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Debt Consolidation Loans in California
California is known for being a state of extremes. It’s home to some of the nation’s richest residents as well as some of the nation’s poorest. What this means for those who live here is exceptional wealth mixed with exceptional poverty. Those with exceptional wealth don’t see those without. The neighborhoods and areas are kept very far apart and separated by much more than just the income and diversity California is famous for. The wealth and poverty in this state is substantial, and the debt is insurmountable. There are millions of families living in California who cannot make ends meet each month due to their substantial debt. There are very few options for those with this much debt, and there’s much to learn about the socioeconomics of the state as a whole.
Poverty and Wealth in California
There are approximately 38 million people calling California home. Of those 38 million people, 8.9 million live well below the poverty line. That’s 24% of residents. That’s ¼ of the people in the state living without even the most basic ability to afford their lifestyle. For example, Central Valley and Silicon Valley are within just a few hours driving distance from one another. The people who live in Silicon Valley earn an average of $55,000 per year and more than 60% of the people who live here have a college degree. In Central Valley, the average income is only $20,000 per year with only 8% of the population carrying a college degree. The disparity is obvious, and it does affect the area.
Debt Relief for California Residents
Living with debt is discouraging, but it happens. Many people in California fell into the trap of living on credit when the economy crashed, and they find it difficult to get out of that slump. Others find it impossible to make ends meet with such a low income level, and they end up in debt more than they can afford to pay back. When this occurs, people have no options. They cannot apply for a loan to consolidate their debts into one payment with one low interest rate to save hundreds or thousands of dollars every month or year on their minimum payments.
These people are stuck in a rut, and debt relief is the only option for them. It’s not the best source of debt relief for everyone, but anyone who cannot make their payments, has already missed payments, and who cannot afford to apply for a consolidation loan with their bank will find this option helpful. Debt relief consolidation means working with a company that negotiates your debts. They call your creditors. They offer them a settlement amount as much as 40% lower than the amount you owe. If the creditor accepts, you then begin making payments to the debt consolidation company, and they issue payments to your creditors over the course of a few years until your debts are paid in full.
It’s not for everyone, but it’s helpful for many. If you’ve missed debt payments you cannot afford, it’s for you. This kind of settlement relief only works if you have missed payments. If you continue to make your payments every month on time, your creditors are less likely to negotiate a lower payoff amount with your debt relief company. It’s bad for your credit score, but it’s good for your finances.
The benefits include saving money on interest by combining all your debt into one low payment. You cannot rack up more debt using this method, and you don’t increase the amount of debt you have with another loan. You get to pay off your debt faster, cheaper, and for far less than you owe to your creditors. It’s less harmful for your credit score than continuously making late or missing payments as well.
Debt Relief Laws in California
Getting to know the law in California is advisable for anyone who is considering debt consolidation as a form of debt relief. There are laws and limitations, and California law stipulates no debt collection company can charge you more than 10% interest on a debt. The law also states 75% of your wages are protected from debt collectors.
If your debts are oral, the statute of limitations is two years. This means a debt collector can no longer pursue legal means to collect a debt following that amount of time. If your debts are open accounts, promissory notes, or written contracts, the statute of limitations is 4 years. This doesn’t mean your bad debts are removed from your credit report after this amount of time. This still takes seven years, but it’s helpful to know which laws are protecting you from which debts in the meantime.
Debt relief consolidation is not for everyone, but it’s helpful to those with poor credit, low income, and no help with their debt. It can save you money, help you get out of debt, and it can help you repair your credit over time.