California Debt Relief: What to Know

In a Nutshell

Debt relief is the method by which those in debt escape their debts. You can accrue debt from student loans, personal loans, medical incidents, credit card debts, and other means. If you’re ready to become debt-free, there are many options for debt relief in California. This article is going to explain the ins-and-outs of California debt relief, including average California resident debt statistics, resources, and more.

What is the Economic Climate of California?

For those of us who are in debt, it can be difficult to figure out what to do, to get out of a dire situation. However, no matter what your circumstances are, there are ways to better it. So, if you’re a California resident with debt, then you’ve come to the right place, because debt relief is possible, for Californians—whether you live in San Diego or Los Angeles.

Many California residents don’t have enough money in their savings account or checking account, to cover their debt. The cost of living is too high, and with things like medical bills, the burden of payday loans, and student loan debt, Californians are struggling. This means, that there is little money to spare, for California residents living paycheck to paycheck.

How Does Debt Relief Work in California?

There is a debt relief option in California. In fact, you can perform a debt settlement, which will allow you to pay less than what you owe on your debts. In this instance, you can save your money for two to three years, and after you do, you will come to a consensus with your creditors, in order to pay off the debts for less than what is owed.

Unfortunately, this is going to take some points off your credit score, but if you do it, you’ll be able to get rid of debt without paying the lump sum that you’re currently struggling to pay. When you’re patient, this method can be productive. And working with a debt settlement company can help you achieve financial freedom.

As you try to become debt free, TurboDebt can help.

What Kinds of Debt Do California Residents Have?

Average consumer debt

In California, the average amount of consumer debt is $137,301. And debt settlement companies work to reduce the amount of debt that a person has.

Credit card debt

In California, the amount of credit card debt that residents owe to credit card companies, is sitting at around one hundred sixteen billion. That is more than the national average, and currently, the entire United States has one trillion in credit card debt.

California credit card debt makes up eleven and a half percent of the national credit card debt. Credit card debt looks bad on a credit report, so you want to reduce it as soon as possible. To maintain a good credit score, you want to have between a 670 and a 739, and with credit card debt, you can fall far below this figure.

Auto loan debt

Auto loan debt in California sits above the current national average and keeps rising. As of 2022, Californians owed an average auto loan debt of $21,027, up from $19,550 in 2021.

High auto loan monthly payments are largely due to the fact that people with lower credit are being offered bad auto loans, which will result in higher amounts due to the bank. When you can’t make the minimum payment, you go further into debt.

Mortgage debt

The average home value in California is $718,687, nearly doubling over the past decade. This number considers the state average, and averages vary from locality to locality. California homeowners top the list in the highest amount of mortgage debt in the nation at $401,954 in the last quarter of 2021.

Student loan debt

It is all too common that students are leaving college with a lot of debt. Specifically, California students carry an average of $37,042 dollars in federal student loan debt. This is slightly above the national average of $35,287.

Household debt

The average amount of household debt for residents of California is currently $143,909, one of the highest in the nation.

Bankruptcy

In 2021, California had the most bankruptcy filings in the entire country. Specifically, because the average total debt in California is high, there were 30,973 bankruptcy filings in the state in 2022. If debt negotiation doesn’t work, bankruptcy is an option some individuals choose for a fresh financial start.

Average income and employment

In 2021, the median household income in California was $84,097. In terms of per capita, or individual income, the average is $41,276. As of February 2023, the unemployment rate in California was 4.3%.

Credit scores

In California, the average credit score is sitting at 721, slightly above the national average credit score of 714. This number remained unchanged for 2021 and 2022, showing a strong credit rating, even among rising credit card debt.

Identity theft

Californians reported 125,597 incidents of identity theft in 2022, ranking 14th in the nation. Many of these incidents are the result of cybercrime, where online thieves steal medical identities and tax information, costing citizens damage to their credit and even monetary losses.

Banking and tax info

Currently, the statewide tax rate in California starts at 7.25%. This will vary depending on your city and county, because local rates are added into the statewide tax.

How Has TurboDebt Helped?

TurboDebt has helped 10,097 clients, and TurboDebt has enrolled 3,184 clients into our debt relief program. The total debt enrolled in this debt settlement program is $72,871,921, and the average debt per enrolled client is $22,815. California residents should know that TurboDebt can help.

Top Kinds of Debt that Californians Need Relief From

Credit Card Debt

It can be difficult to escape credit card debt. No matter what you needed to purchase on your credit card, it might feel like you’ll never escape the never-ending cycle of credit card monthly payments and interest. It is incredibly common that people in California have credit card debt, and TurboDebt can provide residents with relief.

Divorce Debt

Marriages are already known for being incredibly complicated, but when money is a problem, things can take a turn for the worse, fast. If you’re in the midst of a divorce, TurboDebt can help you bounce back from a divorce that affected you financially. In fact, the average divorce costs around $17,500 for people in California, so if you’re affected by your divorce, there is hope with the help of TurboDebt.

Business Debt

If you pursued a business endeavor and you experienced financial troubles because of it, you can still redeem yourself, with the help of TurboDebt. On average, it costs Americans between $30,00 and $40,000 to start a business. So, if you are someone who had to sacrifice a lot of money to get your business afloat, the experts at TurboDebt can put you on the path to financial wellness.

Medical Debt

Unfortunately, it costs a lot to be ill in America, and because of that reality, many people in California are experiencing debilitating medical debt. In California, the average citizen has medical debt, and this is not unique to the state. In the U.S., the average amount of medical debt individuals carry is $2,424. If you’re one of those people, you’re not alone. TurboDebt can help you get out of the medical debt that is inhibiting your financial future.

Homeowner Debt

It can be beneficial to purchase your own home, but if you get into homeowner debt that you can’t escape, it can be detrimental to purchase a home, too. So, if you have homeowner debt, TurboDebt can help you figure out a way to reduce it.

Retirement Debt

When it comes time for retirement, you might find that you have too much debt. According to a survey, it is best if you only spend around 28% of your income on your debt. So, if your monthly income is going to your debt, and you spend more than 28% of it on paying your debt, TurboDebt can help you find a way to reduce the amount of debt that you have in retirement.

How to Relieve Your Debt

Debt management programs

There are many different ways to relieve your debt, and one of them is using a debt management plan. With a debt management program, you’re going to be able to reduce your credit card debt without having to resort to taking out a loan. You’re going to find ways to make payments that you can afford, so that your once daunting debt becomes more manageable.

Debt consolidation loans

You might find that it is helpful to find debt consolidation programs to help. With debt consolidation loans, you’ll be offered a certain amount of money, which will be loaned to you to pay off your debts. When you have a debt consolidation loan, you’ll be able to get rid of debt that is currently at high-interest rates, in order to have more manageable debt. In theory, you’ll still be in debt, but the debt will be easier to pay off, after receiving a debt consolidation loan. You want lower interest rates, if you want to pay off your debt.

Debt settlement

Debt settlement is a means by which you can have a more manageable amount of debt to pay off, and after you pay off this more manageable sum, you’ll be absolved for your debts. Let’s say that you have a loan that is around $5000 that you need to pay back. You might use a debt settlement company who can help work with creditors to reduce your total debt owed. For example, through debt settlement you may be able to save up to 50% of the total amount owed, which means you’d only have to pay about $2,500 instead of the full $5000.

Credit counseling

Everyone has unique problems, when it comes down to it. Everyone’s finances are different, and it’s hard to receive advice that can help you escape debt, from someone who isn’t familiar with your situation. When you seek out a credit counseling agency, you’ll be working with a credit counselor one on one, in order to better manage your debt. You’ll learn skills like budgeting, information about credit scores, and debt management information, in order to put you on a better path towards financial success.

Bankruptcy

If you are in a situation where you can’t escape your financial situation, then you could file for bankruptcy. When you file for bankruptcy, you are liquidating your assets, or you are creating a plan to follow, which will help you to achieve the repayment of your debts. There are different kinds of bankruptcies that you can file for, depending on your situation, but usually, bankruptcy is a last resort.

Debt forgiveness

Sometimes, you can achieve debt forgiveness, even if you don’t pay upfront or have unsecured debt. This is when your credit lender will reduce the amount of money that is owed. If you have student loans or medical debt, it is not uncommon for the lender to forgive some of your debts, but other debts can be forgiven, too.

How to Get Help in California: Debt and Financial Hardship Resources

Temporary assistance programs

Many people need help, because of the pandemic and other reasons. There are several temporary assistance programs and nonprofits in California. For one, you could seek out help from California CalWORKs, which works to give assistance to families in California. For families who don’t have housing, food, and other basic needs, CalWORKs will help.

Moreover, California has a WIC program, which is useful for people who cannot afford food. WIC helps women, infants, and children in need.

State health and human services

If you need medical help, California has resources that can help improve your situation. For example, the California Healthy Families program, will provide children with lower cost insurance. This is important, because not all kids in need are covered by California Medicaid.

Childcare

CalWORKs provides childcare for families who cannot afford daycare. So, if you have children that are not school aged, then CalWORKs might be able to help you get childcare opportunities.

Shelters for the homeless

There are many homeless shelters in California. For example, there is the Los Angeles Mission homeless shelter, the Union Rescue Mission shelter, the MSC Homeless Shelter, and more.

Free transportation services

In order to get to work or to interview for work, it is important that you have access to proper transportation. In California, there are a few options for transportation services. For example, you might use the Lifeline Transportation Program, which provides low-income people with affordable transportation.

Start Your Debt-Free Future with TurboDebt

Don’t fall for debt relief scams. Instead, choose TurboDebt. With the help of TurboDebt, you’re on your way to starting a future that is debt-free. You don’t have to continue living a life that is plagued by inescapable debt, when you ask TurboDebt to help.

Remember, it’s important to be diligent, when you’re trying to get out of debt. Do not ever fall for debt relief scams, as that could put you in a worse position than you’re already in. You can trust that TurboDebt is reliable and trustworthy, so if you’re ready to be debt-free, reach out to TurboDebt, today. You’ll find debt solutions in no time.