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Review California Debt Relief Programs for 2023

California (CA) credit card debt relief, settlement and consolidation programs are needed more than ever before.

source: COVID-19 Impact: Changes to Consumer Debt and Credit pulled from
  • Since the COVID-19 pandemic in California, debt balances increased by 2%. This number is not huge, but it’s an increase. And it gets even worse as of 2023–
  • California Credit Card Debt and Auto Loan Delinquencies are at a 10-Year high.

california credit card debt relief

According to an article in the Washington Post, “More Americans are falling behind on their car loan and credit card payments than at any time in more than a decade.”

Over the course of 2023 as interest rates have risen, so have credit card delinquency rates in California.

Consumers are having to choose; “Should I pay for my groceries or credit card bills?” Well rest assured, the best CA debt relief, settlement and consolidation programs can help you find a solution, allowing you to continue paying off your debts and buying groceries for your family. 

Before you apply for a consolidation loan or sign up with a CA debt settlement company, take your time and read this debt relief guide. Californians have many options, from the snowball method to debt invalidation services. Know what scams to avoid. Know the difference between California debt relief programs. Know the pros and cons of each option.


California Debt Relief Programs Explained:


Option 1: CA Debt Validation Program

A Validation Program challenges the validity of an account, and if it is proven to be legally uncollectible, you may not have to pay the debt. These programs typically take around 36 months to complete.

Most unsecured accounts, including credit cards, medical bills, repossessions, and unsecured personal loans, can be included in a validation program. However, certain creditors and locations may not be eligible. For instance, Discover credit cards do not qualify.

It is not recommended to sign up for a debt validation program to help resolve credit card debt. Validation services can be helpful in invalidating some of your debt if it’s in collections, has expired the statute of limitations, or if you believe that information about an account is being incorrectly reported in your credit report.

However, some validation companies market their program as if it’s a debt elimination program that exploits special loopholes in California laws and debt collection regulations to eliminate your debt. It’s crucial to note that debt validation does not reduce or pay off your debt. Any program being pitched to you that sounds too good to be true, most likely is a scam.

If you have valid debts and attempt to use a debt validation program to resolve them, there is a chance you could be sued by creditors, leading to credit card judgments that could escalate into lawsuits.

Option 2: CA Debt Settlement Program

CA Debt Settlement Programs can negotiate your credit card balances and unsecured debts down by approximately 30%, including all fees, through an A+ Accredited Debt Settlement/Negotiation Law Firm.

You can become debt-free in 24-48 months. Discover credit cards and all major credit card debts qualify for debt settlement in California. Nearly any type of account, including repossessions, medical bills, and unsecured personal loans, can be resolved with a settlement plan.

Option 3: CA Consumer Credit Counseling Programs

CA Non-Profit Consumer Credit Counseling Programs consolidate credit card payments into one payment, reducing the amount of interest a person pays and helping them become debt-free in under five years.

Visit the Department of Justice’s website to search for a licensed consumer credit counseling company in CA.

Consumer credit counseling programs in CA have minimal negative affect on credit scores because clients remain current on credit card payments. Late payments can even be re-aged to be current, allowing borrowers who have fallen behind on payments to catch up to speed and get late fees waived.

Option 4: Debt Consolidation Loans in CA

Low-interest “Debt consolidation Loans” in California can be obtained through a local credit union or by using a free online marketplace like Credible.

Prosper’s peer-to-peer lending is another excellent option for personal loans.

Benefit of CA debt consolidation loans

While GFS does not offer consolidation loans, we recommend this option if your primary concern is to preserve a high credit score and escape high-interest accounts.

Another benefit of using a loan to consolidate your bills is that you can include both secured and unsecured accounts. A home equity line of credit can also be used for consolidation because they often offer the lowest monthly payment and interest rate.

However, there is a risk involved in this approach, as failure to make timely payments may result in the loss of your property.

Option 5: CA bankruptcy debt relief

For Bankruptcy Debt Relief in California, you must consult with a California bankruptcy attorney. We mention bankruptcy because it can be a solution for individuals facing extreme financial problems that do not qualify for debt relief programs. What constitutes “extreme financial problems”?

An example of a situation that would disqualify someone from a debt relief program in California is if they have two credit card judgments and are on the brink of having their home foreclosed.

In such cases, Chapter 7 bankruptcy could lead to the dismissal and elimination of the judgments. Alternatively, Chapter 13 bankruptcy could result in an affordable debt repayment plan, allowing the consumer to retain their home and pay off their bills over five years.

Compare Pros and Cons of California Credit Card Debt Relief Programs

The following infographic explains the pros and cons of each CA credit card relief program.

Best California Debt Relief Programs as of 2020

Are you ready to apply for debt relief? California residents can get a Free Consultation Today! Call now at (866) 376-9846. 


How to Sign Up For Debt Relief, Settlement & Consolidation Programs in CA

Contact one of the best debt consolidation companies for a free consultation.  For personal loans, check out 2023’s top lenders. 

California Debt Statistics

Credit Card Debt Statistics & Debt Relief Programs in California

The Statute of Limitations on a Debt (California Laws)

Did you know that the Statute of Limitations in California on a credit card debt is only four years, compared to six to seven years for most other states? If it’s been over four years since you last paid a debt, your creditor can no longer sue you, and legally you may not have to pay the debt.

This image explains the Statute of Limitations on Delinquent Debt in California, by Debt Relief Company - Golden Financial Services

The clock starts ticking after you become delinquent on your payments. From 30-days after you stopped making your monthly payments on a credit card or personal loan, your creditor only has up to four years to sue you over the debt.

However, if you make any payments during those four years to the collection agency, this could re-age the expiration date of the statute of limitations. If it’s been a few years since you last paid a debt, consider debt validation before paying the debt collection company. Debt validation will dispute the validity of the debt to make sure the debt collection company has the legal authority to collect on t

California Debt Relief & Settlement Laws

A new debt relief law in California called the Debt Settlement Consumer Act (Senate Bill 708) –could limit how much debt settlement companies charge. If you have $100,000 in credit card bills and a credit card settlement company reduces these bills to $50,000, that means $50,000 of the $100,000 of debt gets forgiven – wiped away clean! The new law would prevent the settlement company from charging more than 15% of the amount forgiven, so if a settlement company saves you $50,000 – they cannot charge you more than $7,500.


Best California debt relief, settlement and consolidation programs

Debt Relief Programs in California

Struggling to pay your minimum payments? Have debt collection accounts? Need help with your debt?

What is the best California debt relief program?

Debt settlement, credit card consolidation, consumer credit counseling, student loan consolidation, and validation are viable options depending on each person’s specific needs and goals.

We make debt relief simple for you!

  • Start with a free consultation to learn your options, comparing the pros and cons of each.
  • Pick an affordable monthly payment
  • Start on the path to getting out of debt

To start, CALL (866)-376-9846!

Find a Debt Relief Office Near You

If you are looking to schedule a Face to Face appointment, you can sit with an IAPDA Certified Debt Relief Specialist — CALL 866-376-9846 NOW.

Get help from one of our experienced enrollment specialists in the state of California. Debt relief appointments need to be scheduled to ensure an IAPDA certified representative will assist you without any interruptions.

Call Now To Schedule Your In-Office Appointment at 866-376-9846.

California debt settlement example:

California debt settlement program negotiates a credit card bill down from $4,216.14 –– $1,475.75. (results vary, and this is before debt negotiation company fees get added in)

debt settlement california (example letter)

Consumers in California can choose from multiple programs to help them get rid of all their debt.

In some cases, consumers may need more than one program to address all of their bills. For example, you may need a consumer credit counseling program to consolidate your credit cards and settlement program for your third-party collection accounts.

Federal Student Loan Consolidation, California:

Golden Financial Services can provide you step-by-step instructions on consolidating your federal student loans into an income-driven repayment plan, where your new monthly payment would be close to zero dollars per month. Every year, you would recertify your income-driven plan to keep the lowest monthly payment and ensure you keep track of when you’re eligible for loan forgiveness.

If you work in a public service job like teachers and police officers, you could be eligible for loan forgiveness in as quickly as ten years. Here is the step-by-step guide on consolidating federal student loans, reducing your monthly payment, and getting loan forgiveness. 

All of your existing loans will get paid in full with student loan consolidation, leaving you with one consolidated loan to pay back. Keep in mind; these are government student loan consolidation programs that you can do on your own, and you don’t need to hire any California debt relief company to assist you with this option.

Example of a student loan consolidation case, where the consumer was approved for a zero-dollar payment

See California student loan relief & consolidation success case example -- client gets approved for a zero dollar payment after consolidating loans! The government makes these low payments available for consumers who are experiencing financial hardship.


Alaska debt relief

California Credit Card Debt Settlement & Validation

Accounts get proven to be “legally uncollectible” in many cases because creditors can’t provide complete and accurate records that they are legally required to maintain.

A legally uncollectible debt does not have to get paid and subsequently cannot legally be reported on your credit report.

A California debt relief client used validation services to walk away from paying a Barclays Bank Credit Card (example case)

ERC- Barclays Bank Credit Card Debt Gets Proven Invalid With Debt Validation

 Debt Settlement – California

California debt settlement programs can be used as a second alternative to dealing with credit cards if the consumer is current on their payments but on the urge of falling behind or if the validation doesn’t solve the problem.

For a settlement program to work, the account needs to be with a third-party debt collection company. Collection companies buy the debt for less than 50% of what it was initially worth in many cases, which is why they’re willing to settle for such a reduced amount.

Does debt settlement California programs hurt credit scores?

To save a person, the maximum amount negotiators wait until the original creditor writes off the debt before offering a settlement. After creditors write off the debt, they can then get reimbursed the money owed through tax credits. Consequently, creditors will sell delinquent credit accounts to third-party collection agencies for much less than the full balance owed. After the collection agency takes over handling the account, negotiators can get the best savings on a settlement.

Late marks and a collection account get inflicted on the consumer’s credit report while on a settlement program, hurting their credit scores. Accounts can get settled before they turn into a collection account, but the savings won’t be as good.

Before using a settlement program, consider debt validation to dispute the account’s validity and force the collection agency to prove they are legally authorized to be collecting on the account. After an account is invalidated, it can no longer legally remain on credit reports. Validation services can save a person more money in the end when compared to a settlement plan.

Downsides of Settlement Programs Include

  • Credit card companies are not required to settle at a certain amount, but most of the time will settle. No settlement company can guarantee any type of specific savings. Reputable settlement companies will quote clients conservatively based on past results. So, for example, if, on average last year, settlements were anywhere from 40%-55% of the balance, the program will quote you at 60%. We want to see clients save more money in the end than what we originally quoted them because that makes happy clients!
  • You could also owe taxes on the amount that gets forgiven on a settlement as the IRS sees the “savings” as “income.”
  • Although it’s rare, creditors also have the right to sue a person over an unpaid credit card.
  • Not all clients will finish the program successfully. Some clients can’t afford to make all of their monthly payments and are forced to cancel the program.

Does validation also have all of the downsides that come with settling debt?

A validation program does not come with all of the same downsides as a settlement program. Here are a few differences:

  1. For starters, if an account is invalidated and you don’t have to pay it, there are no potential tax consequences.
  2. If an account is invalidated, it can’t legally remain on credit reports. With a settlement program, late and collection accounts can stay on credit reports for up to seven years.
  3. With validation, all of the accounts are disputed immediately after they are sent to collection. Still, with a settlement program, only one account at a time is negotiated on and dealt with. Consequently, some accounts will sit untouched for over a year with a settlement program.

Credit scores are negatively affected over the first year of the program with validation as accounts must age and get sent to third-party collection status before they can get disputed. Consequently, there is a chance that creditors can issue a summons to go to court, like with a settlement program.

Consumer Credit Counseling – California

Consumer Credit Counseling Programs are designed to lower a person’s interest rates and consolidate all credit card payments into one.

Accounts are easier to manage when only having to deal with one monthly payment.

With consumer credit counseling, you can become debt-free in 4.5 – 5 years (average).

A consumer credit counseling company will often tell consumers that there won’t be any adverse effect on their credit program. Still, the truth is there’s always a negative effect on credit when using any debt relief. California consumer credit counseling programs will result in credit cards getting closed out at the end of the plan. Consequently, credit scores go down towards the end of the program.

Do California consumer credit counseling programs lower credit scores?

Consumer credit counseling does put a consumer credit counseling third-party notation on a person’s credit report. Some creditors look down upon this mark because it appears that “you couldn’t manage your bills on your own.”

Additionally, there is a negative effect on credit scores at the end of a consumer credit counseling program due to credit cards getting closed out at the end of the program.

Can credit scores improve with credit counseling plans?

At the beginning of a credit counseling plan, credit scores may improve due to late payments getting re-aged to show current, and overtime balances will go down, improving scores.

How much can you save with California credit counseling?

A person’s monthly payment on a credit counseling program is usually around the same as what it would be when paying “minimum payments” on their own. However, you can save money on interest, as credit counseling plans lower credit card interest rates.

Learn more about credit card consolidation here.


Bankruptcy Debt Relief California:

California Bankruptcy Debt Relief Options have the worst negative effect on credit. With chapter 7 bankruptcy, consumers can walk away from all of their debt, including secured debt, where they end up paying nothing aside from attorney fees.

With Chapter 13 bankruptcy, consumers end up paying back their debt, but over about five years on average, and their payment is based on what the judge determines they can afford. Bankruptcy should always be considered a person’s last option. Read more about debt settlement vs. bankruptcy.

California Debt Relief Disclosures and Scams – What you need to know

California’s debt scams prey on consumers who are struggling with their finances. Some debt settlement companies in California will try to charge consumers up-front fees before settling their debt; this action is illegal. A company can only charge a fee for debt settlement in California after an account is settled and at least one payment has been made on the settlement.

The average fee for debt settlement is 15%-25% of the total amount enrolled in the program, so any company trying to charge you more than that is overcharging you. Some companies will also charge 15% of what they save you; this is also OK as long as it’s only charged after the account is settled and paid off, not one day sooner.

With debt negotiation & settlement programs in California, consumers are set up with an FDIC insured savings account. Your payments go into this account and accumulate until enough is available to settle and pay off one of your bills for around half of what is owed (not including the settlement fee for the company). Any company trying to draft from your bank account and direct the funds into their own “company account” is a red flag and could be a scam, unless, of course, it’s a consumer credit counseling program. With credit counseling, you pay the credit counseling company, and they will then disburse the funds to your creditors but at a lower interest rate.

Reputable debt relief companies in California will be transparent and forthright with you about each program’s downsides, as all programs include pros and cons. If you run into a company that doesn’t disclose the downsides with you upfront before asking you for bank information, that right there is a big red flag.

What is the game plan if you receive a summons?

You need to understand what the game plan is if one of your creditors decides to sue. You need to know how the program will affect your credit score and the plan to rebuild it. You need to know what plan B will be if Plan A doesn’t work. For example, what if an account is proven to be valid with a validation program? What’s Plan B?

The debt validation program recommended by GFS comes with a money-back guarantee. If a creditor issues a person a summons to go to court, the client is fully refunded on that account. The client is then referred to a law firm that settles the debt for a much smaller amount than the total owed.

Some salespeople work for debt relief companies in California that are paid a commission for every sale they make. Some of these salespeople don’t operate most ethically and are not being monitored by company compliance teams. Consequently, they may lie to people on the phone to make a sale and fail to disclose the negatives. People get scammed this way every day in California, signing up for the wrong program they don’t need!

Check California debt relief reviews.

Here are a few words of advice for you to consider before hiring a company to help you with debt relief. California Better Business Bureau provides reviews about each company. Check the BBB reviews and make sure they are mainly positive reviews that go back many years. Also, check reviews on Google.

And we don’t charge you extra to enroll in a program through us; the debt relief companies pay us we work with. Consequently, consumers can get free assistance from GFS and can enroll in whatever program they choose. You get an unbiased consultation, free education, and debt assistance from an IAPDA certified company.

More Helpful Resources:

Here is a recent Bankruptcy Debt Relief Infographic that teaches people about the different types of bankruptcy. Teach your children about money and raise them to be financially savvy. (This is a must-read for anyone with children, grandchildren, nephews, or even friends with kids.) If you live in San Diego, then visit our San Diego California Debt Relief Page next. Hours of Operation: Monday – Saturday 8 am – 8 pm Address:



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