Illinois legal aid says debt collectors may agree to accept less than the full balance

"This website isn't just for people who have been sued."

Illinois residents who are having trouble paying down debt may have more options than they think, including the chance to settle for less than the full amount owed.

Illinois Legal Aid Online says creditors are often open to negotiation, and it has launched a free tool to help people understand what steps they can take.

What to know

The organization’s Debt Help Illinois site works like a chat, guiding users through questions and offering advice based on their situation. WSIU reported that the tool addresses credit card debt, medical debt and other financial issues.

Illinois Legal Aid Online says nearly 20% of Illinois residents with credit card debt have accounts that have been sent to collections.

Steve Uhrich, the group’s consumer debt solutions product manager, said many people assume an unaffordable balance means they are stuck.

"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 told 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 context

Polling cited by WSIU found that about one-quarter of Americans worry about debt every day.

The outlet also reported that research from The Pew Charitable Trusts found default judgments in more than half of Chicago debt collection cases. Those rulings can allow creditors to garnish wages or withdraw money from bank accounts. Uhrich said once a creditor decides to sue, failing to act becomes especially risky.

He described "the justice gap" as the difference between the legal help that is available and the amount people need. Debt Help Illinois is meant to help residents work through that gap and decide whether they should speak with a consumer attorney.

What can be done?

Uhrich said people should be cautious if a debt settlement company asks for money upfront or promises to settle an account for less than the amount owed.

Once an account falls behind, creditors are usually willing to talk, Uhrich said, which may give consumers a chance to negotiate directly.

"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," he said.

Debt Help Illinois also outlines special consumer protections that apply when dealing with collection agencies and debt buyers, according to WSIU.

Uhrich stressed that people do not need to wait until they are sued to ask for help.

"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 examine settlement offers, debt cancellation, housing disputes, growing balances and Medicare payment options.

• With U.S. card debt at $1.26 trillion, collectors' initial settlement offers may still leave room to negotiate.

• 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 billed for three months of premiums, prompting advice to use Easy Pay.