon cannot be maintained by reason of the lapse of time, an action thereon shall not be maintained in this State.' One-way bar with no resident exception; does not lengthen the Illinois period.
The debt exists but cannot be sued on; a suit can be defended by raising the defense.
“Debt buyers initiating actions upon an obligation arising out of a consumer debt shall be commenced within the applicable statute of limitations period.”
Both passes read the whole Collection Agency Act: 8.6(a) bars debt buyers from suing on time-barred consumer debt and 9(a)(24) bars 'attempting or threatening to enforce a right or remedy with knowledge or reason to know that the right or remedy does not exist', but no section requires a time-barred-debt disclosure in collection communications. Ill. S. Ct. Rule 280.2 requires a litigation affidavit stating charge-off date and date of last payment, a pleading rule, not a communications disclosure. Only federal Reg. F 12 CFR 1006.26(b) applies. Negative finding.
Written instruments (13-206): yes by statute, a payment or new promise 'in writing ... within or after the period of 10 years' opens a fresh 10-year window, so an already-barred written debt is revived; the bar is a defense to the remedy, not extinguishment. Illinois common law on notes says the same: 'A partial payment on the debt, made by the party originally chargeable ... implies a new promise by the debtor to pay the debt and this is equally true whether the payment is before or after the bar of the statute of limitations has become complete' (Metcalf, quoting Kallenbach, as quoted in Joseph v. Carter, read on the Caselaw Access Project); the payment need not be in writing but must be by or with the assent of the debtor. Unwritten contracts and credit cards (13-205): the statute is silent, every Illinois case located applying the part-payment rule involved a promissory note, and Cach v. Moore expressly did not reach it ('we need not determine whether either of the defendant's August 2012 payments tolled it'). Whether a payment revives a barred 13-205 card debt is unresolved.
Where this page comes from.
Researched in two independent passes from primary sources (the statute, the administrative code and the regulator's own pages), then reconciled against the text where the passes disagreed. Verified 2026-09-20. Licensing is re-verified quarterly and limitation periods annually.
- www.ilga.gov/Legislation/ILCS/Articles?ActID=4292&ChapterID=20
- ilga.gov/Legislation/ILCS/Articles?ActID=4292&ChapterID=20&Chapter=FINANCIAL+REGULATION&MajorTopic=REGULATION
- ilga.gov/Legislation/ILCS/Articles?ActID=1355&ChapAct=225%C2%A0ILCS%C2%A0425%2F&ChapterID=24&ChapterName=PROFESSIONS+AND+OCCUPATIONS&ActName=Collection+Agency+Act.
- www.ilga.gov/documents/legislation/publicacts/104/PDF/104-0149.pdf
- www.ilga.gov/documents/legislation/publicacts/104/PDF/104-0297.pdf
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- ilga.gov/agencies/JCAR/Sections?PartID=03800150&TitleDescription=TITLE%2038:%20FINANCIAL%20INSTITUTIONS
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- www.chicago.gov/content/dam/city/depts/bacp/ordinances/Debt_Collector_Ordinance.pdf
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- law.justia.com/codes/illinois/chapter-735/act-735-ilcs-5/article-xiii/
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- law.justia.com/codes/illinois/chapter-735/act-735-ilcs-5/article-ii/
- codes.findlaw.com/il/chapter-735-civil-procedure/il-st-sect-735-5-13-206/
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- static.case.law/ill/179/cases/0326-01.json
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Resolvah enforces the Illinois rules at the point of contact.
Licensing by state, time-barred rules, call frequency and consent, checked before anything sends. See it on your own portfolio.
