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How to find relief when debt becomes a burden

Sometimes individuals have a problem with debt because of out-of-control spending habits, but sometimes debt overwhelms homeowners and others unexpectedly. A shift in the housing market, a job loss, an accident or an extended illness that causes medical bills to pile up — all of these situations can happen without warning, leaving Illinois families struggling under the weight of debt they cannot repay.

The Federal Trade Commission offers consumers suggestions for dealing with overwhelming debt. First, talking with those owed may help. Being honest about life situations that have made repayment difficult may be the first step in getting the debt to a manageable payment plan. If a modified repayment plan is not possible, the FTC says it may be a good idea to consider a “debt relief service.”

Debt relief services include settlement options and credit counseling. The FTC advises checking with the state’s Attorney General before choosing a debt relief provider. Making sure there are no complaints on file for the agency is an important step to take before sharing the detailed personal information required for financial assistance. 

The Consumer Financial Protection Bureau gives details on credit counseling services. Typically non-profit agencies, these organizations offer access to trained advisors. Just a few of the options they may be able to assist with include the following:

  • Getting copies of credit reports
  • Developing a plan for managing debt
  • Creating a workable budget
  • Providing advice for budgeting and debt management
  • Offering workshops on finances

The CFPB emphasizes looking for a credit counseling service that does not force clients to rush into a debt management plan but rather spends the necessary time to fully understand their financial situation before making recommendations.