Illinois Debt Consolidation

The Illinois’ economy was hit harder than many other states by the COVID-19 pandemic because of the preexisting conditions.

Illinois’ weak economic foundation and fiscal mismanagement were already rampant in the state prior to the pandemic and caused it to suffer an even deeper economic downturn during COVID than other states. Unfortunately, those factors have also led to a much slower recovery throughout The Land of Lincoln.

Illinois ranks first in the nation in foreclosures. Some 2,788 of the approximately 5.3 million households have been foreclosed upon. Counties such as Saint Clair, Henry, Cook, Johnson and Rock Island have been hit the hardest by the wave of foreclosures.

The Illinois Department of Housing Services estimates that there are approximately 414,000 vulnerable households that have experienced housing insecurity throughout 2021. Some 60,000 are vulnerable to eviction — triple the number of households that had to endure evictions just two years earlier.

Fortunately, there is plenty of help available for those who are still struggling financially and looking for relief on citizens of Illinois.

Debt Relief Options for Illinois Residents

InCharge Debt Solutions’ debt management program is a great option for consumers experiencing problems paying off their monthly bills. InCharge’s certified credit counselors can assist customers with consolidating credit card debt, lowering interest rates and creating affordable payment plans.

InCharge debt management programs will help customers eliminate credit card debt in 3-to-5 years. Clients will need to abide by a rigid spending budget and make sure that payments are made on time every month.

On average, customers pay 16.5% interest on credit card debt in 2021.Consumers who failed to pay on that debt on a monthly basis saw interest charges soar to 25%, and occasionally as high as 30%.

InCharge will work closely with the credit card companies to knock those interest rates down to approximately 8%. That reduces the monthly payment to a rate that consumers afford.

nCharge coordinates the monthly payments and pays them to creditors in amounts previously agreed upon.

To enroll in a debt management plan, consumers must either go online or contact an InCharge counselor by phone.

There is another important factor to consider in starting a debt-consolidation plan: Your credit score will not be a factor in starting the plan. Clients whose credit scores have fallen off in recent months can still qualify for debt management plans.

Debt management programs are the easiest and most efficient ways of eliminating debt, but there are other options for residents of Illinois to consider:

• Debt Settlement – If you are concerned about credit card debt, personal loans, and medical bills, debt settlement is a an option to help relieve your worries. Debt settlement allows debtors to pay less than the amount owed on credit card bills. However, creditors must have a lump-sum payment ready when they do get creditors to agree to settle. While this debt-relief option could cure some of your financial problems in the short term, the negatives — both immediate and long-term ones — are there to deal with. Debt settlement is a negative hit on your credit report and it will stay there for seven years. That will lower your credit score and negatively impact your odds of securing future credit for big purchases such as a home or a car. Also, the IRS will consider it taxable income if you have more than $600 of debt forgiven.
• Debt Consolidation Loan – Consumers with a good credit score should qualify for a debt-consolidation loan. Consumers can use that loan to pay off their credit card bills. They will then begin monthly payments to the lender. The interest rate should be lower than the steep one charged by credit card companies and could mean sizable savings for you overt time. One negative, however, is that you still have to pay off the loan. Consumers who don’t closely monitor their finances could be at risk of running debts back up, if they continue using those credit
• Credit Card Forgiveness – This program is offered by a select group of nonprofit credit counseling agencies, including InCharge Debt Solutions. The choice allows consumers to pay 40%-50% of what is owed. The difference between this option and traditional debt settlement is that no negotiating with creditors is needed. The creditors agree in advance to lower the owed amount. Consumers can eliminate their debt in 36 months.
• Bankruptcy – Touted by some as “a fresh start,” bankruptcy allows a consumer to completely get rid of their credit card debt. However, this option should be considered only as your last resort. While bankruptcy certainly can produce some short-term relief, the long-lasting damage can go on for years. Choosing the bankruptcy option will negatively impact your credit report for 7-10 years. That blemish on your credit report could cause problems securing a loan to purchase a new vehicle or a home. Before opting for bankruptcy, you must consider the future damage this could have on your credit going forward.

Illinois Debt Resources

Residents of Illinois experiencing tough times as result of being unable to find a good job, suitable housing or paying off their bills might qualify for financial assistance through a variety of federal and/or state programs. Here are some of the services available:

• Temporary Assistance for Needy Families: Illinois’ TANF program receives grants for programs designed to provide families assistance so that children can be cared for, to promote job prep and work and to encourage the formation of two-parent families. To qualify, you must be an Illinois resident and a U.S. citizen, develop a Responsibility and Services Plan and either be pregnant or with a child younger than 19 in your household. For more information, call 1-800-843-6154.
• Supplemental Nutrition Assistance Program:  This food-assistance program, formerly known as Food Stamps, provides food benefits, access to healthy foods and education on food prep. To be eligible for the SNAP, you must be an Illinois resident and be considered to be a low-income household. Benefits to buy eligible food items will come on an electric card similar to an ATM card known as an Illinois Link Card.
• Women, Infants and Children Farmer’s Market Nutrition Program: The WIC FMNP is a food assistance program for women, infants and children. It helps pregnant women, new mothers and young children eat well and stay healthy. It also provides healthy food, education about nutrition, breastfeeding support and referrals for community services.
• Homeless Youth Services: The Homeless Youth program is a holistic model designed to improve the safety of youth by ensuring that their basic survival needs are met while also providing them with stable housing, education and employment services. There are outreach programs in place to identify homeless youth to ensure their basic safety. Emergency Shelter, Interim Housing and Transitional Living programs are available to those youths in need.
• Department of Mental Health: The DMH is responsible for assuring that children, adolescents and adults throughout Illinois have the availability to public-funded mental health services for those diagnosed with a mental illness, emotional disturbance or an impaired level of functioning. DMH also provides required treatment services for sexually violent people through its Treatment and Detention Facility. There are 162 community mental health centers/agencies throughout Illinois.
• Substance abuse and/or opioid addiction: Helpline is the only statewide, public resource for finding substance abuse treatment and recovery services in Illinois. Helpline is in place to serve people using opioids and other illegal substances — with or without insurance. Helpline can help addicts take major steps toward recovery.
• Early Intervention: The purpose of the Early Intervention program is to help children between the ages of birth and 3 years old with disabilities that slow down learning and growing. Infants will be evaluated to see if there is a delay in movement, learning, getting along with others, behavior and with their self-help skills. To apply to this program or to learn more, potential applicants can call 1-800-843-6154.
• Illinois Housing Help: The goal of the Illinois Housing Help program is to provide a combination of financial assistance, legal assistance, case management and community outreach in an attempt to address housing crises for residents of Illinois.

Illinois Debt Statistics

Here is some data that points to the debt problems that Illinois residents faced in 2021 and likely will carry into 2022. The hope that they can rid themselves of as much of that debt as possible and have a more prosperous future.

• Auto loan debt: Illinois residents ranked 35th in the nation in auto debt in 2020 at $19,036. That was a 4% increase over the 2019 average amount of auto debt — a jump that tied for 17th in the nation.
• Credit card debt: Illinois residents have, on average, $5,265 in credit card debt — the 15th largest amount in the U.S. That debt total is significantly less than the national average of $6,194 of credit card debt in 2021.
• Mortgage Debt: Mortgage balances in Illinois remained mostly steady in 2020, rising just 0.4% to $177,055. That amount ranked as the 25th highest in the nation.
• Student Loan debt: Illinois ranks seventh in the nation in terms of the most collective student loan debt at $59 billion. On average, Illinois college students and graduates owe approximately $37,600 in student loans, which ranks eighth in the nation. Approximately 59% of graduates in The Land of Lincoln are saddled with student loan debt.
• Household debt: Residents of Illinois owe an average of $54,700 in total household debt, excluding their mortgages. That is the eighth largest amount of household debt in the nation. Another troubling fact is that, on average, they spend 90% of the money that they bring home on a yearly basis, leaving only 10% for savings or investment.
• Bankruptcy and foreclosures: These have been the two major areas of concern in Illinois for much of the past year. As of May of 2021, Illinois had 9,618 bankruptcy filings — the third-most in the nation only behind California and Florida.
• Credit scores: Tough economic times have managed to damage credit scores for many Illinois residents, but the state has somehow managed to stay above the national average in this category. On average, people in Illinois have a credit score of 716, which ranks as the 27th-best credit score in the nation.
• Identity theft: Illinois has been hit hard by cases of identity theft. The 135,038 cases of ID theft have been the second most in the nation. For every 100,000 residents in Illinois, 1,066 of them have fallen victim to identity theft of some kind.