Los Angeles Debt Relief
14 MIN READ
Published October 26, 2023 | Updated October 26, 2023
- Los Angeles residents face some of the highest mortgage debt in the country, with average home prices reaching above $700,000.
- L.A. employs more individuals in education and healthcare than any other industries.
- Residents in the City of Angels carry a “good” average credit score just below 700.
- Because living expenses for food and other necessities are higher in L.A. than the average city in the U.S., more residents need help through debt relief services.
- In 2022 alone, TurboDebt helped hundreds of L.A. residents overcome an average debt of $21,767.
Debt Landscape in Los Angeles
A sprawling metropolis situated between the Pacific coast and the rolling mountains of California, Los Angeles is a city like no other. Home to famous sites like the Hollywood Sign, TCL Chinese Theater, and Griffith Park Observatory, L.A. has drawn visitors and residents alike as a hub of arts and culture.
Although the L.A. metro area is known as the land of movie stars, more residents find employment in education and health services than in any other industry. While most consumer debt figures are close to the national average, housing costs are sky-high in the City of Angels.
In July of 2023, the average sale price for a single-family home in L.A., down 13.4% from the previous year, still sold for $792,500.
For many L.A. residents, the glitz and glamor of Hollywood doesn’t extend to making a living. Since 2018, the number of citizens receiving SNAP benefits continues to rise, as almost 17% of L.A. residents now live at or below the poverty level.
With the cost of living higher in L.A. than most other U.S. cities, debt relief is essential for many consumers. Average annual costs for food and transportation are both $2,000 higher than the rest of the country, on top of staggering costs for housing.
Brad Reichert, debt expert and Founder and Managing Director of Reichert Asset Management LLC, points out another financial situation unique to the L.A. area. “Southern California often serves as the initial arrival site for tens of thousands of people who immigrate to the U.S. each year. It’s important for these communities of people from all over the world to seek out financial advice and debt relief services offered in their first language, in addition to English,” Reichert explains.
“Fortunately, Los Angeles has many vibrant, growing areas of the city where debt settlement and debt management services are offered by these types of businesses in several different languages,” Reichert adds. “By learning about these programs and services in their native language, a debt relief client might be better able to understand what kind of assistance is truly available, and as a result, they can choose the solution most suited to their particular situation.”
Read on to learn more about debt relief programs in Los Angeles and get a better picture of the city’s financial outlook.
TurboDebt Helps Los Angeles Residents Get Out of Debt
TurboDebt provides debt relief in Los Angeles, helping hundreds of residents overcome their financial burdens. In 2022 alone, we enrolled a total debt of $5,093,511, with an average client debt of about $22,000.
Our services extend to the entire state, with more people finding California debt relief through TurboDebt in the Golden State than in many of the other areas we serve.
Signs You May Need Debt Relief in Los Angeles
Excessive debt from loans or credit cards can become a difficult financial burden. But how do you know when it’s time to get debt relief help? Clients from L.A. and other areas we serve often come to us with the following signs that prove it’s a good idea to seek assistance:
- Carrying high balances on multiple credit cards
- Lacking an emergency fund with at least three months of expenses
- Taking out high-interest payday loans to cover bills
- Owing $10,000 or more in unsecured debt
- Paying only the minimum on credit cards each month
Another sure sign you could benefit from an L.A. debt relief program is your debt-to-income ratio (DTI). This figure is represented as a percentage showing how much more you owe compared to what you take in. The lower your DTI ratio, the better.
Use TurboDebt’s DTI resource hub to calculate your ratio and learn more about what it means to your financial situation. Once you know your DTI, you can start to budget using the 50/30/20 method, spending 50% of what you earn on your needs, 30% on wants, and 20% on debt repayments and savings.
Best Ways to Get Debt Relief in Los Angeles
If you’re tired of hearing from debt collectors or just want to make sure you have extra in savings each month, consider the following options for debt relief programs in L.A.:
Debt settlement programs in Los Angeles involve working with creditors to lower the total amount you owe. A professional debt settlement organization negotiates on your behalf, asking lenders to reduce your total debt, often by up to 50%, before including the organization’s fees in your final debt settlement amount. You pay into a savings account until that fund is large enough to settle with your creditors.
While you can negotiate with creditors on your own, leveraging the expertise of professionals can help you secure a debt reduction, ending your payments quicker and saving you money.
This debt relief option provides financial education and connects you with a certified credit counselor. Credit counselors can explain your credit report, help you understand what’s causing you to fall into debt, and offer guidance about budgeting and saving.
Many credit counseling agencies function as a nonprofit and offer free or low-cost services to low-income individuals. These debt relief programs help you prioritize debt payments and get your finances back on track.
Debt Management Programs
Enrolling in a debt management program allows you to organize your debts into a single monthly payment made through a credit counseling organization. Credit counselors help you manage your debt payments and can negotiate with lenders to eliminate fees and lower interest rates.
When you enroll in an L.A. debt management program, you’ll come up with a debt management plan. This plan allows you to make a single payment each month through the organization, which then distributes your funds to creditors. This can help you stay on track and make timely payments, building your credit score as you pay down debt.
Debt Consolidation Loans
A debt consolidation loan allows you to pay off all your smaller outstanding accounts at once, and often at a lower interest rate, leaving you with a more manageable single payment each month. First, you’ll need to secure a loan big enough to cover your current debts. Consolidation loans work best for debt relief if you carry a “fair” to “good” credit score, as you’re more likely to get a loan at a lower interest rate than the ones on your current debts.
Once you pay off your debts, you only have to make one payment each month toward the balance of the loan, effectively reorganizing and simplifying your financial burden.
Although debt forgiveness programs in Los Angeles are rare, you may qualify to have some or all of your debt erased. Typically offered through government agencies, your job history and income are some of the main factors that qualify you for debt forgiveness.
For example, if you’ve worked in some form of public service, such as teaching in the public school system, you may receive aid from areas like the Public Service Loan Forgiveness program.
Low-income individuals and families can apply for mortgage debt forgiveness programs through the Department of Housing and Urban Development.
Filing for bankruptcy is typically the last option for debt relief. Since the process takes time, involves court costs, and dings your credit for up to 10 years, it’s best to save this solution as a last resort. However, if you have no reasonable way to pay off large amounts of debt, declaring bankruptcy may help you reduce and eliminate your outstanding balances.
Individuals usually file either Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, the court looks at your finances and determines how much you can afford to pay, selling your assets and ending any debt beyond the amount your assets cover. In Chapter 13 bankruptcy, a judge creates a repayment plan instead of selling most assets as long as you have the means to pay back lenders.
Before you make any decisions about filing for bankruptcy, it’s a good idea to speak with a law firm and an experienced bankruptcy attorney to learn more about your options.
Top Types of Debt To Get Relief From in Los Angeles
We see Los Angeles residents struggle the most with the following types of debt:
Credit Card Debt
Americans are facing new highs in credit card debt across the country as the national average climbed above $1 trillion in Quarter 2 of 2023. Charging anything from essential items to vacations comes with a cost if you can’t pay in full each month. Credit card interest rates are soaring above 20%, adding hundreds of dollars in fees for L.A. residents struggling to afford even basic purchases made on credit.
Don’t get stuck in a cycle of mounting fees and credit card debt. At TurboDebt, we offer debt settlement services in Los Angeles to help you regain your financial freedom.
Divorce is a costly event, and we see it leave many L.A. residents deeply in debt. After court costs, you’re often left with debts from joint accounts such as mortgages or auto loans. Even if the court splits these debts, collectors may still contact you for repayment if your former spouse defaults on their portion of the loan.
TurboDebt is here to help you regain your financial footing after a divorce. Our experts can assist you in planning for a secure financial future and eliminating debt after a divorce.
Starting a business in L.A. can be costly due to high labor costs, high state and local income taxes, required permits, and other government-imposed fees. These factors often put owners in more debt than they had ever planned for when initiating a business of their own.
Thankfully, Los Angeles’ Economic Workforce Development department offers Business Source, a hub for entrepreneurs offering financing assistance, workshops, and economic incentives. However, this kind of support may not be enough to offset the expense of starting and growing a business, especially in the first 2-3 years.
Many small business owners take out personal loans to initiate company growth or even sustain it through hard times like the COVID-19 pandemic. If you’re struggling with debt as an L.A. business owner, contact TurboDebt to find the right debt relief solution.
Whether you undergo a routine medical procedure or are faced with an emergency, healthcare costs quickly add up. Even with insurance, medical bills often come with short due dates and require large sums all at once. Carrying medical debt in L.A. is even harder for the 12% of residents without health insurance.
TurboDebt offers debt settlement options to aid you in paying off large amounts of medical debt. Together, we can make a plan to overcome your healthcare debts.
Out of the top 100 cities cited, L.A. residents carried the 5th highest mortgage debt in the country, according to studies by Credit Karma. While mortgages are the top contributor to consumer debt, owning a home can lead to other payments that make homeowners indebted. Insurance might not cover all the costs associated with repairing damages caused by a natural disaster or accident.
If you’re dealing with debt as a homebuyer, contact the experts at TurboDebt today for a free consultation about your debt relief needs.
California has the highest number of adults aged 65 and over in the U.S., and we see many L.A. retirees living on a fixed income facing unexpected costs that can lead to debt.
If your 401(k) isn’t enough, and you’re taking on debt instead of enjoying your retirement, let TurboDebt help you find the right debt relief option.
Los Angeles Debt and Finance Statistics
Read below for a closer look at L.A.’s financial health:
Combining the averages owed from credit cards, auto and student loans, and mortgages makes up what’s known as consumer debt. With some of the highest mortgage bills in the nation, L.A. residents carry a heavy financial load.
Here’s a look at how consumer debt breaks down in L.A. (with sources below):
- Credit Card Debt: $2,710
- Auto Loan Debt: $14,520
- Mortgage Debt: $544,641
- Student Loan Debt: $19,293
Bankruptcy figures also indicate the debt a city faces. In Los Angeles, bankruptcy filings were up 31% from the previous year as of September 2023. Most consumers filed for Chapter 7 bankruptcy, with over 500 individuals filing within the first nine months of the year.
Average Income and Employment
Los Angeles faces unemployment rates nearly double the rest of the country. In September of 2023, L.A.’s unemployment was a staggering 6.2%.
Top industries that attract employees include education and health services, along with trade, transportation, and utilities. Los Angeles employees earn an average of $1,564 per week, about $100 more than the U.S. average.
Los Angeles fares relatively well in credit responsibility, with an average credit score of 690. This likely puts residents in the “good’ category, making it easier to access loans at lower interest rates. A high credit score can help residents looking for L.A. debt relief programs like debt consolidation.
Let TurboDebt Help You Find a Debt Relief Program in LA Today
Debt doesn’t have to ruin your financial future. If you’re struggling with high amounts of consumer debt in Los Angeles, partner with the experts at TurboDebt to explore our customized debt solutions. It only takes a few minutes to get started with a free consultation!