Debt Settlement Programs in Illinois: how it works

Debt Settlement Programs in Illinois help residents come up with a resolution with their creditors about their debts. This is good for you if you are facing a huge debt and looking for relief. The Debt Settlement Consumer Protection Act in Illinois safeguards and protects residents and consumers who go into debt settlement with debt settlement companies who do their business with unethical practices.

Debt Settlement Programs in Illinois: what is it?

The average consumer debt, not including mortgage, increased by 4.7% in the 2nd quarter of 2023. Because of this, consumers have been looking to debt settlement companies to help them settle their debt for a lump sum in exchange for paying their creditors less than the amount they owe.  However, debt settlement companies are different from debt management companies, which focus on helping consumers pay their bills longer by assisting them to get lower minimum payment requirements.

Illinois’s Debt Settlement Consumer Protection Act has established strict guidelines to protect consumers.  Here are some of it:

• Disclosure of terms before signing a contract
• Capping upfront fees at $50
• Limiting settlement fees to 15% of the amount saved by the consumer
• Allowing consumers to cancel contracts at any time and be eligible for refund of fees

What to expect from debt settlement providers in Illinois

Here are some of the information you can expect to know from debt settlement providers in Illinois:

• Number of accounts enrolled
• Principal amount of debt at the time each account was enrolled
• Status of each account
• Information on whether the account has been settled
• Total amount of feed paid to the debt settlement service provider

All in all, when considering applying for debt settlement programs in Illinois, please make sure that you deal only with legitimate service providers who will follow the Debt Settlement Consumer Protection Act regulations. Remember, as you negotiate and reduce your debt burden, choose your debt service provider wisely.