2023 Illinois Compiled Statutes › Chapter 205 - FINANCIAL REGULATION › 205 ILCS 665/ - Debt Management Service Act.

(205 ILCS 665/1) (from Ch. 17, par. 5301)
Sec. 1. 
		Declaration of policy. 
		
The business of
providing debt
management services to
individuals is a matter of public interest and concern and is subject to
regulation and control in the public interest.
(Source: P.A. 90-545, eff. 1-1-98.)
(205 ILCS 665/1.5)
Sec. 1.5. Purpose and construction. The purpose of this Act is to protect consumers who enter into agreements with debt management service providers and to regulate debt management service providers.  This Act shall be construed as a consumer protection law for all purposes. This Act shall be liberally construed to effectuate its purpose.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/2) (from Ch. 17, par. 5302)
Sec. 2. Definitions. As used in this Act:
"Credit counselor" means an individual, corporation, or other entity that is not a debt management service that provides (1) guidance, educational programs, or advice for the purpose of addressing budgeting, personal finance, financial literacy, saving and spending practices, or the sound use of consumer credit; or (2) assistance or offers to assist individuals and families with financial problems by providing counseling; or (3) a combination of the activities described in items (1) and (2) of this definition.
"Debt management
service" means
the planning and management of the financial affairs of
a debtor for a fee and the receiving
of money
from the debtor for the purpose
of distributing it to the debtor's creditors in payment or partial payment of
the debtor's obligations or soliciting financial contributions from creditors.
The business of debt management is conducted in this State if the debt
management business, its employees, or its agents are located in this State or
if the
debt management business solicits or contracts with debtors located in this
State. "Debt management service" does not include "debt settlement service" as defined in the Debt Settlement Consumer Protection Act.
This term shall not include the following when engaged in
the regular course of their respective businesses and professions:
(a) Attorneys  at law licensed, or otherwise     authorized to practice, in Illinois who are engaged in the practice of law.
(b) Banks, operating subsidiaries of banks,     affiliates of banks, fiduciaries, credit unions, savings and loan associations, and savings banks as duly authorized and admitted to transact business in the State of Illinois and performing credit and financial adjusting service in the regular course of their principal business.
(c) Title insurers, title agents, independent     escrowees, and abstract companies, while doing an escrow business.
(d) Judicial officers or others acting pursuant to     court order.
(e) Employers for their employees, except that no     employer shall retain the services of an outside debt management service to perform this service unless the debt management service is licensed pursuant to this Act.
(f) Bill payment services, as defined in the     Transmitters of Money Act.
(g) Credit counselors, only when providing services     described in the definition of credit counselor in this Section.
"Debtor" means the person or persons for whom the debt
management service is performed.
"Person" means an individual, firm, partnership,
association, limited liability company,
corporation, or not-for-profit corporation.
"Licensee" means a person licensed under this Act.
"Secretary" means the Secretary of Financial and Professional Regulation.
(Source: P.A. 100-201, eff. 8-18-17.)
(205 ILCS 665/3) (from Ch. 17, par. 5303)
Sec. 3. 
		Requirement of license. 
		It shall be unlawful for any person to
operate a debt management service or
engage in that
business as herein defined except as authorized by this Act and without
first having obtained a license as hereinafter provided.
(Source: P.A. 90-545, eff. 1-1-98.)
(205 ILCS 665/4) (from Ch. 17, par. 5304)
Sec. 4. Application for license. Application for a license to engage in the debt
management
service
business in this State shall be made to the Secretary and shall
be in writing, under oath, and in the form prescribed by the Secretary.
Each applicant, at the time of making such application, shall pay to the
Secretary the sum of $30.00 as a fee for investigation of the applicant, and
the additional sum of $100.00 as a license fee.
Every applicant shall submit to the Secretary, at the time of the
application for a license, a bond to be approved by the Secretary in which
the applicant shall be the obligor, in the sum of $25,000 or
such additional amount as required by the Secretary based on the amount of
disbursements made by the
licensee in the
previous year, and in which an
insurance company, which is duly authorized by the State of Illinois, to
transact the business of fidelity and surety insurance shall be a surety.
The bond shall run to the Secretary for the use of
the Department or
of any person or persons who may have a cause of action against the obligor
in said bond arising out
of any violation of this
Act or rules by a license.
Such
bond
shall be conditioned that the obligor will faithfully conform to
and abide
by the provisions of this Act and of all rules, regulations and directions
lawfully made by the Secretary and will pay to the Secretary or to
any person or persons any and all money that may become due or owing
to the State or to such person or persons, from said obligor under and by
virtue of the provisions of this Act.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/5) (from Ch. 17, par. 5305)
Sec. 5. Qualifications for license. Upon the filing of the application and
the approval of the bond and the payment of the specified fees, the Secretary may issue a license if he finds:
(1) That the financial responsibility, experience, character and general
fitness of the applicant, the managers thereof, if the applicant is a limited
liability company, the partners thereof, if the applicant is a partnership, and
of the officers and directors thereof, if the applicant is a corporation or a
not-for-profit corporation, are such as to command the confidence of the
community and to warrant belief that the business will be operated fairly,
honestly and efficiently within the purposes of this Act, and
(2) That the applicant, if an individual, the managers thereof, if the
applicant is a limited liability company, the partners thereof, if the
applicant is a partnership, and the officers and directors thereof, if the
applicant is a corporation, have not been convicted of a felony or a
misdemeanor involving dishonesty or untrustworthiness, and
(3) That the person or persons have not had a record of having defaulted in
the payment of money collected for others, including the discharge of such
debts through bankruptcy proceedings, and
(4) The applicant, or any officers, directors, partners or managers, have
not previously violated any provision of this Act or any rule lawfully made
by the Secretary, and
(5) The applicant has not made any false statement or representation to the
Secretary in applying for a license hereunder.
The Secretary shall deliver a license to the applicant to engage in the debt
management service business in accordance with the provisions of this Act at
the location specified in the said application, which license shall remain in
full force and effect until it is surrendered by the licensee or revoked by the
Secretary as herein provided; provided, however, that each license shall expire
by the terms thereof on January 1 next following the issuance thereof unless
the same be renewed as hereinafter provided.  A license, however, may not be
surrendered without the approval of the Secretary.
More than one license may be issued to the same person for separate
places of business, but separate applications shall be made for each location conducting business with Illinois residents.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/6) (from Ch. 17, par. 5306)
Sec. 6. Renewal of license. Each debt management service provider under the provisions of this Act may
make application to the
Secretary for renewal of its license, which
application for renewal shall be on the form prescribed by the Secretary and
shall be accompanied by a fee of $100.00 together with a bond or other
surety as required, in a minimum amount of $25,000 or such an amount as
required by the Secretary based on the amount of disbursements made by the
licensee in the previous year.  The application must be received by the
Department no later than December 1 of the year preceding the year for which
the application applies.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/7) (from Ch. 17, par. 5307)
Sec. 7. License, display and location. Each license issued shall be kept conspicuously posted in the
place of business of the debt management service provider. The business
location may be changed by any licensee upon
10 days prior written notice to the Secretary.
A license must operate under the name as stated in its original
application.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/8.5)
Sec. 8.5. Temporary location. The Secretary may approve a temporary
additional business location for the purpose of allowing a debt management service provider to conduct
business outside the licensed location.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/9) (from Ch. 17, par. 5309)
Sec. 9. Denial of license. Any application for a license shall be approved or denied
within 60 days of the filing of a completed application with the Secretary.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/10) (from Ch. 17, par. 5310)
Sec. 10. Revocation, suspension, or refusal to renew license.
(a) The Secretary may revoke or suspend or refuse to renew any license if he finds that:
(1) any licensee has failed to pay the annual license     fee, or to maintain in effect the bond required under the provisions of this Act;
(2) the licensee has violated any provisions of this     Act or any rule, lawfully made by the Secretary within the authority of this Act;
(3) any fact or condition exists which, if it had     existed at the time of the original application for a license, would have warranted the Secretary in refusing its issuance; or
(4) any applicant has made any false statement or     representation to the Secretary in applying for a license hereunder.
(b) In every case in which a license is suspended or revoked or an
application for a license or renewal of a license is denied, the Secretary shall
serve notice of his action, including a statement of the reasons for his
actions, either personally or by certified mail, return receipt requested.
Service by mail shall be deemed completed if the notice is deposited in the
U.S. Mail.
(c) In the case of a denial of an application or renewal of a license,
the applicant or licensee may request in writing, within
30 days after the date of service, a hearing.  In the case of a denial of a
renewal of a license, the license shall be deemed to continue in force until 30
days after the service of the notice of denial, or if a hearing is requested
during that period, until a final administrative order is entered.
(d) An order of revocation or suspension of a license shall take effect upon
service of the order unless the licensee requests, in writing, within 10 days
after the date of service, a hearing. In the event a hearing is requested, the
order shall be stayed until a final administrative order is entered.
(e) If the licensee requests a hearing, the Secretary shall schedule either a status date or a 
hearing within 30 days after the request for a hearing unless otherwise agreed
to by the parties.
(f) The hearing shall be held at the time and place designated by the
Secretary.  The Secretary and any administrative law judge designated by him have
the power to administer oaths and affirmations, subpoena witnesses and compel
their attendance, take evidence, and require the production of books, papers,
correspondence, and other records or information that he considers relevant or
material to the injury.
(g) The costs for the administrative hearing shall be set by rule and shall be borne by the respondent.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/11) (from Ch. 17, par. 5311)
Sec. 11. Contracts, books, records and contract cancellation. Each debt management service provider shall furnish to the Secretary, when requested, a copy of
the contract entered into between the debt management service provider and the debtor. The
debt management service provider shall furnish the debtor with a copy of the written contract, at the
time of execution,
which shall set forth the charges, if any, agreed upon for the services of
the debt management service provider.
Each debt management service provider shall maintain records and accounts which will
enable any debtor contracting with the debt management service provider, at any
reasonable
time, to ascertain the amounts paid to creditors of the debtor. A
statement showing the total amount received and the total disbursements to
each creditor shall be furnished by the debt management service provider to any individual within
seven days of a request therefor by the said debtor. Each
debt management service provider shall issue a receipt for each payment made by the
debtor at a debt management service provider's office. Each debt management service provider 
shall prepare and
retain in the
file of each debtor a written analysis of debtor's income and expenses to
substantiate that the plan of payment is feasible and practical.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/11.5)
Sec. 11.5. Examination of debt management service provider. The Secretary at any time, either in
person or through an appointed representative, may examine the condition and
affairs of a
debt management service provider.  In connection with any
examination, the Secretary may examine on oath any debt management service provider and
any
director,
officer, employee, customer, manager, partner, member, creditor or stockholder
of a licensee concerning the affairs and business of the debt management service provider.  The
Secretary shall ascertain whether the debt management service provider transacts its business in the
manner prescribed by law and the rules issued thereunder.  The
debt management service provider shall pay the cost of the examination as determined by the Secretary by
administrative rule.  Failure to pay the examination fee within 30 days after
receipt of demand from the Secretary may result in the suspension of the license
until the fee is paid.  The Secretary shall have the right to investigate and
examine any person, whether licensed or not, who is engaged in the debt
management service business.  The Secretary shall have the power to subpoena the
production of any books and records pertinent to any investigation.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/12) (from Ch. 17, par. 5312)
Sec. 12. Fees and charges of debt management service providers.  A debt management service provider may not charge a debtor any
fees or penalties except the following:
(1) an initial counseling fee not to exceed $50 per     debtor counseled; and
(2) additional fees at the completion of the initial     counseling services which shall not exceed $50 per month.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/12.1)
Sec. 12.1. 
All moneys received by the Department of Financial Institutions
under this Act, except moneys received for the Debt Management Service Consumer Protection Fund, shall be deposited in the Financial Institution Fund created
under Section 6z-26 of the State Finance Act.
(Source: P.A. 98-463, eff. 8-16-13.)
(205 ILCS 665/13) (from Ch. 17, par. 5313)
Sec. 13. Prohibitions.
(1) No licensee shall advertise, in any manner whatsoever, any statement
or
representation with regard to the rates, terms or conditions of debt management
service which is false, misleading, or deceptive.
(2) No licensee shall require as a part of the agreement between the
licensee and any debtor, the purchase of any stock, insurance, commodity,
service or other property or any interest therein.
(3) No licensee shall, directly or indirectly, accept payment or any other
consideration, whether in cash or in kind, from any entity for referring
applicants to that entity.  The licensee shall not, directly or indirectly,
make payments in any form, whether in cash or in kind, to any person,
corporation, or other entity for referring applicants or clients to the
licensee.
(4) No licensee shall make any loans.
(5) No licensee shall issue credit cards or act as an agent in procuring
customers for a credit card company or any financial institution.
(6) No licensee shall act as a loan broker.
(7) No licensee shall operate any other business at the licensed location.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/13.5)
Sec. 13.5. (Repealed).
(Source: P.A. 90-545, eff. 1-1-98. Repealed by P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/14) (from Ch. 17, par. 5314)
Sec. 14. Trust funds; requirements and restrictions.
(a) All funds received by a debt management service provider or his agent from and for the purpose
of paying bills, invoices, or accounts of a debtor shall constitute trust funds
owned by and belonging to the debtor from whom they were received.  All such
funds received by a debt management service provider shall be separated from the funds of the debt management service provider 
not later than the end of the business day following receipt by the
debt management service provider.  All such funds shall be kept separate and apart at all times from
funds belonging to the debt management service provider or any of its officers, employees or agents and
may be used for no purpose other than paying bills, invoices, or accounts of
the debtor.  All such trust funds received at the main or branch offices of a
debt management service provider shall be deposited in a bank in an account in the name of the debt management service provider 
designated "trust account", or by some other appropriate name indicating that
the funds are not the funds of the debt management service provider or its officers, employees, or
agents, on or before the close of the business day following receipt.
(b) If a consumer's funds are kept in an interest earning trust account, then any interest earned on the consumer funds shall belong to the consumer.  If multiple consumers funds are kept in a single interest earning trust account, then the interest earned shall belong to the consumers and shall be deposited pro rata among the consumers whose funds are in the account.  Such funds are not subject to
attachment, lien, levy of execution, or sequestration by order of court except
by a debtor for whom a licensee is acting as an agent in paying bills,
invoices, or accounts.
(c) Each debt management service provider shall make remittances within 30 days after
initial receipt of funds, and thereafter remittances shall be made within
15 days of receipt, less fees and costs, unless the reasonable
payment of one or more of the debtor's obligations requires that the funds
be held for a longer period so as to accumulate a sum certain.
(d) At least once every quarter, the debt management service provider shall render an accounting to
the debtor which shall itemize the total amount received from the debtor, the
total amount paid each creditor, the amount of charges deducted, and any amount
held in reserve.  A debt management service provider shall, in addition thereto, provide such an
accounting to a debtor within 7 days after written demand, but not more
than 3 times per 6 month period.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/15) (from Ch. 17, par. 5315)
Sec. 15. Rules.)
The Secretary shall make and enforce all
reasonable rules  as shall be necessary for the
administration of this Act. Such rulemaking shall be subject to the provisions
of the Illinois Administrative Procedure Act.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/15.1)
Sec. 15.1. (Repealed).
(Source: P.A. 90-545, eff. 1-1-98. Repealed by P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/15.2)
Sec. 15.2. (Repealed).
(Source: Laws 1965, p. 2494. Repealed by P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/15.3)
Sec. 15.3. (Repealed).
(Source: P.A. 90-545, eff. 1-1-98. Repealed by P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/16) (from Ch. 17, par. 5319)
Sec. 16. Penalties.
(a) Any person who engages in the business of debt management service
without a license shall be guilty of a Class 4 felony.
(b) Any contract of debt management service as defined in this Act, made by
an unlicensed
person, shall be null and void and of no legal effect.
(c) The Secretary may, after 10 days notice by registered mail to the debt management service provider at the address on the license or unlicensed entity engaging in the debt management service business, stating the contemplated action and in general the grounds therefore, fine that debt management service provider or unlicensed entity an amount not exceeding $10,000 per violation, and revoke or suspend any license issued if he or she finds that either:
(1) the debt management service provider or     unlicensed entity has failed to comply with any provision of this Act or any order, decision, finding, rule, regulation, or direction of the Secretary lawfully made pursuant to the authority of this Act; or
(2) any fact or condition exists which, if it had     existed at the time of the original application for the license, clearly would have warranted the Secretary in refusing to issue the license.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/16.5)
Sec. 16.5.  Additional liability for unlicensed activity. Any person who, without the required license, engages in conduct requiring a license under this Act, shall be liable to the Department in an amount equal to the greater of (1) $1,000 or (2) an amount equal to 4 times the amount of consumer debt enrolled.  The Department shall cause any funds so recovered to be deposited in the Debt Management Service Consumer Protection Fund.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/16.6)
Sec. 16.6. Debt Management Service Consumer Protection Fund.
(a) A special non-appropriated income-earning fund is hereby created in the State Treasury, known as the Debt Management Service Consumer Protection Fund. This Fund is not subject to appropriation by the Illinois General Assembly.
(b) All moneys paid into the Fund together with all accumulated, undistributed interest thereon shall be held as a special Fund in the State Treasury. All interest earned on the Fund is non-distributable and shall be returned to the Fund, and shall be invested and re-invested in the Fund by the Treasurer or his or her designee. The Fund shall be used solely for the purpose of providing restitution to consumers who have suffered monetary loss arising out of a transaction regulated by this Act.
(c) The Fund shall be applied only to restitution when restitution has been ordered by the Secretary. Restitution shall not exceed the amount actually lost by the consumer. The Fund shall not be used for the payment of any attorney or other fees.
(d) The Fund shall be subrogated to the amount of the restitution, and the Secretary shall request the Attorney General to engage in all reasonable collection steps to collect restitution from the party responsible for the loss and reimburse the Fund.
(e) Notwithstanding any other provision of this Section, the payment of restitution from the Fund shall be a matter of grace and not of right, and no consumer shall have any vested rights in the Fund as a beneficiary or otherwise. Before seeking restitution from the Fund, the consumer or beneficiary seeking payment of restitution shall apply for restitution on a form provided by the Secretary. The form shall include any information the Secretary may reasonably require in order to determine that restitution is appropriate.  All documentation required by the Secretary, including the form, is subject to audit. Distributions from the Fund shall be made solely at the discretion of the Secretary, except that no payments or distributions may be made under any circumstance if the Fund is depleted.
(f) All deposits to this Fund shall be made pursuant to Section 16.5 of this Act.
(g) Notwithstanding any other law to the contrary, the Fund is not subject to administrative charges or charge-backs that would in any way transfer moneys from the Fund into any other fund of the State.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/17) (from Ch. 17, par. 5320)
Sec. 17. Injunction. To engage in debt management service, render financial service, or accept debtors'
funds, as defined
in this Act, without a valid license so to do, is hereby declared
to be
inimical to the public welfare and to constitute a public nuisance.  The
Secretary may, in the name of the people of the State of Illinois, through
the Attorney General of the State of Illinois, file a complaint for
an injunction in the circuit court to enjoin such person,
from
engaging in said business.  Such injunction proceeding shall
be in addition to, and not in lieu of, penalties and remedies otherwise in this
Act provided.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/18) (from Ch. 17, par. 5321)
Sec. 18. Review. All final administrative decisions of the Secretary hereunder shall be
subject to judicial review pursuant to the provisions of the Administrative
Review Law, and all amendments and
modifications thereof and the rules adopted pursuant thereto.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/19) (from Ch. 17, par. 5322)
Sec. 19. 
		
		If any clause, sentence, section, provision or part of this Act
shall be adjudged to be unconstitutional or invalid for any reason by any
court of competent jurisdiction, such judgment shall not impair, affect
or invalidate the remainder of this Act which shall be in full force and
effect thereafter.
(Source: Laws 1957, p. 2164.)
(205 ILCS 665/20) (from Ch. 17, par. 5323)
Sec. 20. Cease and desist orders.
(a) The Secretary may issue a cease and desist order to any
licensee, or other person doing business without the required license, when in
the opinion of the Secretary, the licensee, or other person, is violating or is
about to violate any provision of the Act or any rule or condition imposed in
writing by the Department.
(b) The Secretary may issue a cease and desist order prior to a hearing.
(c) The Secretary shall serve notice of his action, including a statement of
the reasons for his action either personally or by certified mail, return
receipt requested.  Service by mail shall be deemed completed if the notice is
deposited in the U.S. Mail.
(d) Within 10 days
after
service of the cease and desist order, the licensee or
other person may request, in writing, a hearing.
(e) The Secretary shall schedule either a status date or a hearing within 30 days after the request
for a hearing unless otherwise agreed to by the parties.
(g) If it is determined that the Secretary had the authority to issue the
cease and desist order, he may issue such orders as may be reasonably necessary
to correct, eliminate, or remedy such conduct.
(h) The powers vested in the Secretary by this Section are additional
to any and all other powers and remedies vested in the Secretary by law, and
nothing in this Section shall be construed as requiring that the Secretary shall
employ the power conferred in this Section instead of
or
as a condition precedent
to the exercise of any other power or remedy vested in the Secretary.
(i) The cost for the administrative hearing shall be set by rule and shall be borne by the respondent.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/20.5)
Sec. 20.5. Receivership.
(a) If the Secretary determines that a licensee is insolvent or is violating
this Act,
he or she may appoint a receiver. Under the direction of the Secretary, the
receiver shall,
for the purpose of receivership, take possession of and title to the books,
records, and
assets of the licensee. The Secretary may require the receiver to provide
security in an
amount the Secretary deems proper. Upon appointment of the receiver, the
Secretary shall
have published, once each week for 4 consecutive weeks in a newspaper having a
general
circulation in the community, a notice informing all persons who have claims
against the
licensee to present them to the receiver. Within 10 days after the receiver
takes
possession, the licensee may apply to the Circuit Court of Sangamon County to
enjoin
further proceedings. The receiver may operate the business until the Secretary 
determines
that possession should be restored to the licensee or that the business should
be
liquidated.
(b) If the Secretary determines that a business in receivership should be
liquidated,
he or she shall direct the Attorney General to file a complaint in the Circuit
Court of the
county in which the business is located, in the name of the People of the State
of Illinois,
for the orderly liquidation and dissolution of the business and for an
injunction restraining
the licensee and its officers and directors from continuing the operation
of the business.
Within 30 days after the day the Secretary determines that the business
should be
liquidated, the receiver shall file
with the Secretary and with the clerk of the court that has charge
of the liquidation
a correct list of all
creditors, as shown by
the licensee's books and records,
who
have not presented their claims.
The list shall state the amount of the claim after allowing all
just credits, deductions, and
set-offs as shown by the licensee's books. These claims
shall be deemed proven unless
some interested party files an objection within the time fixed by the Secretary 
or court that
has charge of the liquidation.
(c) The General Assembly finds and declares that debt management services
provide an important service to Illinois citizens. It is therefore
declared to be the
policy of this State that customers who receive these services must be
protected from
interruptions of services. To carry out this policy and to insure that
customers of a
licensee are protected if it is determined that a business in receivership
should be
liquidated, the Secretary shall make a distribution of moneys collected by the
receiver in
the following order of priority:
(1) Allowed claims for the actual necessary expenses     of the receivership of the business being liquidated, including:
(A) reasonable receiver's fees and receiver's         attorney's fees approved by the Secretary;
(B) all expenses of any preliminary or other         examinations into the condition of the receivership;
(C) all expenses incurred by the Secretary that         are incident to possession and control of any property or records of the licensee's business; and
(D) reasonable expenses incurred by the Secretary         as the result of business agreements or contractual arrangements necessary to insure that the services of the licensee are delivered to the community without interruption. These business agreements or contractual arrangements may include, but are not limited to, agreements made by the Secretary, or by the receiver with the approval of the Secretary, with banks, bonding companies, and other types of financial institutions.
(1.5) Secured claims.
(2) Allowed unsecured claims for wages or salaries,     excluding vacation, severance, and sick leave pay earned by employees within 90 days before the appointment of a receiver.
(3) Allowed unsecured claims of any tax, and interest     and penalty on the tax.
(4) Allowed unsecured claims, other than a kind     specified in items (1), (2), and (3) of this subsection, filed with the Secretary within the time the Secretary  fixes for filing claims.
(5) Allowed unsecured claims, other than a kind     specified in items (1), (2), and (3) of this subsection, filed with the Secretary after the time fixed for filing claims by the Secretary.
(6) Allowed creditor claims asserted by an owner,     member, or stockholder of the business in liquidation.
(7) After one year from the final dissolution of the     licensee's business, all assets not used to satisfy allowed claims shall be distributed pro rata to the owner, owners, members, or stockholders of the business.
The Secretary shall pay all claims of equal priority according to the schedule
established in this subsection and shall not pay claims of lower priority until
all higher
priority claims are satisfied. If insufficient assets are available to meet all
claims of equal
priority, those assets shall be distributed pro rata among those claims. All
unclaimed
assets of a licensee and the licensee's business shall be deposited with the
Secretary to be
paid out when proper claims are presented to the Secretary.
(d) Upon the order of the circuit court of the county in which the business
being
liquidated is located, the receiver may sell or compound any bad or doubtful
debt, and on
like order may sell the personal property of the business on such terms as the
court
approves. The receiver shall succeed to whatever rights or remedies the
unsecured
creditors of the business may have against the owner or owners, operators,
stockholders,
directors, members, managers, or officers, arising out of their claims
against the
licensee's business, but nothing contained in this Section shall prevent those
creditors
from filing their claims in the liquidation proceeding. The receiver may
enforce those
rights or remedies in any court of competent jurisdiction.
(e) At the close of a receivership, the receiver shall turn over to the
Secretary all
books of account and ledgers of the business for preservation. The Secretary 
shall hold all
records of receiverships received at any time for a period of 2 years after the
close of the
receivership. The records may be destroyed at the termination of the 2-year
period. All
expenses of the receivership including, but not limited to, reasonable
receiver's and
attorney's fees approved by the Secretary, all expenses of any preliminary or
other
examinations into the condition of the licensee's business or the
receivership, and all
expenses incident to the possession and control of any property or records of
the business
incurred by the Secretary shall be paid out of the assets of the licensee's
business. These
expenses shall be paid before all other claims.
(f) Upon the filing of a complaint by the Attorney General for the orderly
liquidation and dissolution of a debt management service provider's business, as provided in this Act,
all pending
suits and actions upon unsecured claims against the business shall abate.
Nothing
contained in this Act, however, prevents these claimants from filing their
claims in the
liquidation proceeding. If a suit or an action is instituted or maintained by
the receiver on
any bond or policy of insurance issued pursuant to the requirements of this
Act, the
bonding or insurance company sued shall not have the right to interpose or
maintain any
counterclaim based upon subrogation, upon any express or implied agreement of,
or right
to, indemnity or exoneration, or upon any other express or implied agreement
with, or
right against, the debt management service provider's business. Nothing contained in this Act prevents
the bonding
or insurance company from filing this type of claim in the liquidation
proceeding.
(g) A debt management service provider may not terminate its affairs and close up its business
unless it has
first deposited with the Secretary an amount of money equal to all of its debts,
liabilities,
and lawful demands against it including the costs and expenses of a proceeding
under this
Section, surrendered to the Secretary its license, and filed with the Secretary a
statement of
termination signed by the debt management service provider containing a pronouncement of intent to
close up its
business and liquidate its liabilities and containing a sworn list itemizing in
full all of its
debts, liabilities, and lawful demands against it.  Corporate licensees must
attach to,
and make a part of the statement of termination, a copy of a resolution
providing for the
termination and closing up of the licensee's affairs, certified by the
secretary of the
licensee and duly adopted at a shareholders' meeting by the holders of at least
two-thirds
of the outstanding shares entitled to vote at the meeting. Upon the filing with
the Secretary 
of a statement of termination, the Secretary shall cause notice of that action
to be published
once each week for 3 consecutive weeks in a public newspaper of general
circulation
published in the city or village where the business is located, and if no
newspaper is
published in that place, then in a public newspaper of general circulation
nearest to that
city or village. The publication shall give notice that the debts,
liabilities, and lawful
demands against the business will be redeemed by the Secretary upon demand in
writing
made by the owner thereof, at any time within 3 years after the date of first
publication.
After the expiration of the 3-year period, the Secretary shall return to the
person or persons
designated in the statement of termination to receive repayment, and in the
proportion
specified in that statement, any balance of money remaining in his or her
possession after
first deducting all unpaid costs and expenses incurred in connection with
a
proceeding under this Section. The Secretary shall receive for his or her
services, exclusive
of costs
and expenses, 2% of any amount up to $5,000 and 1% of any amount in excess of
$5,000 deposited
with him or her under this Section by any business. Nothing contained
in this
Section shall affect or impair the liability of any bonding or insurance
company on
any bond
or insurance policy issued under this Act relating to the business.
(Source: P.A. 96-1420, eff. 8-3-10.)
(205 ILCS 665/21) (from Ch. 17, par. 5324)
Sec. 21. 
		Effective date. 
		This Act shall become effective on the first day of January 1958.
(Source: Laws 1957, p. 2164.)
(205 ILCS 665/22) (from Ch. 17, par. 5325)
Sec. 22. 
		Title of Act. 
		This Act may be cited as the Debt Management Service Act.
(Source: P.A. 90-545, eff. 1-1-98.)