Rolling Meadows-based Home Builders Association of Greater Chicago Friday filed Chapter 11 bankruptcy in U.S. Bankruptcy Court in Chicago.

The association has about $2 million in debt and a dwindling membership base, caused by the recession and eroding housing market, said the association's attorney, William Factor of Northbrook.

Major debt-holders include The Donald E. Stephens Convention Center in Rosemont for $25,000; a loan to Tracy Hill of Cary for $40,000; Brian Keith Advertising for $20,000; Marriott Hotel and Resorts in Schaumburg for $15,000; Marvin Windows and Doors for $15,000; and the village of Addison for about $2,254.

"The leadership is counting on keep it alive," said Factor. "These have been unprecedented times in the housing industry, but they've weathered other storms."

The association had as many as 1,500 members at its height, but it's dropped to about 500 members in recent months. It also has cut its staff to one person and moved from an Addison building with a mortgage to a Rolling Meadows suite in the past month to save expenses, Factor said.

The group was founded by small residential construction firms following the end of World War II to help provide affordable housing for the nation's returning war heroes. Since then, the group reached Cook, Kane, Kendall, DeKalb, DuPage, Will, McHenry and Lake counties. The association still intends to continue providing membership services during the restructuring, such as continuing education programs for home building professionals, governmental advocacy on behalf of the home building industry and professional networking.

"Over the last year, we have made significant progress internally on transitioning HBAGC to become more reflective of the needs of the current housing market," said acting association President Tracy Hill in a statement. "Unfortunately, at the same time, factors beyond our control have created a perfect storm in the industry - a 90 percent decline in permits within the Chicagoland area, matched with an unprecedented credit crisis have made it impossible to support our current debt."