For Illinois residents struggling to pay off debt, a discounted settlement may be more attainable than they realize.
Creditors are often willing to negotiate, Illinois Legal Aid Online says; the organization has introduced a free tool to help people understand their options.
Here's what to know
The organization's Debt Help Illinois website uses a chat-based format, allowing users to answer questions and receive guidance tailored to their circumstances. The resource covers credit card and medical debt, among other financial problems, WSIU reported.
According to Illinois Legal Aid Online, almost 20% of Illinois residents carrying credit card debt have balances that have gone to collections.
Some people see an unaffordable balance as a dead end. That belief can keep them from taking action on their debt, according to Steve Uhrich, the organization's consumer debt solutions product manager.
"They owe a few thousand dollars on a credit card or medical debt, and they don't have a few thousand dollars in the bank," Uhrich explained, per WSIU. "The thing is, they do have more options available to them, and they can often negotiate a discounted settlement."
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More background
Polling cited by WSIU shows that about a quarter of Americans worry about their debt daily.
WSIU reported that research from The Pew Charitable Trusts found default judgments in over half of Chicago's debt collection cases. Those judgments can allow creditors to garnish wages or take money from bank accounts. Uhrich warned that a creditor's decision to sue is a point at which continued inaction can be especially risky.
Uhrich described "the justice gap" as the shortfall between available legal resources and the needs they must meet. Debt Help Illinois helps residents navigate that gap and assess whether consulting a consumer attorney is necessary.
What can be done?
Upfront payment demands and claims that accounts can be settled for less than the amount owed warrant caution when considering a debt settlement company, Uhrich advised, per WSIU.
After an account becomes delinquent, creditors are typically receptive to discussions, Uhrich said. Consumers may therefore have an opportunity to negotiate directly with the creditor.
"If they can get someone just to talk to them, they're usually very willing to negotiate, and that's particularly true if it's a debt buyer," Uhrich said.
Debt Help Illinois also explains special consumer protections that apply when dealing with collection agencies and debt buyers, according to WSIU.
Uhrich emphasized that residents do not need to wait for a court case to seek guidance.
"This website isn't just for people who have been sued. We also see it as a resource for folks who are just dealing with debt generally and don't know where to start."
Where can I learn more?
These stories cover settlement offers, debt cancellation, housing disputes, rising balances, and Medicare payment options.
• With U.S. card debt at $1.26 trillion, collectors' first settlement offers may leave negotiating room.
• Massachusetts wiped $52 million in debt for 6,000 consumers and banned a collector.
• Missouri tenants won nearly $4 million, debt relief, and repairs after years of complaints.
• Residents of Idaho and Utah saw average debt double over a decade.
• A Medicare enrollee was charged a three-month premium bill, prompting suggestions to use Easy Pay.
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