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Wednesday, February 15, 2012

Municipalities Can Collect Outstanding Debt through Local Debt Recovery Program

A new law authorizes Illinois municipalities, school districts, and public universities to enter into intergovernmental agreements with the state comptroller’s office to collect delinquent debts such as outstanding fines or fees, property code violations, parking tickets, and other local obligations.  Public Act 97-0632 became effective on January 1, 2012.

Pursuant to the intergovernmental agreement with the state, the municipality will notify the state comptroller of delinquent debt the municipality wants the state to collect.  The state comptroller deducts from a debtor's state income tax refund, payroll check, or other state payment the amount due to the municipality for the local debt.  The comptroller then deposits the deducted amount into the comptroller debt recovery trust fund and notifies the debtor of his or her right to contest the deduction.  If the debtor fails to object within 60 days, or if the hearing officer rules against the debtor, then the comptroller will pay the collected debt amount to the municipality, minus an administrative fee. 

Although there are a few administrative and procedural hurdles to clear before a debt can be collected through this process, this legislation does offer municipalities an additional tool in collecting outstanding local debt.    
Post Authored by Julie Tappendorf, Ancel Glink

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