California Debt Settlement: Reduce your debt burden
If you are resident of California and looking for a debt relief program that will reduce your debt burdens without hampering your credit card, perhaps debt settlement will be the most reliable debt relief program to pay off your debts.
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The system widely prevalent in California, and better known as debt settlement, is suitable for both creditors and debtors. This is mainly because the creditors can expect something rather than nothing and the debtors can pay off their debts with a reduced sum without destroying their credit card. The program usually takes three to four years to settle the debts fully, as it requires extensive communication between debt negotiators and creditors. The debtor usually requests a debt reduction, which if approved by the creditor completes the process of debt settlement.
How does debt settlement work in California?
Debt settlement or negotiation is one of the most popular debt relief options in California. It is also an effective alternative for those who cannot repay the full debt amount.
The companies under the Better Business Bureau (BBB) primarily deal with the creditors on behalf of the debtors to give them the best plans. These procedures are usually carried out by debt negotiation lawyers, who design the best plans for debtors to settle for the lowest deal. The main aim of the negotiation is to offer a reduced negotiated sum to the creditor in order to get the debtor out of debt. If the normal procedure is followed, it can be time consuming with add-ons like taxes and interest levied on the loan taken. The debt settlement process in California and most other states follow these techniques in order to make faster payments with a negotiated interest rate that will pull debtors out of debt faster.
Debt settlement is beneficial for those who are lagging behind in their repayment plans. It should be kept in mind that while the settlement is being processed you cannot opt for any other debt relief program. Stability in your debt position can be imposed only when you keep paying the debt regularly and do no take fresh loans.
What is the time period to settle your debts in California?
Debt settlement seeks to resolve debts much faster than the options. Depending on the debt amount you should be able to settle your debts within a period of 2-3 yrs. The settlement timings can even be better if you opt for some professional help from a California debt settlement attorney.
Which debts can you consider for debt settlement?
Debt settlement can be used for all the debts that individuals generally think of settling. But settling some specific debts can be of added advantage. Mostly all of your unsecured debts fall under this category. These include:
- Credit Card Bills
- Medical expenses
- Department store cards
- Student loans
- Bounced checks
- Personal Loans
When deciding on the specific debt you can settle for the debt settlement program that suits you. California debt settlement programs often come along with added advantages that help you to repay faster. You can easily consult your debt negotiation attorney and settle for the best.
Drawbacks to consider before selecting a debt settlement program:
- There may be legal hazards associated with the proceedings. The creditor may not settle for a reduced sum from the debtor. A debt settlement attorney can help you with the appropriate advice.
- The creditor may harass you till you have made your full payments.
What are the Laws associated with California Debt Settlement?
California debt settlement laws are similar to the laws of other states. It requires that a collection agency in the process of collecting debts should stop contacting a consumer if the consumer sends a Cease and Desist letter and/or a Power of Attorney notifying the collection agency that a third party is responsible for handling all communications with the creditor. In California they not only limit you from being harassed by the collection agencies but by the creditor as well.
How will debt settlement programs affect your credit score?
The impact of debt settlement programs on your credit scores depends on the nature of your accounts and the amount of debts that are pulling you down.
In case your debt account happens to be delinquent at the time of debt settlement, then you can expect a subsequent rise in your credit card score. You have to be in constant communication with your attorney so that together you can decide upon the ways to save your credit scores. After settling your accounts you can easily improve your credit report by not getting into further debts. As you clear your current debts and do not enter into any new debts, your credit score will improve automatically. If any current account dues are on the list they will have a considerable impact on your credit score. The credit card laws explain the criteria needed in order to keep away from credit score haemorrhage. The best part of debt negotiation is that once you have cleared your debts your ability to get for future loans rises and all the dissatisfactory marks from your credit report is removed. What can be better!
What are the benefits of Debt Settlement programs?
Quickest and simplest: California Debt Settlement is one of the simplest ways to get out of debt, unlike the other processes which takes a lot of time, debt settlement is pretty fast.
Minimum repayment: By opting for debt settlement you get back on your feet by the minimum possible payment through proper negotiation with the creditors. The creditors agree upon the amount, as it is better to get something rather than nothing, and you are even saved from destroying your credit report.
Savings: If you are prudent in your choice of your Debt Settlement Company or attorney you may save thousands of dollars in the process.
Time Constraints: Debt settlement allows you to negotiate and settle your debts within 2-4 years. Therefore you can save a lot of time in the process and can engage in something constructive in the meantime.
Free from creditor harassment: As you file for debt settlement with your creditors through the help of a debt settlement attorney or agency, you can leave the burden on them. All the legal proceedings will be done by them on your behalf and you can stay safe from the harassing calls and threats from creditors.
What other options can you consider for settling your debts?
It all depends on the debt amount you want to settle and the rate of interest that you are paying on your debts. California debt relief programs offer you debt consolidation and debt negotiation options depending on your financial state. The last resort is the California Bankruptcy program which can pull you out of debt almost instantly. However, bankruptcy hampers your credit score severely. Before settling for anything, make sure you are informed about the pros and cons of each. If things gets out of control make sure you take the right decision. P rofessional advice in such matters helps, as a lawyer can negotiate the best deal for you using their expertise. Make sure you do your homework completely before selecting either a debt plan or hiring a lawyer.