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Southern California is a beautiful place to call home, but it’s not always the glamorous location it seems to be. There are plenty of people living in Long Beach who suffer financially, and it’s because they either live below the poverty line or they are struggling to make ends meet because of their ample credit card debt. The average resident of Long Beach carries around $4,900 in credit card debt. It’s a lot lower than the average in many other cities across the country, but it’s high considering the poverty rate in Long Beach is 27.4%. That’s much higher than the statewide poverty rate despite the average annual household income reaching $77,048.

With so many people living below the poverty line or with so much debt, it’s not uncommon for Long Beach residents to wonder if there is anything they can do for their debt situation. They want to pay it off, but they can’t if they haven’t the funds to pay it off. This leaves many people confused, worried, and watching their credit score fall rapidly as they cannot afford to pay their creditors each month. Debt settlement is an option, but you should know what you’re getting into before you commit to this kind of program.

Debt Settlement Laws

There are plenty of laws regarding debt settlement in Long Beach, and many of them protect consumers. All debt settlement companies are required to adhere to the fair credit reporting act as well as the other laws regarding consumer collections practices. State law does not require any debt collector to agree to your settlement or even enter into a settlement agreement with anyone. They can tell you no, and there is nothing you can do about that.

There is a statute of limitations on written debts in California. Your creditors have 4 years from the date you became delinquent on a debt to collect it with the option to sue. Once they let that mark go by without suing, they are no more legal ability to collect funds. They’ll still ask you to pay, call you, and mail you letters, but you’re no longer at risk for being sued, your wages being garnished, or other legal action. All you have to worry about at this point is either satisfying the debt or waiting 7 years from the first delinquent report for it to fall off your credit report.

Debt Settlement Candidates

You’re not always the best candidate for debt settlement in Long Beach. Those who are able to make their monthly debt payments are not good candidates. The reason is simple. Debt collectors want to get paid. If you are paying them without making late payments or missing payments, you don’t have much leverage with the debt collectors. They’re already getting your money and the interest you owe them, so they’re not in the market for settling your account for less than you owe.

If you’re not late with payments, don’t start making late or missing payments to your creditors. It’s too dangerous to your credit. Your negative items stay on your report for seven years, and ruining your good credit score for that long just to lower your debt a little is not a good idea.

If you are already missing payments or making late payments regularly, your credit is already damaged. Debt settlement at this point is a good thing, because it can help you get your financial life back on track. You must also want to settle only debts that are unsecured, such as medical bills and credit cards. Secured debts are not legally able to be settled.

Debt Settlement Benefits

The biggest benefit is being able to get out of debt faster. When you settle and owe less, you get to pay things off faster. You get to pay one monthly payment, you get to eliminate your numerous interest rates in exchange for one rate, and you get to improve your financial future beginning right now.

You also get to help your credit score. Your creditors agree to stop making reports of delinquent and/or missed payments to the credit bureaus, which means you get to start repairing your already damaged score. These negatives don’t go away, but they do begin to fall further back on your report every month you make payments on time.

If you want to settle your debts, now is a good time to start. The best way to find a reliable company in Long Beach is to find an attorney or settlement company with a good rating with the Better Business Bureau. Ask for references, and be sure to speak to someone about what their program entails. If you are asked to put money into the program from the beginning, it’s not a good idea. No company asks you to put money out up front, so you know to walk away if you find one that does. By educating yourself, you can help your financial future.