Debt can be overwhelming, but you don’t have to go through it alone. There are options for debt consolidation in Illinois. Asking for help is the first step toward financial independence. With hard work and determination, you can break the cycle of indebtedness and regain your financial stability.
Credit card debt can be a real burden, especially for Illinoisans. The average cardholder in the state owes over $7,000 and uses 28% of their available credit. This is just shy of the 30% credit utilization limit that can hurt your credit score. While Illinoisans may not have the worst credit card debt problems in the nation, they certainly face challenges in managing their finances.
Illinois Credit Card Debt Stats
- Average credit card debt per household: $7,278
- Average credit limit available: $17,837
- Most popular credit card: Travel rewards
- The average credit utilization ratio: 28.07%
- The average number of cards: 3.14
- % of delinquent accounts (at least 90 days past due): 6.3%
- Average credit score: 683
Options For Debt Relief In Illinois
Now that you’ve decided to get serious about paying off your debt, it’s time to figure out the best way. Your personal finance habits, the total amount of debt you have, and your credit score all play a role in determining the best strategy for paying off your debt. Read on for a breakdown of some common approaches to paying off debt.
Debt Consolidation
Doing debt consolidation in Illinois may be a good option for you if you feel you are in over your head with the amount of money you owe and the number of payments you need to keep track of. With debt consolidation, you can combine some or all of your loans into one loan and make one monthly payment. This can be a simple and effective way to manage your debt. However, it is important to note that people with poor credit scores may have difficulty qualifying for a decent interest rate on a debt consolidation loan.
Refinance
Before refinancing your student loans, auto loans, or mortgages, there are a few things to consider. One important factor is your credit score – has it improved since you took out the original loan? Additionally, what is your current debt-to-income (DTI) ratio? A lower interest rate could save you money in the long run, but there are also fees and costs associated with refinancing that could offset any potential savings. It’s worth researching and calculating to see whether refinancing makes sense for your situation.
Balance Transfer Card
Do you have a lot of debt on high-interest credit cards? You may be able to save money by opening a balance transfer credit card. With this card, you can transfer your existing credit card balances to the new card. The new card may have a lower interest rate or, in some cases, a 0% introductory interest period lasting 12 to 21 months. This means you can pay off your credit card debt interest-free for a set period. However, you often need an excellent credit score to qualify for a 0% intro APR. You may also have to pay a one-time balance transfer fee.
The best balance transfer credit cards will help you pay off your debt within the introductory rate period. This can save you money in interest and help you get out of debt faster. However, before you sign up for one of these cards, make sure that you can realistically pay off the amount of debt you have. Otherwise, you could end up paying even more than you would.
Debt Management Plans
Debt management involves working with a nonprofit credit counseling agency to create a plan for repaying your debt. This plan may also include learning how to better manage your finances so that you can avoid falling into debt again in the future. The process is relatively simple: each month, you pay the agency, which distributes the funds to your creditors on your behalf.
There are many benefits to pursuing debt management to deal with your debt problems. First, it can help reduce the stress and anxiety that constantly worries about money.
Bankruptcy in Illinois
Considering bankruptcy if you’re swimming in debt you don’t expect to escape. Just ensure you’re educated on your options and know the lasting impact it likely will have on your credit.
Unfortunately, bankruptcy has a strong stigma attached to it. People who file for bankruptcy often feel embarrassment and guilt. But in reality, bankruptcy is fairly common, and it’s a viable last-resort option for many Illinoisans.
Bankruptcy can provide relief from overwhelming debt. Under bankruptcy law, different types of bankruptcy may be filed, each providing different options for handling debts.
One type of bankruptcy is “liquidation” or “straight” bankruptcy, which allows you to sell your assets to pay off your creditors. This type of bankruptcy may be the best option for those with few assets and who want to get rid of their debt as quickly as possible.
Final Thoughts
You’re on the right track to getting your finances in order. You’ve looked into debt relief options available in Illinois and now better understand the laws and regulations surrounding this topic. The next step is to figure out which plan will work best for you to finally become debt-free.
