California Debt Relief

Debts make life difficult, especially in an expensive state like California. Good thing there are debt relief options in the Golden State. Read on.

If you live alone in California, you'll need at least $44,175 every year for the usual living expenses.^[1]

But what happens if you have a ton of debt? Then, your expenses will be much more expensive. You may end up spreading your budget too thin.

But that's where California debt relief comes in. Keep reading for options that can help you pay off your debts.

Does California Have A Debt Relief Program?

California does not have a debt relief program. However, several debt relief companies can offer you debt settlement and debt consolidation services to reduce your debts.

Here's how it generally works:

1. Consult with a debt relief company for your options.
   
2. Enroll in a debt relief program made for you.
   
3. Create a dedicated account for monthly deposits.
   
4. Debt relief company negotiates with your creditors.
   
5. Once a new settlement amount is reached, you can choose to approve and pay for it using the funds in your dedicated account. Or you can ask the company to renegotiate.

Here are some of the best debt relief companies in California you can check out.

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Top California Debt Relief Companies

Debt relief companies have their own list of supported debts and minimum debt amount requirements. Take note of these things before you apply.

National Debt Relief: Best Overall

Minimum debt to apply: $7,500^[2]
Fee: 15–25% of your total enrolled debt^[3]
Program length: 24–48 months^[4]

National Debt Relief has been in the industry since 2009. And it has helped over 550,000 clients since then.^[5] Clients who successfully completed their program saved as much as 46% (25%, including fees).^[6]

National Debt Relief can help you relieve your debts through debt settlement services. But the company also has a partner network for debt consolidation options, bankruptcy referrals, credit counseling, etc.

If you have good financial standing and credit, you may even qualify for a debt consolidation loan. It's a loan that can help you pay multiple debts to settle high-interest loans and avoid potential fees from each debt.

Supported Debts:
National Debt Relief has a comprehensive list of unsecured debts that qualify for debt relief:^[7]

• Major credit cards
  
• Department store cards
  
• Unsecured personal loans
  
• Certain student debts
  
• Medical bills
  
• Business debts
  
• Gas cards
  
• Bank loans from prior banks
  
• Installment loans
  
• Finance companies
  
• Repossessions
  
• Qualified business debts
  
• Cell phones (not currently used)
  
• Veterinarian bills over $500
  
• Credit unions (members who are not federal or military employees)
  
• Abandoned timeshares with current statements
  
• Judgments older than 6 months
  
• Back rent (not a current resident)
  
• Bank, overdraft, and associated fees

Pros + Cons:

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• Get a free savings estimate today
• See how quickly you can be debt free
• No upfront fees and no obligation

Some creditors might take legal action against you. The next company may be a better choice when this happens.

Freedom Debt Relief: For Legal Support

Minimum debt to apply: $7,500^[8]
Fee: 15–25% of your total enrolled debt^[9]
Program length: 24–48 months^[10]

Freedom Debt Relief started in 2002 and has been settling 31,000 accounts every month on average.^[11]

The company negotiates with your creditors so you can settle your debts for a lower amount. It also partners with the Legal Partner Network, where you can access experienced attorneys in case of lawsuits from your creditors.

You do need to pay a one-time set-up fee of $9.95 for your dedicated account. There's also an additional fee of $9.95/mo as a service fee.^[12] However, you don't need to pay Freedom Debt Relief for their fees unless you approve new settlements.

Plus, with the Program Guarantee, Freedom Debt Relief issues a refund (once you graduate) if settlements and fees are more than what you originally owe.

Supported Debts:
Freedom Debt Relief only negotiates for unsecured debts, like:

• Credit card debt
  
• Personal loan
  
• Department store cards
  
• Medical debts
  
• Selected business debts

Pros + Cons:

If you prefer a company that prioritizes debt consolidation, the next option may be the better choice.

Accredited Debt Relief: Debt Consolidation

Minimum debt to apply: $10,000
Fee: 15–25% of your total enrolled debt
Program length: 24–48 months

Accredited Debt Relief has been in the industry for over 12 years, helping over 300,000 clients.^[13]

It has also paid off more than $3 billion in client debts during this time. And as a client, you can save up to 55% (before fees) of your enrolled debt with your program.

Accredited Debt Relief may also offer you a debt consolidation loan from one of its affiliates. It's a large loan you can use to pay off smaller debts. You get to save money with this loan by eliminating high interest and potential fees from individual debts.

Supported Debts:
Accredited Debt Relief can help you settle unsecured debts, like:

• Credit card debt
  
• Personal loan
  
• Department Store Credit Cards
  
• Medical Debt

Pros + Cons:

If you want to settle your debts faster, check out Americor's debt relief program.

Americor: Shortest Debt Relief Program

Minimum debt to apply: $7,500^[14]
Fee: 14–29% of your total enrolled debt^[15]
Program length: 20–48 months^[16]

Americor has offered debt relief services since 2009 and has resolved over $2 billion in debt.^[17] It has helped over 200,000 clients since it started. And clients who finished their program saved 45% (on average) before fees.^[15]

The company offers both debt settlement and debt consolidation options. And you can be debt-free in as fast as 20 months. You may even get your first settlement offer within 4–7 months if you've saved up at least 25% of each enrolled debt.^[18]

You may also qualify for a debt consolidation loan worth as much as $45,000 from Americor's partner lender.^[19] You can use your new loan to pay off smaller individual debts and save on interest fees and other charges.

Supported Debts:
Americor can help you settle the following unsecured debts:

• Credit cards
  
• Personal loans
  
• Lines of credit
  
• Medical bills
  
• Business debts
  
• Selected student loans

Pros + Cons:

If you prefer a debt relief company with solid experience and has lasted long in the industry, check out J.G. Wentworth.

J.G. Wentworth: Most Experienced Company

Minimum debt to apply: $10,000^[20]
Fee: 18–25% of your total enrolled debt^[20]
Program length: 24–48 months^[21]

J.G. Wentworth has offered financial services since 1991, making it the oldest company on the list. It has been accredited by the BBB since 1996 and has established relationships with major creditors.

Clients who finished their debt relief program saved 51% of their enrolled debts (on average), excluding fees.^[20]

If you live in California, you can opt for personal loans to consolidate your other debts. You can borrow up to $25,000, depending on your debts, credit eligibility, and financial capacity.

Supported Debts:
You can enroll unsecured debts, such as credit cards and department store cards, in your debt relief program.

But it's best to inquire with J.G. Wentworth during your free consultation if they support your specific debt types.

Pros + Cons:

Knowing all your options, keep reading to know how these companies actually work.

How Does Debt Relief Work?

You must stop making your debt payments every month before you can enroll in your debt relief program. This way, your creditors are more open to debt negotiations.

These negotiations can last a few months. It can last longer if you want representatives to renegotiate for a lower amount.

Since you're missing monthly payments, expect to receive negative items on your credit report.

Usually, you need to pay the negotiated debt in a lump sum. If you want to settle the negotiated amount for a longer term, the creditor must first accept the terms.

California Laws On Debt Relief

There are two main laws you need to keep in mind regarding debt relief services in California:

• Telemarketing Sales Rules (TSR)
  Debt relief companies are required to adhere to ethical practices and abide by Telemarketing Sales Rules (TSR).

  They can't charge upfront fees and they have to disclose information to those who want to sign up for a program.^[22]

• California's Fair Debt Settlement Practices Act
  This requires debt relief companies to disclose the rights of consumers. Debt relief companies are also prohibited from misrepresenting information and asking for upfront fees.^[23]

As a client, you have the right to cancel your program. Debt relief companies should let you know about their cancellation policy.

The purpose of laws and compliances is to protect you from debt relief companies operating a scam. It's not uncommon for the CFPB and FTC to shut down and file cases against debt relief businesses that are not legally compliant and ethical.

California Statute Of Limitations On Debts

The Statute of Limitations (SOL) for debts in California is 4 years. ^[24] This means debt collection agencies and creditors can only file a lawsuit against you within 4 years from the date of delinquency (date of last payment).

However, SOLs may be revived under certain circumstances. For example, when you make a promissory note to settle your debt and pay some of the amount you owe. This restarts the countdown by unpausing the date of delinquency.

Different Types of Debt Relief

Debt relief refers to a variety of debt solutions that aim to make your debts more manageable. The overall goal of debt relief is to reduce your debt and eliminate potential fees associated with each debt. You may also negotiate to change terms.

Debt relief methods include:

• Debt settlement
  Debt settlement involves negotiating with your creditors to settle your debts for a lower amount. You may also request your debt relief company to negotiate new terms.

• Debt consolidation
  Debt consolidation merges multiple debts. This is so you can settle high-interest loans, get rid of fees, and focus on one repayment only.
  Debt Consolidation Example: Balance Transfer Card
  With a balance transfer card, you move high-interest credit cards into a new credit card with higher limits and lower interest rates. You will then focus on paying off the balance transfer card.

• Debt Management Plan (DMP)
  A debt management plan is a structured repayment plan for enrolled debts. You can get a DMP from reputable credit counseling agencies. Most DMPs last 3–5 years. Think of it as an aggressive way to settle debts.
  For example, you go to a credit counseling agency to enroll in a DMP for your credit card debts. Credit counselors will negotiate with your banks to enroll the balance in a DMP, waive fees, and reduce interest rates.

• Credit counseling
  Credit counseling agencies offer various services that include debts, credit, and financial management. These agencies aim to assess your debt, educate you about finance, and assist you in dealing with unsurmountable debt.

• Bankruptcy
  Bankruptcy is a legal process that lets you discharge debts or restructure them into a more reasonable payment plan.

  However, this can have a heavy impact on your credit. A bankruptcy record can last up to 10 years in your credit report, and filing for one can be a complex process.^[26] You'll need the help of a bankruptcy attorney to get the best outcome.

Now that you know the methods of debt relief, get to know which specific debt types are supported.

What Debts Are Eligible For Debt Relief?

Debt relief companies only qualify unsecured debts, such as:

• Credit cards
  
• Personal loans
  
• Credit lines
  
• Store cards
  
• Repossessions
  
• Collection accounts
  
• Selected student loans
  
• Selected business loans

Through the free consultation, you can inquire if you have other types of unsecured debts you want to enroll in your program.

Note that debt relief companies cannot negotiate and settle your secured debts like your home loans and auto loans. Secured debts are tied to an asset. This means if you end up defaulting, lenders can still go after your assets, like your house and vehicle.

How To Choose A Debt Relief Company

Not all debt relief companies are the same. Here are some important points you can consider when selecting an option:

• Debt relief services
  Most debt relief companies offer debt settlement and debt consolidation. But these companies also typically have partners you may get referred to for better options.

• Fee structure and charges
  The more debts you have, the more expensive your fees may be. Most debt relief companies typically charge around 15–25% of your enrolled debts.
  It's illegal for debt relief companies to charge upfront fees. Avoid services that demand upfront payment BEFORE performing negotiations.

• Repayment timelines
  Tell your debt relief company if you need to extend your repayment terms. That way, they can negotiate with your creditor to pay monthly instead of lump sum. Note that not all creditors may agree to this arrangement.

• Minimum debt amount
  Companies typically require at least $7,500 worth of debts to qualify for debt enrollment.

• Locations
  The companies on this list are available in California. But other companies outside of this list may not be. Make sure to inquire about the company's location when you make a call.

• Transparency
  Look for companies that have a proven track record and have the licenses to offer debt relief services in California.

• Certifications and accreditations
  The debt relief industry has many organizations and agencies to regulate debt relief services.

  Look for companies with accreditations from the American Association for Debt Resolution (AADR) and the International Association of Professional Debt Arbitrators (IAPDA).

Having said all this, here's how we selected the debt relief companies on this list.

Methodology

We've chosen the 5 debt relief companies according to:

• Experience

  The companies on this list have more than 10 years of experience in debt relief. They have settled debts for hundreds of thousands of clients.

  Most even have a track record of settling billions worth of debts and have an established reputation in the industry.

• Reviews and ratings

  We've reviewed the actual experiences of clients from review platforms like BBB, Trustpilot, and ConsumerAffairs. We made sure to consider the thousands of reviews in giving the best possible list.

• AADR accreditation

  We've chosen companies that are accredited and members of the American Association of Debt Resolution (AADR).

  The AADR holds its members to the highest standards for debt relief. It also conducts robust audits for its members every two years. This means the debt relief companies on this list are assessed for compliance regularly.

• IAPDA accreditation

  The International Association of Professional Debt Arbitrators (IAPDA) trains, certifies, and provides accreditation to debt relief companies and professionals.

  The IAPDA accredits the majority of the companies on this list. These companies are assessed and validated against federal and state compliance.

  This means the professionals working in these companies have certified industry training in sales, customer service, and debt negotiation.

Imagine Living Life Without Debt

• Get a free savings estimate today
• See how quickly you can be debt free
• No upfront fees and no obligation

Apply for Debt Relief

Read Review

Bottom Line

Debt relief can be your next solution for managing debt and rebuilding your life. There are many options to choose from if you live in California.

Just make sure to note the company's minimum debt requirement, fees, and program length when you apply.

References