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Perhaps most famous for being the home of Disneyland, Anaheim, California is about as close as you can get to climatic perfection in the United States. With over 250 days per year of sunshine, the beautiful whether has attracted residents and business from all over the country.

As part of the Los Angeles metro area, Anaheim enjoys one of the most thriving economies in the country. The city itself derives much of its income from tourism. The Walt Disney Company is the largest employer, and its Disney Land theme park is one of the state’s largest and most famous tourist attractions. Anaheim also does a booming convention business, with many high-end hotels, restaurants and other service businesses enjoying a steady flow of travelers coming in and out of the town, all year round.

However, despite all these thriving industries, the city faces many of the problems typical of the Los Angeles Basin. These include huge disparities between the rich and poor, widespread unemployment and minority groups that have largely been left in the wake of the booming economy. Anaheim features a particularly large Hispanic population, many of whom are undocumented immigrants. This vulnerable demographic often operates outside of the official economy and maintains a much lower standard of living than many of its full-citizenship counterparts. Overall the city has an unemployment rate of just 5.2 percent, roughly on par with that of California as a whole. But its unofficial unemployment rate is certainly higher.

As was the case elsewhere in the Los Angeles area, Anaheim was hit hard by the housing market crash and subsequent economic turmoil. A large percentage of its inhabitants lost a significant portion of their net worth in the debacle and have not recovered.

This has left many in financial distress. California routinely tops the charts in number of bankruptcies, led by the Los Angeles metro area. But despite California’s fairly lax bankruptcy laws, Chapter 7 may not be the best solution for Anaheim residents facing unmanageable debt. Debt settlement could be a helpful option for those who want to avoid the long-lasting, negative consequences of filing for bankruptcy.

Which Anaheim residents could benefit from debt settlement?

Broadly speaking, the types of people who can benefit from debt settlement are those with unsecured consumer debt who have a steady annual income of at least a third of the debt amount and have identified and corrected the underlying problems that led to the debt run-up in the first place.

One of the main criticisms of debt settlement among financial experts is that it fails to address the underlying causes that led to the debt accumulation. This is why it’s only recommended to pursue debt settlement if wild spending and other bad habits have been eliminated. Without changing habits, the debt will just accumulate once again.

But identifying and correcting the underlying spending habits is probably the least important concern. Without sufficient income relative to the principal, there is no chance that even a settlement that involves a large reduction in the amount owed will help the debtor. Generally, finance experts recommend that the debt can be paid off in full within three years, with five years being an absolute maximum. This is because the costs of proceeding in debt far outweigh the costs of a bankruptcy over the long term. If the debt can be paid off within 3 years, however, debt settlement may be the best option.

One of the reasons to choose settlement over bankruptcy or consolidation, another debt relief strategy, is that it can actually reduce the total amount owed as well as eliminate all interest payments. While individuals could attempt to settle debts themselves, at least in theory, one of the greatest benefits of using this method comes from the considerable clout that debt settlement companies can wield when advocating for their clients. An individual consumer has little incentive to offer a major credit card company. But a good debt consolidation firm may have thousands of accounts that they can offer to settle in one lump sum, eliminating millions of dollars in non-performing debt from the company’s books with one stroke of the virtual pen. Such incentives matter to large creditors. That’s why settlement can potentially wipe away 50 percent or more of a debtor’s principal amount.

The only downside to debt settlement is the nearly guaranteed lowering of the debtor’s credit score, as well as non-payment notes on their credit history. While this is not desirable, with good credit repair strategies, these blemishes to one’s credit score can be wiped clean within a few months to a year. These problems are small potatoes compared to the life-altering shocks that ensue after declaring bankruptcy.

People who successfully file for Chapter 7 protection can be nearly assured that they will not be able to obtain a home mortgage, auto loan or any credit card for seven to ten years. Many personal finance gurus recommend living a cash-only existence. But this is easier said than done. Inability to buy a home may cause some people to forego starting families or even marrying. And the inability to get a reliable car can have a severe negative impact on employment prospects.