Chicago To Sell $1B In Debt From Unpaid Fees Despite Uncertain Buyers

What the city is doing

The city will sell its right to collect roughly $1 billion of outstanding fines and fees in exchange for an upfront cash payment of about $89–90 million (roughly 9 cents on the dollar).
This portfolio includes long‑past‑due obligations such as parking tickets, camera violations, and unpaid water bills owed by residents and businesses.
Once sold, the buyer—not the city—will own the receivables and keep any amounts it manages to collect; Chicago gets the one‑time lump sum and no cut of future recoveries.

The 2026 budget relies on about $89 million from this debt sale to help close an overall deficit estimated at roughly $1.1–1.2 billion.
City officials argue much of the $1 billion is unlikely to be collected in full and that outsourcing collections avoids internal costs and delays while generating immediate budget relief.
Chicago already carries more than $10 billion in bonded debt and faces rising costs, including hundreds of millions paid out in police‑misconduct settlements in recent years.

Chicago would execute a bulk sale or securitization of receivables to a private buyer, often at a steep discount reflecting age, collectability, and political/PR risk of aggressive collections.
The sale shifts collection risk and operational burden to the purchaser, who may use typical third‑party collection tactics—letters, calls, litigation, and payment plans—subject to federal and state consumer‑protection laws.
Because this is an unusually large municipal fees portfolio, city officials have warned that investor appetite is uncertain and pricing could be costly.

Mayor Brandon Johnson previously criticized the idea of selling city debt at a steep discount as “morally bankrupt,” warning it could unleash more aggressive private collectors on low‑income Chicagoans.
Critics argue Chicago has increasingly relied on fines and fees to plug budget holes, with per‑resident fine revenue more than tripling since the 1990s, disproportionately impacting Black and Brown neighborhoods.
Supporters counter that the city is already ramping up internal collections and that a sale is just another way to monetize a weak asset, not fundamentally different from stepped‑up in‑house enforcement.

Once the sale closes, people with old city debts would likely deal with a private collector rather than the city, which may limit access to existing municipal relief programs unless carve‑outs are negotiated.
Chicago currently offers programs like Clear Path Relief and Utility Billing Relief that provide income‑based payment plans and partial forgiveness after a period of on‑time payments; these apply to city‑held debts and may not extend to debts sold off.
For individuals, the practical impact is a potential shift from slower or inconsistent city collection to more systematic collection efforts by specialized firms, though still constrained by law and any contractual terms the city imposes in the sale.