Debt Relief California
With much of California seeing more than 260 sunny days per year, the Golden State lives up to its name. There’s something for everyone, from surfing and skiing to stunning coastline views—not to mention tourist destinations such as Disneyland, Hollywood, wine country, and dozens of national parks. No wonder that living in California is a dream for many Americans.
Unfortunately, having everything at your fingertips comes at a price. The State of California has the second highest cost-of-living rate among all states, just behind Hawaii. Californians also bear the brunt of high housing costs and local taxes compared to the national average, all of which can lead to significant credit card debt just to stay afloat.
California Credit Card Debt
Compared to the federal levels, the average household credit card debt in Los Angeles is $12,905, while the average in San Jose is $12,301. Unfortunately, these amounts can take years (or even decades) to pay off. Many Californians can only afford to pay the minimum payments on their credit cards, which go mostly toward paying interest rather than decreasing the principal debt amount. Families get stuck on the “hamster wheel” of credit card debt with no way out. When they cannot afford the monthly payments to creditors, they fall into debt delinquency, and sooner or later they face debt collectors.
Use the calculator here to find out how long it will take to pay off your debt through minimum payments alone—and how much extra you’ll pay in interest!
What Causes Credit Card Debt?
It is very easy for a consumer to have debt in California. For example, it doesn’t take much for households to find themselves owing thousands of dollars on their credit cards.
Low income
When the cost of living is high and incomes don’t match it, everyday expenses become a burden. That is when people turn to their credit cards to pay for necessities such as food, gas, and utilities.
Many households find it difficult to make ends meet, particularly towards the end of the month and until they get their next paycheck. Most people in California live paycheck to paycheck and have to be careful with their income and expenses. When incomes simply can’t pay for life’s expenses, credit cards are the fastest and easiest way to cover the gap.
Making only minimum monthly payments
Banks make money by charging interest on any loan they provide. Credit cards are a type of loan and they carry double-digit interest rates, often close to 20%.
Many people think that by paying the minimum payment required, they are paying off their credit card debt. This, however, is not true. Minimum payments barely cover the interest charge and pay little of the actual credit card balance.
Minimum payments are adjusted according to the credit balance and it takes a long time to repay a credit card just by making minimum payments. Many households fall into the minimum payment trap and end up paying a lot of money in interest while their balance remains the same.
You don’t have an emergency fund
It’s good to have an emergency fund to cover unexpected costs. Life is unpredictable: you might need to support a family member during an emergency, your car might break down, or your home might need an urgent repair that you haven’t budgeted for.
If you can afford an emergency fund, when an unexpected expense happens, you will be able to better cope with the situation. If you don’t have an emergency fund though, unexpected expenses need to be paid through other means. If your income can’t cover them, credit cards will. Unfortunately, unless you have a clear plan about how you are going to pay this extra debt, most unexpected expenses quickly turn into credit card debt.
Medical expenses
Medical bills can be overwhelming, even with insurance. The average health insurance deductible is more than $1,700. When people can’t cover it, they often pay for their medical emergency with their credit cards.
Things are even more difficult for uninsured people who have to cover the whole medical emergency with out-of-pocket money. In this case, a medical bill can easily ruin their finances and turn into a medical debt that is not easy to repay.
Student loan
Student debt is another common kind of debt. According to a report by the Institute for College Access and Success, the average student debt for California graduates in 2019 was $22,651.
However, this number can vary greatly depending on the type of institution and degree program. Students who attend private universities or pursue graduate degrees may accumulate much higher levels of debt. It is not certain that the average California graduate may be able to repay student loans for a few years, either, given the high cost of living and low starting wages, especially in places like San Diego or San Francisco.
California Debt Relief Programs
Debt can be a crippling burden on a person, family, or business. Thankfully, there are several debt relief options available to help repay or alleviate it and become debt free.
Credit counseling
Credit counseling can help people better understand their finances. A credit counseling agency can help manage your income and expenses so that you get a clear picture of how much is owed and how to use your earnings in the most efficient way. Small changes can have a huge impact on your budget and can leave enough room to repay your credit card debt beyond the minimum payment. If you need help with your debt relief options, please contact us today.
Debt consolidation in California
Debt consolidation loans roll together credit card debts and other types of unsecured debt into one. In order to qualify for a debt consolidation loan, you must have at least two types of debt, which may include credit card debts, personal loan debts, medical debts, or private student debts.
Debt consolidation loans help you repay all your existing debts. You then have one consolidation loan to repay with one single monthly payment. Debt consolidation loans typically have much lower interest rates than credit cards, which means you get to repay your debt for less money.
Also, debt consolidation loans come with fixed interest rates and fixed payments throughout the repayment period. This makes it easier to keep track of. You can even negotiate the repayment period, which usually stretches from 12 to 72 months.
California Debt Settlement Programs
With a debt settlement program, you negotiate with your creditors to reduce your overall debt. Your Americor debt specialists can negotiate on your behalf with your credit institution. They present information such as your income, debt level, and other financial data and explain the sources of your financial hardship to show that you need some debt reduction.
Debt settlement often reduces debts by 25% to 50%—which is significant debt relief. You are then asked to pay the remaining amount. While debt settlement impacts your credit score, credit card debt also hurts your credit score. With debt settlement, fast credit repair is possible and you can improve your credit score within one to two years.
Debt settlement for your credit card debt can help regain your financial freedom and face the future on a safer footing.
Debt management
Debt management for California residents devises a Debt Management Plan (DMP). This program lets you negotiate with your creditors lower interest rates to help you repay your debt. You can also ask for a longer repayment period and for them to waive late fees. Debt management programs thus create a path for you to repay your debt with easier terms. An Americor debt specialist can provide you with more information about Debt Management Plans.
Bankruptcy
If it’s impossible for you to overcome your credit card debt or any other type of debt, you can file for bankruptcy. This is a legal process during which an attorney presents your case to the court. They show the level of income and debt and all your previous efforts to repay your debts.
Bankruptcy can reduce your total debt to a significant degree but you may lose some of your assets. Even if bankruptcy is a last-resort solution to debt, it’s still an important one. Bankruptcy stays on your credit record for 10 years and your credit score takes a hit, although it will recover after a period of time. It may, however, be the right option for getting out of your financial troubles if your debts are stifling you. Ask for legal advice from a bankruptcy lawyer to find out more.
Debt Relief in California with Americor
Americor debt specialists are professionals with extensive experience in debt relief assistance. We have helped thousands of people in California work through their credit card debts. We have found viable debt solutions to help households overcome debt.
Americor is a leading company in debt relief and our debt specialists are experienced and dedicated to helping Californians. We offer advice and complete services and solutions to help consumers pay off their credit obligations and get the fresh start they need. Our solutions apply to anyone who needs help with their personal finances. To find the best debt relief for you, contact us today and talk to a professional debt specialist free of charge.
California Credit Card Debt Forgiveness
If you are struggling with credit card debt and want to get off the hamster wheel of debt, there are several types of California debt relief programs available to support you and stop your troubles. Get started by checking out our website and the links below for a wide collection of content on a number of topics related to options for debt relief, including:
Our Clients Say...
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Lannie D.
“In 2020, I was drowning in debt. I enrolled in Americor for my 10 creditors for $110,000… and today (three years later) I have cleared my entire balance. It was not an easy process, but Americor guided me through and I am debt free!”
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Matthew E.
“I was down $80k in business debt, and I remember hearing Americor radio advertising. My credit score was down to 570 from 810. I’ve been in the program for over 3 years. It works, just be patient. And my credit score is currently back up to 710!”
