Illinois debt relief programs
Banks, credit unions, internet lenders, and debt relief firms are among resources that citizens can use to get debt relief in Illinois (both nonprofit credit counseling agencies and for-profit companies).
Debt management plans, debt consolidation loans, nonprofit debt settlement, conventional for-profit debt settlement, and bankruptcy are the five main debt relief choices. Depending on the consumer’s financial status, each program offers advantages and disadvantages.
The majority of alternatives concentrate on getting rid of credit card debt, but debt relief programs may also be utilized to get rid of personal loans and other types of unsecured debt.
Here is a comparison of the advantages and disadvantages of the various Illinois debt consolidation programs.
Management of Debt
Debt management plans are programs lasting three to five years that also include free credit counseling. The objective of debt management is to get your credit card debt’s interest rate down to about 8%. Your monthly payment should go down as a result, and the payout time should go shorter.
You provide a non-profit credit counseling organization a certain monthly payment, and they divide it up among your creditors according to a predetermined amount.
Loans for Debt Consolidation
Low-interest debt consolidation loans are used to pay off high-interest debt, typically credit card debt. A consolidation loan is a sizable loan intended to pay off all outstanding credit card debt.
Instead of making three to four credit card payments each month, you only make one to the bank or credit union. Your credit score and your willingness to offer collateral—such as your house or car—as security for the loan will determine the interest rate.
Charitable Debt Settlement
A recent choice is nonprofit credit card forgiveness, commonly referred to as nonprofit debt settlement. Over the course of 36 months, the customer pays off 50–60% of their credit card bill, with the remaining amount being forgiven at the end of the program.
Since the IRS views the forgiven debt as income, it will be taxed if it exceeds $600.
Nonprofit debt settlement has the advantage that there is no haggling involved. Lenders determine the amount that must be repaid in advance. The drawback is that you must not have paid a credit card bill for more than 180 days in order to be eligible.
