Illinois Debt Relief

In a Nutshell

Illinois residents often struggle with outstanding debts from medical bills, credit cards, mortgages, loans, or even devastating life events like divorce. The 6th most populated state in the nation, with 12% of citizens living in poverty, many Illinoisans find themselves in need of financial or debt relief solutions. 

TurboDebt offers Illinois debt relief programs with up to 54% in savings from outstanding bills before applicable fees. Find out how services like debt management, credit counseling, and debt settlement can keep you out of bankruptcy or foreclosure and give you more financial freedom. 

Illinois Debt Relief Overview

From fertile farmland to big cities that drive stock and commodity exchanges, Illinois has a lot to offer. Chicago and its surrounding suburbs are home to cultural institutions and historic industry, while counties rich in agriculture, like DeKalb, yield some of the country’s best corn and soy crops.

Since residents live in a mix of rural and urban environments, housing and wages vary widely between counties and regions. Making an affordable living in the state is a challenge many residents face as inflation rages and housing inventory declines. 

Illinois residents also struggle with credit card debt as more residents charge essentials like food and housing just to get by amidst growing inflation. If you’re dealing with outstanding balances, you’re not alone. 

Across the nation, credit card balances increased to $930 billion in 2022, a 145 billion dollar increase from the previous year. While residents in some states owe well below the median, Illinois households struggle with the same amount of credit card debt as the national average. 

As the economic climate continues to shift after the pandemic, learning how to manage your finances can give you the freedom to live the lifestyle you want. TurboDebt offers a range of programs tailored to help Illinois residents find relief when overcoming debt seems impossible. 

Read on to learn more about Illinois debt relief options like credit counseling, debt management plans, and loan consolidation programs, with data and statistics to give you a picture of what debt looks like in the Prairie State. 

Debt in Illinois

Data and statistics can give you a quick snapshot of the types of debt many people in the state struggle with yearly, monthly, or even daily. Illinois residents face financial hardship in the following areas:

Average Consumer Debt

By combining the total amount of debt from auto and student loans, mortgages, and credit cards, you get a financial picture called average consumer debt. This figure helps individuals and economic experts identify the financial burdens people face throughout the country. Illinois residents carry an average consumer debt of $49,480, less than the national consumer debt amount of $55,480.

Credit Card Debt

Illinois residents carry the same credit card debt as the national average of $3,060 per household. Credit card debt also affects the youngest and oldest citizens the most, with individuals aged 18-29 and 60 and over owing the most. 

You’re not alone if you’re in credit card debt. Turbodebt helps thousands of customers manage outstanding credit card balances and other unsecured debts through our counseling and debt relief programs. 

Student Loan Debt

Households in Illinois average $6,110 in student loan debt, higher than the national rate of $5,640. Student loan payments are one of the top types of debt burdening young people as recent graduates look for work that fits their skills and meets their financial needs.

Auto Loan Debt

Auto loans make up a significant portion of consumer debt in the United States. Illinois residents owe an average of $4,630 on a car loan, which is still significantly lower than the national average of $5,210. New car loans came with an interest rate of 6.64% for 72 months in November of 2022, with rates for used car loans soaring as high as 22.41% from lenders in the same year.

Mortgage Debt

Mortgage debt accounts for the largest contributor to average consumer debt. With a volatile housing market, ever-changing inventory and sales prices make it difficult for buyers to secure housing within their means.

The number of home sales in Illinois dropped 21.9% from the previous year in August of 2023, while median home prices increased by 1.9% due to a drop in inventory. The decrease represents average sales for all properties across the state. Prices for all properties continue to increase, with the median sales price at $270,000 in 2023. 

According to Federal Reserve Bank data, households in Illinois owe an average of $33,570 in outstanding mortgage debt.

Bankruptcy Statistics

In 2022, the number of bankruptcy filings increased by 6% across the United States, with Illinois’ bankruptcy rates ranking above average compared to the entire population. A total of 20,944 individuals and 549 businesses filed for bankruptcy in 2021. Consider talking to a Turbodebt counselor before filing for bankruptcy to determine if this is your best option for debt relief in Illinois.

Average Income and Employment

As of December 2022, unemployment in the state sat at 4.7%. Median household income averaged $72,563, while per capita (individual) income was $39,571. With a population of over 12 million residents, 12% are living in poverty.

Credit Scores

Another measure of financial security, credit scores provide an overall rating of an individual’s ability to pay off debts and manage their lines of credit. 

The most accepted score comes from an organization called the Fair Isaac Corporation (FICO). FICO scores range from 300 to over 800, the ranges for which are assigned a rating like poor, fair, or good. Higher credit scores mean more loan options and lower interest rates for borrowers.

Up three points from 2020, individuals in Illinois earned an average credit score of 719. Considered a “good” score by FICO, this gives individuals more opportunities when opening lines of credit or shopping for loans.

Identity Theft

Additionally, incidents of identity theft can affect residents’ financial health. Illinois ranks 18th in the nation with 136,640 reports of ID theft in 2021. Increased security breaches and greater amounts of digital data stored on Cloud platforms make identity theft a growing concern. Identity theft can damage your credit and cost money when someone who steals your information tries to open credit accounts or even receive medical services in your name.

Banking and Tax Info 

Within the state of Illinois, residents, trusts, and estates pay a flat state income tax totaling 4.95% of their net income, while businesses pay a flat state tax rate of 7.00% of net income. Sales tax varies by county, with an average of 8.82%.

Residents with a bank account make up most of the population; however, those using alternative means to access funds account for 3.4-4.5% of citizens. Those who have never opened a bank account, referred to as “unbanked,” make up 51.2% of these individuals.

Unbanked citizens use services such as check cashing or money transfers to move and access paychecks or pay bills. Without a bank account, individuals are often at risk of falling into debt due to fees associated with money transfer services.

TurboDebt Can Help With Debt Relief in Illinois

At TurboDebt, we’ve helped over 8,000 Illinois clients through our consultations and debt relief programs. With over 2,200 clients enrolled in 2023, we’re committed to helping you pay off debt and restore your credit to take back your financial freedom right now.

Here’s a look at more of our stats:

• Total amount of debt enrolled: $53,079,928
• Average debt enrolled per client: $23,425
• Average savings (before fees) after enrolling in our debt relief program: 54.01%

Get Relief from These Top Types of Debt in Illinois

 Here’s a look at the most common forms of debt facing residents throughout the state:

Credit Card Debt Relief

One financial hardship that many residents deal with is compounding credit card debt. Unpaid balances with high interest rates and late fees from credit card companies keep adding up, making repayment difficult. As this cycle continues, it negatively impacts both your credit and your finances.

In February 2023, the median interest rate for credit cards rose to 23.24%. This number is expected to rise as the Federal Reserve continually hikes interest rates in an attempt to reduce inflation. If you carry a balance from month to month, finding a credit card debt relief program in Illinois to help manage your outstanding balances may be the best way to get yourself back on track financially.

At TurboDebt, we talk with individuals burdened by thousands of dollars in credit card debt. We can help you make a plan to alleviate unpaid balances and get you back on your way to a good credit score. 

Divorce Debt Relief

Going through a divorce is painful enough without the added burden of outstanding debt from legal proceedings and asset liquidation. If you find yourself battered with financial hardship after a divorce, it may be the right time to look for a program to help consolidate debts and rebuild your assets, so you can resume a debt-free lifestyle.

 We help a lot of individuals burdened by excessive debt after a divorce. Consider talking to one of our advisors about options like debt consolidation loans to get your finances under control.

Business Debt Relief

With over 500 businesses filing for bankruptcy in the state, owners may need to seek debt relief options to avoid this last resort for entrepreneurs in Illinois. If you’ve taken on the burden of a personal loan or charged money on company or personal credit cards to avoid financial collapse, consider finding a program to restructure your business accounts, consolidate loans, and create a payment plan.

Medical Debt Relief

Unsecured medical debts can strain your finances as you struggle to pay off your bills every month. With insurance premiums, medical costs, and deductibles changing from year to year, it’s hard to know what to expect after an emergency hospital stay or even a planned surgery. Get help managing your medical bills through a reputable organization that will assist you in managing your payments and negotiating fees with creditors.

Homeowner Debt Relief

Since mortgages account for the largest portion of consumer debt, it’s an area of concern for many Illinois residents. Rising interest rates drive up the cost of new and adjustable-rate home loans (ARMs), and low inventory in the state continues to inflate housing costs for those living in the “Land of Lincoln.” Refinancing your mortgage and reducing the interest rates on your other debt when you get behind on payments can help you avoid foreclosure and get your finances back in order.

Retirement Debt Relief

When you’re on a fixed income, debts like medical and credit card bills can drain your retirement savings. If you’re struggling to maintain your lifestyle after unforeseen bills or mounting fees from creditors, look for a program that helps consolidate your payments and renegotiate outstanding debts.

Options for Debt Relief in Illinois

Getting into debt often becomes a vicious cycle. Rolling balances and getting charged fees month after month make it hard to pay ever-increasing bills.

Because a lower credit score affects your ability to get loans for items like cars or homes, making late payments or carrying unpaid balances on your credit cards negatively impacts your financial future.

Borrowers often find it challenging to secure loans from providers without a substantial down payment, especially with low credit. If you’re struggling to pay off debt, here are some Illinois debt relief options to consider to get your finances back on track:

Debt Management Programs

In debt management programs, advisors take a holistic look at your outstanding balances by analyzing your assets and creating a plan to pay off what you owe. Through these programs, personal advisors take an in-depth look at your finances, including:

• Monthly income
• Investments
• Expenses
• Savings
• Credit history and score

Enrolling in a debt management program also gives you access to professionals with experience in managing debt portfolios for clients with moderate to high levels of outstanding debts. After you’re connected with a consultant, you can ask for advice and get support in making a plan to pay off your debt, reduce fees, and accelerate your payment schedule.

Debt Consolidation Loans

If you’re struggling to pay off debts from multiple creditors, a consolidation loan can simplify your payment structure and reduce fees. In this process, you’ll take out a loan for the total amount you owe, paying off creditors through your newly loaned funds. By doing this, you’ll effectively refinance and restructure your monthly payments into one single loan to pay off while avoiding high interest rates and fees from each separate account you had before.

For example, imagine you owe $5,000 in unpaid balances on a credit card that charges you 20% interest every month plus another $3,000 in medical bills with 15% interest. Working with a reputable debt relief program, you secure a loan of $8,000 to immediately pay off these two high-interest debts. Now, you owe a single monthly payment toward the loan at an interest rate of only 10%, which will allow you to pay off your loan more quickly and easily.

Debt Settlement

Another Illinois debt relief option, debt settlement, is another way to effectively satisfy an outstanding debt in one lump sum. The debt settlement organization typically handles all the negotiation and payment, acting as a liaison between you and the creditor.

During this process, a debt settlement company:

1. Negotiates with a creditor to secure a single payment amount to pay off your debt with them for some percentage of the current balance.

2. Reduces the total sum you owe to as little as 50%-70% of the current balance in return for the creditor fully releasing you from the amount owed.

3. Collects your money and allocates it to a savings account to pay the creditor once the balance in the account is sufficient to meet the full amount negotiated with your lender.

4. Charges a small fee for handling the transaction on your behalf.

Credit Counseling

Credit counseling often functions as part of a debt management plan to realign your payments and lower interest rates. Once you enroll in a program, a credit counseling agency provides advice from experts who look at your credit report and come up with a plan to help get you out of debt.

Credit counselors can also help you set goals to pay off outstanding balances faster so you can live debt-free as soon as possible. Credit counseling may involve freezing or closing out credit card accounts until you’ve paid off your debt. 

Bankruptcy

Bankruptcy is a legal process that requires a court-approved trustee to validate your inability to pay back your debts. After filing a petition, the court determines how to distribute your remaining assets to pay off a portion of what you owe or, in some cases, void the debt altogether.

However, declaring bankruptcy comes with more repercussions to your credit and financial history than other Illinois debt-relief options, making it a challenging solution. This option affects your credit report for up to 10 years, making it difficult to take out a new loan for a credit card, car, or business.

Relevant types of bankruptcy for individuals and businesses include:

• Chapter 7 Bankruptcy: The most common option for individuals, filing Chapter 7 involves the liquidation or sale of all your assets to pay back your debt. This type of bankruptcy can also erase unsecured debts such as credit card bills but not student loans.
• Chapter 11 Bankruptcy: Mostly an option for business entities, Chapter 11 allows a business to plan how they can pay off debts while continuing to operate. Once the creditors and court agree to the plan, payments begin.
• Chapter 12 Bankruptcy: This type of bankruptcy is used mainly for agriculture operators like farmers to avoid losing their assets.
• Chapter 13 Bankruptcy: Another commonly used bankruptcy option, Chapter 13 works to reorganize your debts through a court-ordered 3-5 year repayment plan and can give you extended time to make mortgage payments to avoid foreclosure. The court also sets a budget and checks your spending regularly to ensure you can continue making payments.

Debt Forgiveness

In some cases, you can completely void or significantly lower your debts if you qualify for a debt forgiveness program. These programs require you to meet specific guidelines such as income or type of employment. Federal debt forgiveness programs are common through the Department of Housing and Urban Development or the Department of Education and may assist in lowering your mortgage payments or forgiving student loan debt after a certain period of time in a qualifying employment position.

Debt and Financial Hardship Resources

If you need immediate assistance while making a plan to pay off debt, consider using these resources:

Temporary Assistance Programs

• Cash Assistance: The Illinois Department of Human Services offers cash assistance for families, disabled persons, and other individuals who meet certain qualifications. Read more from the Illinois Department of Human Services website.
• Utility Energy Assistance: The Illinois Commerce Commission provides financial assistance to low-income families struggling to pay utility bills. Read more details about the program and learn how to apply on their website.

State Health and Human Services

• All Kids: This state-run program provides comprehensive healthcare services to children, including doctor visits, medical equipment, and prescription drugs. Learn more about the most recent updates and start an application on their website.
• Medical Assistance Programs: State residents who meet specific financial requirements can apply for medical care assistance through local branches of the Department of Human Services. Learn more about available services through their website.

Child Care

Illinois offers a Child Care Assistance Program to support children and their caretakers. This state-run program provides assistance based on family income and size to help low-income, working families afford quality child care facilities. Learn more about their services on the child care assistance website.

Shelters for the Homeless

The state supports the homeless and those at risk of becoming homeless through public and private organizations. Here’s a state-provided list of over 70 shelters that offer overnight or transitional housing and other services.  

Free Transportation Services

Illinois offers reduced and free fares through the Pace suburban bus system and train and subway rides through the Regional Transportation Authority (RTA). The following residents may qualify for free transportation:

• Children
• Military personnel
• People with disabilities
• Law enforcement personnel
• Firefighters
• Older adults

More Resources for Chicago Residents

Brad Reichert, Founder and Managing Director of Reichert Asset Management LLC, offers additional resources for those living in financial distress in Chicago. 

 He shares, “The city of Chicago, in particular, has two programs under the ‘Administrative Debt Relief’ or ADR program, that are specifically designed to help people under a certain income level. The Utility Billing Relief (or UBR) program is designed to help make water and sewer bills more affordable for qualifying Chicago residents.” 

“The Clear Path Relief (CPR) Pilot program,” Reichert explains, “creates an opportunity for low-income motorists in Chicago to reduce or eliminate certain kinds of vehicle-related debt, including parking, compliance, red light, and speed tickets, but excludes tickets for expired parking meters.”

Choose Financial Freedom with TurboDebt

Make a plan to pay off your debt and get back to financial freedom with a debt relief program you can trust. Avoid scams by reading reviews and reviewing the organization’s website to ensure they provide transparent options. You'll find thousands of positive TurboDebt reviews on sites like Trustpilot and Google. 

Get real help through one of TurboDebt’s debt management plans. Complete our initial consultation in just a few minutes to get connected with a personal debt advisor. Together, you can make a plan to consolidate your debts and pay off outstanding bills, typically in less than five years. Improve your financial situation today by enrolling in the right debt relief program to meet your needs.