Illinois Collection Agency Bond

Overview

Illinois collection agencies post a $25,000 surety bond under Section 8 of the Collection Agency Act — a statute worth reading closely because it recently moved. The Act, formerly cited as 225 ILCS 425, is now codified at 205 ILCS 740, and Section 8 requires every collection agency to file and maintain a surety bond issued by an insurance company authorized to transact fidelity and surety business in Illinois. The bond is continuous in form, runs concurrently with each license period, and exists for the benefit of creditors who obtain a judgment based on the agency's failure to remit money collected on their behalf.

Who Needs This Bond?

Collection agencies licensed in Illinois — third-party collectors, debt buyers within the Act's scope, and firms collecting accounts for creditors — file this bond with the state as a condition of licensure under the Collection Agency Act. New applicants include the bond with their application, and licensed agencies must keep it in force without interruption because the statute requires the bond to be maintained, not merely filed once.

What is this Bond For?

Section 8 is specific about who the bond protects: creditors who obtain a judgment from a court of competent jurisdiction based on the agency's failure to remit collected funds. If an agency collects money for a client and does not pass it along, the client can reduce that claim to judgment and recover against the $25,000 bond. It is remittance protection — the core trust obligation of the collection business, backed by a surety.

When is it Required?

At licensure and continuously afterward. The bond is written in continuous form and runs concurrently with the original license period and each renewal unless the insurance company terminates it — which requires the insurer to file a 60-day notice of termination with the Department and send the same notice to the agency. That notice period is the agency's window to replace coverage before a lapse threatens the license.

Where Does it Apply?

The requirement is statewide, created by the Illinois Collection Agency Act (205 ILCS 740, formerly 225 ILCS 425) and administered by the state's financial regulation department. It covers collection activity under an Illinois license regardless of where in the state the agency operates.

How to Buy Online

Select 'Buy This Bond Online' to open the secure surety portal in a new tab. Complete the application with your agency's license details, pay online, and your executed $25,000 Illinois collection agency bond comes back ready to file with your application or renewal.

Why Bond Titan?

Bond Titan is powered by The Southern Agency, a licensed surety agency. Because the Illinois Collection Agency Act was recodified, citations floating around the industry are often stale — the Official Sources section below links the current statutory text so you can verify the requirement exactly as the law states it today.

Official Sources

The requirements described on this page are verified against the official sources below.

• $25,000 surety bond required, continuous in form, running concurrently with each license period; for the benefit of creditors with judgments based on failure to remit; 60-day insurer termination notice; Act recodified from 225 ILCS 425 to 205 ILCS 740: Illinois Collection Agency Act, Section 8 (205 ILCS 740/8, was 225 ILCS 425/8) (verified July 16, 2026)