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llinois Legislature Moves to Restore Ten-Year Statute of Limitations to HELOCs

06/08/2026

Illinois Legislature Moves to Restore Ten-Year Statute of Limitations to HELOCs

 

Following our 2025 update regarding BMO Bank N.A. v. Zbroszczyk, 2025 IL App (1st) 241333, the Illinois General Assembly has taken action that may significantly limit the impact of that decision.

 

Legislative Update

The Illinois Legislature has passed Senate Bill 2951 (“SB2951”), which proposes to amend section 13-206 of the Illinois Code of Civil Procedure (735 ILCS 5/13-206) to expressly provide that an action on any indebtedness of any kind that is secured by a mortgage or deed of trust in the nature of a mortgage must be commenced within 10 years. If signed into law, SB2951 would be effective immediately and would effectively supersede the holding in BMO Bank N.A. v. Zbroszczyk, where the First District Appellate Court held that a foreclosure action involving a Home Equity Line of Credit (“HELOC”) was subject to the 5-year statute of limitations under 735 ILCS 5/13-205 rather than the 10-year limitations period under section 13-206.

 

Why This Matters

As discussed in our prior alert, the Zbroszczyk decision created substantial uncertainty for mortgage lenders and servicers by treating a HELOC agreement as analogous to a revolving credit account and applying a 5-year limitations period despite the debt being secured by a mortgage. SB2951 appears intended to eliminate that uncertainty by clarifying that any indebtedness whatsoever secured by a mortgage or deed of trust is subject to a 10-year limitations period regardless of the particular loan product involved. If enacted, the legislation would provide important protection for mortgage owners and servicers and restore consistency in the treatment of mortgage-secured obligations.

 

Current Status

SB2951 has passed both houses of the Illinois General Assembly and is awaiting action by Governor Pritzker. At this time, the bill has not yet been signed into law. Our firm is closely monitoring the legislation and will provide additional updates regarding the Governor’s action and the effective date of the amendment, if enacted.