California Debt Settlement Laws

An alarming number of families in the U.S

An alarming number of families in the U.S. are struggling with job layoffs, unable to find work or pay for their basic necessities. As food and shelter take precedence and debts are left unpaid, many find themselves facing the possibility of bankruptcy. Fortunately, Californians have the option of debt settlement as an alternative to bankruptcy.

Debt settlement is a negotiation of the amount a person owes on an unsecured debt. An offer of paying less money than is owed on the debt is made to the creditor by the debtor or a representative acting on behalf of the debtor. If the offer is accepted by a creditor or debt collector, payment of the negotiated amount will be considered a payment of the debt in full. This means that a debtor can settle their debt for much less than they owe without having to resort to declaring bankruptcy.

It is important to note that the fact that a debt has been settled may be noted on a credit report, and that this information could negatively affect the debtor's credit score though a bankruptcy could lower your score even more depending upon the circumstances involved.

The debtor or an attorney representing the debtor must be sure that a creditor verifies the acceptance of a settlement offer. If the creditor does not officially verify a settlement acceptance, it is possible that the creditor will deny acceptance in the future and attempt to collect the amount owed in full.

Debtors in California should be aware that creditors are required to stop all communication if a Cease and Desist letter is sent. Although this letter does not mean the debt has been erased, it does give debtors some peace while they work with a debt settlement attorney to negotiate down their debt by creating a plan. While some states only allow debtors to send a Cease and Desist letter to collection agencies, California law allows debtors to also send a letter to their original creditor.

People that are struggling with debt and are married should talk to an attorney about negotiating all debts that have been accumulated both separately and as a married couple. California law allows creditors to attempt collection from a spouse if a debt was acquired during the marriage, so it is important that both spouses take care of all debts.

If you are one of the many struggling with unpaid debts, it is best to contact a debt settlement attorney to discuss your options. Debt settlement is a difficult process to navigate alone, and is often accomplished with fewer objections if an experienced debt settlement attorney is handling the debt negotiation and settlement process. Attorneys specializing in this area know how to negotiate with creditors and help debtors ease their financial burden.

One final note about settling debts in California is that debtors should be wary when looking for assistance. There are many fraudulent companies out there claiming to specialize in debt negotiation. Only an experienced attorney licensed to practice law in the state of California should be contacted to help you with debt relief in California.

by: Alvin Clark

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