The 2023 Guide to Debt Consolidation and Relief in Illinois

With an average debt balance of $50,450, Illinois residents are doing better than most of the rest of the U.S. when it comes to accumulating debt.

But that doesn’t mean families aren’t struggling. Many households in the Prairie State are still struggling to repay debt. If you’re one of them, here’s everything you need to know to become debt-free.

Top Options to Become Debt-Free in Illinois

If you’re drowning in debt and don’t know how to pull yourself out, here are your best options:

1. Debt Consolidation Loan

Works best for: People with 670+ credit scores

Debt consolidation loans involve using a new, larger loan to pay off your other unsecured debts, including credit cards. A debt consolidation loan should typically have a lower interest rate than your current debts to be effective. 

This leaves you with one monthly payment and one creditor, saving money and simplifying your payments.

READ MORE: How to consolidate your credit card debt

2. Debt Consolidation Company / Debt Consolidation Program

Works best for: Anyone with more than $10,000 in unsecured debt who is struggling to make their payments and wants to avoid bankruptcy. 

Debt settlement involves negotiating with creditors to repay less than the total amount they owe, sometimes as a lump sum and sometimes as a longer-term payment plan. 

In Illinois, debt settlement can help you pay off different forms of consumer debts, including:

  • Credit cards/lines of credit
  • Personal loans
  • Department store cards
  • Old judgments
  • Student loans in default
  • Other unsecured loans or debts

To make debt settlement work, you must stop paying your debts for three to six months until your creditor charges off the debt. This will damage your credit score but will incentivize the creditors to negotiate. Once settlements are reached, and payments are made, your credit score will rebound. 

The average debt settlement customer ends up debt-free while paying about 75% to 80% of the total enrolled in the program after all fees are paid. 

Debt Settlement Risks
  • Your creditors aren’t obligated to settle
  • If a creditor refuses to settle, you could end up having to pay accrued interest and late fees
  • Missed payments will show up on your credit report
  • You may have to report the forgiven amount as income tax to the IRS

READ MORE: Is debt settlement the fastest way to get out of debt?

Illinois Debt Consolidation Companies

Looking for a debt consolidation agency to help you get a handle on debts? Here are a few firms that could help:

Best Overall: DebtHammer

DebtHammer helps borrowers overwhelmed by unsecured debts ranging from payday loans and tribal loans to credit cards and medical bills. 

After a free consultation to review your situation, the DebtHammer representative will offer you a menu of options. You will decide on the course of action you prefer. These options may include debt settlement, debt consolidation, bankruptcy or others. DebtHammer requires a minimum debt of $7,500 for program enrollment or $1,000 in payday loans. The company charges 25% of the total enrolled debt.

READ MORE: DebtHammer review

Though based in Texas, DebtHammer currently provides solutions to residents of Illinois, Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Kansas, Louisiana, Maine, Massachusetts, Michigan, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming. Some service options may not be available in all states.

Click here to schedule a free consultation.

More Debt Relief Companies

  • Debt Negotiation Services Debt Settlement Company: Boynton Beach, CA (561) 964-6404
  • Alleviate Financial Solutions 4 Park Plaza Suite 1500, Irvine, CA 92614 (800) 308-2935
  • Guardian Litigation Group: 17922 Fitch Suite 150, Irvine, CA 92614 (949) 312-4226
  • New Era Debt Solutions: 330 Wood Rd., Suite B Camarillo, CA 93010 (805) 303-8773
  • Global DS 675 W Indiantown Rd. Jupiter, FL 33458-7555, (866) 677-5044
  • InCharge Debt Solutions: Orlando, FL (800) 565-8953
  • Golden Financial Services Debt Settlement Corporation: Lake Worth, FL, (619) 600-5189
  • National Debt Relief 180 Maiden Ln 30th floor, New York, NY 10038 (800) 300-9550
  • DebtBlue: 1125 E Campbell Rd Suite 200, Richardson, TX 75081 (855) 269-9462

Illinois Debt Settlement Attorneys

  • Edwin L Feld & Associates, LLC: 1 N La Salle St #2250, Chicago, IL; (888) 645-4357;
  • Zero Debt Law Firm: 650 Warrenville Rd, Lisle, IL; (312) 675-4618;
  • DebtStoppers – The Semrad Law Firm: 5101 Washington St Ste 29, Gurnee, IL; (312);
  • Bentz Holguin Law Firm, LLC: 100 N La Salle St Ste 1600, Chicago, IL; (312) 647-2116;
  • Thurston Law Firm: 141 W Jackson Blvd UNIT 2800, Chicago, IL; (312) 818-8008;
  • DebtPros – Wonais Law, LLC: 11070 S Western Ave #9, Chicago, IL; (312) 883-5422;
  • Peter Francis Geraci Law L.L.C.: 927 S Mannheim Rd #1N, Westchester, IL; (888) 456-1953;
  • CLM Law Group, P.C.: 18525 Torrence Ave Ste E1 Suite E1, Lansing, IL; (708) 251-5203;
  • Debt & Injury Law Center: 1051 Perimeter Dr Suite 300, Schaumburg, IL; (224) 789-8529;
  • The Shimotake Law Firm, LLC: 1 S Dearborn St 20th Floor, Chicago, IL; (312) 620-6499;
Eligible Debts

When seeking debt relief in Illinois, it’s important to note that not all types of debt are eligible. Debts that can be included in the state’s debt settlement programs include:

  • Credit cards
  • Department store cards
  • Signature loans
  • Personal lines of credit
  • Old repossessions
  • Other unsecured debts
  • Old judgments
  • Private student loans in default
Ineligible Debts

Debts that don’t typically qualify for debt settlement include:

  • Home mortgages
  • Federal student loans
  • Car loans
  • Other secured debts
  • Credit Union debts
  • Medical bills

3. Debt Management

Works best for: People with primarily credit card debt. Many credit counseling agencies work exclusively with credit card debt (and thus won’t be a help if you need to consolidate medical bills or student loans.)

A debt management program will usually reduce the interest rates on your credit cards from the current average of about 20% to somewhere around 9%. This will lower your monthly payment. However, unlike debt settlement, you will repay the full amount you owe, plus a lower amount of interest. The program usually takes 3-5 years to complete. 

Pro tip: It’s important to note that only 55% to 70% of customers who enroll in DMPs successfully complete the program. If you enroll in a Debt Management Plan but don’t complete it, your financial situation could worsen. 

So, for example, if you had $5,000 in credit card debt and were paying 25% interest, your monthly interest rate would be $105. If you reduce the interest to 8%, you’ll pay $33 a month in interest. That’s a $72 savings that you could apply to reducing your debt and paying it off faster.

These programs are usually set up and administered by nonprofit credit counseling agencies. 

Like with debt settlement, debt management does not involve a loan. Credit scores won’t matter. But if you default on payments, your creditor could raise the interest rate back to its original amount. 

READ MORE: Debt management vs. debt settlement

Credit Counseling Agencies in Illinois

  • Consumer Credit Counseling Services: 719 Main St A, Peoria, IL; (309) 676-2941
  • Illinois Credit Services: 16143 S Lincoln Hwy #201, Plainfield, IL; (630) 427-8500;
  • Family Credit Management Services: 4304-06 Charles St, Rockford, IL; (815) 484-1600;
  • CCCS of Northern Illinois, Inc.: 13707 W Jackson St Ste B, Woodstock, IL; (815) 338-5757;
  • Repair My Credit Of Schaumburg: 500 E Niagara Ave, Schaumburg, IL; (888) 995-6322;
  • Prime Credit Advisors: 15255 S 94th Ave 5th fl, Orland Park, IL; (708) 761-4844;
  • Credit Wiz: 125 S Wacker Dr STE 300, Chicago, IL;

4. Bankruptcy

Works best for: People who can see no other way to get out of debt within the next five years, who’ve already suffered significant credit score damage or who’ve tried one or more of the other options and failed. 

Since peaking in 2018, the number of bankruptcy filings in Illinois has been steadily decreasing. But 2023 numbers indicate an upswing over 2022 filings, a sign that many Illinois residents are struggling as home values continue to soar.

There are two types of bankruptcy:

  • Chapter 7: Your non-exempt assets are liquidated by a court-appointed trustee and the money is used to repay your debts. Some assets are exempt, including Social Security, your home, pensions and your car.
  • Chapter 13: You keep your assets but are on a payment plan to make regular payments toward your debt. All of the repayments go through your bankruptcy trustee.

Here are the means test income requirements for 2023:

  • One resident: $67,102
  • Two residents: $84,892
  • Three residents: $101,951
  • Four residents: $122,289
  • Five residents: $132,189
  • Six residents: $142,089
  • Seven residents: $151,989
  • Eight residents: $161,889
  • Nine residents: $171,789 

Illinois Bankruptcy Exemptions

Exemptions are unlimited for some personal property, including family pictures, necessary clothing,, worker compensation benefits, life insurance, IRAs and qualified retirement plans.

In other cases, there are fixed dollar amounts. Common exemptions include:

  • Personal residence: $15,000 in equity ($30,000 for spouses filing jointly)
  • Compensation for personal injury claims: $15,000
  • Motor vehicle: $2,400 equity for each owner
  • Professional equipment: $1,500

Illinois law allows each individual the right to exempt up to $4,000 in equity for other personal property, including bank accounts and cash.

Debts that Aren’t Discharged by Chapter 7 Filings

Nondischargeable debts include alimony and child support, some taxes and fines, some student loans, debts for death or injury caused by driving while intoxicated, and any debts you fail to disclose in your bankruptcy petition.

Bankruptcy will stay on your credit report for seven to ten years and could knock your credit score down by as much as 200 points. 

However, that does not mean you won’t be able to borrow money for that entire period. As years pass, lenders will be more forgiving and you’ll have a better shot at loan approval.

READ MORE: Types of bankruptcy explained

What is the Statute of Limitations on Debt in Illinois? 

The statute of limitations is how long a creditor can take you to court to collect unpaid debts. This period begins as soon as you miss the initial payment on a debt that’s due. In Illinois, the amount of time depends on the type of debt you have:

  • Oral agreements: 5 years
  • Written contracts: 10 years
  • Promissory notes: 10 years
  • Open-ended accounts: 5 years

The statute of limitations is 4 years for auto loans and 20 years for state tax debts.

Contact: Illinois Attorney General Office

After the statute of limitations expires, the debt becomes “time-barred.” This means the original creditor can no longer collect on it. At this point, the court can’t order you to repay the debt either. Debt collectors also can’t garnish your wages or place a lien on your car or home.

You’ll still legally owe these debts. Also, debt collectors can still contact you via phone or letter to get you to pay.

READ MORE: State statutes of limitations on debt

Debt Collection Laws in Illinois

The federal Fair Debt Collection Practices Act, the Illinois Collection Agency Act and the Illinois Consumer Fraud and Deceptive Practices Act all provide protections guaranteeing that debt collectors treat Illinois residents fairly. These laws will not, however, forgive any legitimate debt you owe

Under the FDCPA, neither creditors nor debt collectors can:

  • Use deceptive, abusive, fraudulent, or manipulative tactics to collect debts.
  • Use force or violence to get borrowers to pay their debts
  • Contact a borrower’s employer about a past-due account unless a prior agreement was made or they have a judgment
  • Sell or otherwise disclose private information to a third-party agency
  • Harass borrowers at home or work about the debt
  • Contact borrowers outside of standard business hours (9:00 p.m. to 8:00 a.m.) without consent
  • Intentionally misrepresent information

You have the right to contact a debt collector and tell them to stop contacting you, but it must be done in writing. 

Debt collectors and creditors must also provide written notification with details relating to the debt within five days of contacting the borrower. If you’ve been contacted about a debt you might not owe, you have 30 days to dispute it with a debt verification letter. In the letter, write that you don’t owe the debt and that they must provide written proof before anything else happens. However, if the collector sends you proof that you owe the debt, the debt collector is allowed to resume collection efforts.

If you owe several debts, any payment you make must be applied to the debt you choose. A debt collector is not allowed to apply your payment to any debt you believe you do not owe. If you believe the law was violated, you have the right to sue a debt collector in a state or federal court.

Where to Make a Complaint in Illinois

If you need to submit a complaint about illegal lending activities in Illinois, you can do so by reaching out to the Illinois Department of Financial and Professional Regulation. Here’s their contact information:

  • Regulator: Illinois Department of Financial and Professional Regulation
  • Address:100 West Randolph Street, 9th Floor Chicago, Illinois 60601
  • Phone: (312) 814-5145
  • Email:
  • Link to website

You can also file a complaint with the Consumer Federal Protection Bureau. The CFPB is a federal organization that enforces federal consumer financial law to foster fair, transparent practices.

More Illinois Debt Statistics

Illinois averageNational average
Average salary$63,930$59,428
Median household income$72,563$70,784
Per capita household income$39,571$36,430
Household debt$52,580$59,580
Auto loan debt$21,433$22,612
Credit card debt $6,253$6,194 
Mortgage debt$191,641$236,443
Median mortgage payment (30-year fixed)$1,717$2,823 
Average student loan debt $37,757$37,338
FICO credit score719714
Average VantageScore699701
Retirement savings$449,983$255,000
Child poverty16.16%5.2%
Overall poverty 11.9%11.6%
Bankruptcies in 202220,29389,224
Foreclosures (2022)16,941248,170
Identity thefts reported42,5581,108,609 
Percentage of unbanked residents7%4.5%
Average credit utilization ratio24%31%

Payday Lending Status in Illinois: Legal, but Heavily Regulated

Though payday lending is technically legal in Illinois, it is heavily regulated by state legislation.  In 2021, Illinois Governor J.B. Pritzker signed into law The Predatory Loan Prevention Act, which caps the interest on payday loans to a 36% APR.  

Though lenders can still technically offer short-term payday loans, they are prohibited from carrying excessive interest rates. As a result, many payday lenders have stopped issuing loans in the state.

  • Maximum loan amount: $1,000 or 25% of gross monthly income, whichever is less
  • Interest rate (APR): 36%
  • Minimum loan term: 13 days
  • Maximum loan term: 45 days
  • Number of rollovers allowed: None
  • Number of outstanding loans allowed: 2
  • Cooling-off period: 7 days after 45 consecutive loan days
  • Installment: Yes
  • Finance charges: $1 verification fee
  • Collection fees: Insufficient funds fee not to exceed $25
  • Criminal action: Prohibited

READ MORE: States where payday loans are illegal

Debt Resources for Illinois Residents Facing Hardship

Illinois offers a variety of local and state programs for residents looking for help with debt or finances. Among other things, these resources can provide low-cost or free childcare, job-related education and training, healthcare, and legal aid. Some programs can also help with the cost of rent or utilities.

Some of the main food banks in the state include:

  • Northern Illinois Food Bank – South Suburban Center: 171 S Larkin Ave, Joliet, IL; (630) 443-6910
  • Northern Illinois Food Bank: 273 Dearborn Court, Geneva, IL; (630) 443-6910
  • Northern Illinois Food Bank – North Suburban Center: 13950 W Business Center Dr, Lake Forest, IL; (847) 336-3663
  • Central Illinois Foodbank: 1937 E Cook St, Springfield, IL;  (217) 522-4022
  • Eastern Illinois Foodbank: 2405 N Shore Dr, Urbana, IL; (217) 328-3663
  • Bloom Township Food Pantry: 25 S Halsted St, Chicago Heights, IL; (708) 543-2555
  • Peoria Area Food Bank: 721 W McBean St, Peoria, IL; (309) 671-3906
  • Share Food Share Love Food Pantry: 9030 Brookfield Ave, Brookfield, IL; (630) 347-5390
  • South Elgin Food Pantry: 400 W Spring St, South Elgin, IL; (847) 931-0563
  • Lincoln Logan Food Pantry: 125 N Logan St, Lincoln, IL; (217) 732-6644

How to Apply for Unemployment Benefits in Illinois

You can apply for benefits at

You will need the following information in order to file online:

  • Your Social Security Number and name as it appears on your Social Security card;
  • Your Driver License / State ID (this will provide your weight, which is required);
  • If claiming your spouse or child as a dependent​, the Social Security Number, date of birth and name(s) of dependent(s);
  • Name, mailing address, phone number, employment dates, and separation reason for all the employers you worked for in the last 18 months;
  • Wage records (W-2 form, check stubs, etc.) from these employers may be necessary.
  • If you worked since Sunday of this week, the gross wages earned this week;
  • You must report all gross wages for any work performed, full or part-time;
  • Gross means the total amount earned before deductions, not “take home pay”, including wages in the form of lodging, meals, merchandise or any other form;
  • Gross wages must be reported the week in which they are earned, not the week in which you receive the wages;
  • If your gross wages earned in any week are less than your weekly benefit amount, you still may be eligible to receive a full or partial benefit payment);
  • Records of any pension payments you are receiving (not including Social Security);
  • If you are not a United States citizen, your Alien Registration Information;
  • If you are a recently separated veteran, the Member 4 Copy of the DD form 214 / 215;
  • Other copies of the DD Form 214 / 215 are acceptable, but the Member 4 copy is the most commonly available.
  • If you are separated from work as a civilian employee of the federal government, copies of your Standard Form 8 and Personnel Action Form 50.​

State Hardship Programs

The Illinois Department of Human Services offers a number of programs to help people facing financial hardship. You can find details on the various programs and eligibility requirements here.

Other options for people experiencing financial hardship in Illinois include:  

  • Suicide and crisis hotline: Dial 988 if you or someone you know is having a mental health crisis. This provides a connection to free, 24/7 confidential support.
  • Abuse hotline: To report abuse/neglect of persons with a mental illness or a developmental disability at a DHS-operated facility, call 1-800-368-1463.
  • Office of Firearm Violence Prevention:  This violence prevention program was developed in response to the State of Illinois’ heightened experience of loss, harm, and trauma by the hands of firearm violence.
  • The Illinois Department of Human Services’ (IDHS) Child Care Assistance Program (CCAP) helps families get the information and resources they need to find child care.
  • Chronic and Acute Medical Assistance Program: CAMA is a state-funded program that helps needy Alaskans suffering from specific illnesses get medical care.
  • Child Care Program Office: The CCPO promotes accessibility in child care by helping families with infants, school-age child care, and children with special needs.
  • CHIP: Children’s Health Insurance Program is designed to help low-income families obtain affordable health care for their children. It includes certain services, like medicine and hospital care.
  • TANF: The Temporary Assistance for Needy Families (TANF) program provides temporary financial assistance for pregnant women and families with one or more dependent children. TANF provides financial assistance to help pay for food, shelter, utilities, and expenses other than medical.
  • SNAP: SNAP is available to help low-income households subsidize their food costs. Apply for a reloadable card and use it like you would a debit card at most grocery stores.
  • WIC: The Women, Infants and Children program is designed to help certain people, including low-income women with young children, afford food costs. Most people who qualify for SNAP or TANF benefits also qualify for this program.
  • LIHEAP: The Low-Income Home Energy Assistance Program is federally funded and helps income-qualified families with heating and cooling costs.
  • CAFCP: The federal Child and Adult Food Care Program reimburses eligible organizations and daycare home providers for nutritious meals served in care settings. The program is administered by the U.S. Department of Agriculture.

Cost of Living in Illinois

Annual Mean Wage (All Occupations)$68,822
Median Monthly Rent$1,038
Value of a Dollar$1.03
Cost of Living90.8
Cost of Living Rank40
Grocery Cost Index97.5
Housing Cost Index78.3
Utilities Cost Index90.9
Transportation Cost Index102.4
Miscellaneous Cost Index94.3
Source: World Population Review (updated October 2023)

The Bottom Line

Illinois residents have a number of resources to help them break free from debt. These include debt consolidation, debt settlement, credit counseling, and local and government-run agencies.

If you need help, don’t be afraid to contact a debt relief company and set up a free consultation. Even if you decide not to hire them, they can offer valuable information that can help you if you decide to go it alone.

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