Californians struggling with consumer debt have several ways to start tackling their debt and even become debt-free. This includes debt consolidation, debt settlement, and other local and state debt-relief programs. Whether you have student loan debt, high credit card bills, or medical debt, here are your options.
California Ranks 5th for Consumer Debt
With a population of nearly 40 million, the debt burden of many Californian residents is higher than many people think. The state ranks fifth in consumer debt across the entire country with a total debt liability of $362.87 billion. This equals out to around $33,000 per Californian or $74,000 per taxpayer.
Other California Debt Statistics
According to Experian, consumer debt has increased across the United States from 2020 to the third quarter of 2021 by 5.4%. When it comes to California, here are some key findings:
- California is ranked No. 1 in credit card debt: $116,331,485,435
- Average credit card debt per household: $6,222 (above the national average)
- Average credit utilization ratio: 32%
- Consumer debt increase from 2020 to 2021: 5%
- Student loan debt per borrower: $37,084
- Total outstanding student loan debt: $141.8 billion
- Percentage of mortgages 90+ days past due: 0.3% (down from previous years)
- Average FICO credit score in California: 721
Despite the pandemic, the average household debt in California has actually decreased slightly, especially in regard to credit card debt.
The Best Debt Consolidation Companies in California (updated 2022)
Looking for California debt relief? Here are some of the top debt consolidation companies in California.
Student Refinance, Inc.
Student Refinance, Inc. has been in business since 2014. It offers debt relief and online debt consolidation to those with high student loan debt. It primarily helps borrowers with private student loans, though it may also provide other debt-relief services.
- 3500 W Olive Ave STE 550 Burbank, CA, 91505-5524
- (800) 394-0900
- Rating: 8.58/10
Established in 2006,
Persolve, LLC (aka Account Resolution Associates) is based in Northridge, California. The business offers debt consolidation services to Californians dealing with high-interest debt. This includes credit card debt, consumer loans (ex. personal loans), and commercial loans. Persolve also helps those who are behind on auto payments. In addition to providing full-service debt relief, Persolve also focuses on litigation as a debt collection firm. The business currently has 1.09 out of 5 stars on BBB.
- 9301 Corbin Ave #1600 Northridge, CA, 91324-2508
- (818) 534-3100
- Rating: 8.69/10
Money Management International, Inc.
Money Management International, Inc. offers debt relief and consolidation services throughout the United States, including California. It was founded in 1997 and specializes in credit card debt repayment, bankruptcy, home purchases, and consumer debt management. On its main website, it also has multiple free educational resources for people who need help understanding and repairing their credit.
- 6080 Center Drive Suite 605 Los Angeles, CA, 90045
- (800) 308-2227
- Rating: 8.9/10
Mediator Debt Solutions
Mediator Debt Solutions provides debt settlement services to people with $10,000 or more in debt. To quality, you’ll need to be behind on payments and have difficulty making the minimum payments.
This California debt relief company specializes in credit card debt, vehicle repossessions, medical debt, business debt, and unsecured loans. The debt settlement process takes between 12 and 36 months, on average, and is generally successful. With Mediator Debt Solutions, you work with a specialist to create a tailored financial plan and negotiate down what you owe.
The company is BBB accredited with an A+ rating.
- 6320 Canoga Ave Fl. 15 Woodland Hills, CA, 91367-2563
- (877) 915-5446
- Rating: 9.01/10
Fidelity 1st Funding
Founded in 2005, Fidelity 1st Funding helps people with poor credit find funding for a house. It has several loan options, such as FHA loans, VA loans, conventional loans, low-credit home loans, and jumbo loans. The company also helps clients with subprime credit (500+) refinance an existing home loan.
Fidelity’s main website also has a few resources for those who need help buying a home. This includes a mortgage calculator, current real estate offerings, and realtor matching.
The company is accredited on BBB with an A- rating. However, it only has 1/5 stars, mainly due to frequent harassing calls. It does have 3.5 stars on Google.
- 67 E Live Oak Ave #103 Arcadia, CA, 91006-5256
- (626) 254-8786
- Rating: 9.34/10
With over 13 years in business, Consolidebt specializes in credit and debt counseling. It also operates as a debt relief referral company to those with high amounts of consumer debt.
- 505 N Euclid St. #615 Anaheim, CA, 92801
- (888) 777-6525
- Rating: 9.45/10
Century First Credit Solutions
Century First Credit Solutions provides credit and financial education to people to help them get a handle on their debt. The company employs certified debt counselors to provide credit card debt settlement services. It also has several debt consolidation programs for high-interest credit card debt.
- 5670 Wilshire Blvd. Suite 1800 Los Angeles, CA 90036
- (877) 218-9670
- Rating: 9.57/10
ASLR Marketing, Inc.
Based in Fullerton, California, ASLR Marketing, Inc. looks into its clients’ debt situation and works with them to see how much they can save. It also offers a debt settlement program that can resolve some consumer debt within 24 to 48 months. Like other debt settlement companies, ASLR employs certified debt consultants.
Besides debt settlement, this company also offers resources on debt consolidation, credit counseling, and bankruptcy. It does not guarantee success, nor does it make payments directly to creditors. However, it can advise consumers on these things.
Under the banner Square One Financial Group, the company has an A+ rating on BBB with 4.96/5 stars.
- 140 E Commonwealth Ave Ste. 103 Fullerton, CA 92832-1905
- (844) 499-5626
- Rating: 9.8/10
How Can I Get Help Paying My Bills in California?
California has a significant number of programs designed to help those in a financial crisis. This includes help with:
- Medical expenses
- Utility bills
- Rent or mortgage payments
- Legal assistance
- Dealing with debt collectors
Many of these programs are charitable or run by local agencies such as churches. Others are funded by the federal or state government. The state also offers a number of grant and assistance programs, such as:
- Healthy Families: Provides diagnosis, evaluation, and surgical operations for uninsured residents, or those who have low incomes.
- Homeowner Assistance Program: Offers an annual payment of up to $472 to eligible residents to help with homeownership costs. Applicants must be 62 or older, be disabled, or blind. They’ll also need to meet specific income restrictions.
- Water Bill Help: Low-income northern California residents with low to moderate incomes are eligible for discounts on their monthly water bills. One such program is the Low-Income Home Energy Assistance Program (LIHEAP).
- California Homebuyer’s Down Payment Assistance Program: Helps first-time homebuyers with their down payment and find low interest rates.
- Help with Medical Debt Collectors and Charity Health Care: California has laws to help protect patients from aggressive debt collectors. The state also provides free medical care in certain situations and to eligible individuals.
- Besides, this, the California Department of Social Services also occasionally gives out grants and other financial assistance to residents. These programs are meant to provide temporary relief. Key programs include:
- CalWORKs: Services include transportation, childcare expense coverage, and a stipend to cover work-related expenses (ex. job training).
- Cal-Learn: Helps pregnant teens and new parents attend and graduate from high school or earn an equivalent degree. The program also helps cover the costs of childcare.
- Cash Assistance: California has several programs to help low-income families meet basic needs. This includes CalWORKS, SNAP, and Cash Assistance Program for Immigrants (CAPI).
Help With Basic Necessities
The Community Services Block Grant (CSBG) was created to provide a range of services to assist low-income families and individuals get the knowledge, skills, and motivation needed to achieve self-sufficiency. It’s a federally-funded program that also offers life necessities such as shelter, food, and basic health care to those in need.
Low-Income Home Energy Assistance Program (LIHEAP)
The California State Department of Community Services & Development runs several programs, including LIHEAP and the Low-Income Weatherization Program (LIWP). These programs are designed to help reduce energy usage and costs. They can also provide direct financial aid to those struggling with high utility and heating bills.
Help With Water Bills
California’s progressive, H20 Help to Others, is a newer program made to help individuals, families, and seniors with their water bills. It’s meant specifically for low- to moderate-income homeowners living in Northern California.
Attorney fees can easily run hundreds or thousands of dollars. Unfortunately, these fees can feel impossible to manage for those already struggling with their bills.
California offers free or low-cost legal aid to eligible residents in California. This includes things like court-based self-help services and nonprofit legal aid agencies. There are also government agencies and lawyer referral services available at a low cost.
Learn more about free or discounted legal assistance in California.
Financial Assistance in a Crisis
The Salvation Army in California is one of the more prominent organizations that offers financial aid to Californians. There are, however, other resources available to families and individuals who need help with their rent, utility bills, and transportation costs (ex. gas and automobile repairs).
Food Help in a Crisis
Millions of people across the country struggle with hunger. In California alone, around 4 million people need help meeting their basic nutritional and food needs. That’s where food banks and pantries come in. They offer free food and nonperishable goods to low-income households in times of need.
Besides food banks, certain charitable programs, such as the Supplemental Nutrition Assistance Program (SNAP), also exist to help people facing hunger. These programs also provide temporary relief to those facing a financial hardship.
If you’re looking for a food bank in California, here are some options.
Los Angeles County
- 1734 East 41st St. Los Angeles, California
San Diego County
- 9850 Distribution Ave. San Diego, California
San Mateo County (San Jose area)
- 750 Curtner Ave. San Jose, California
San Francisco County
- 900 Pennsylvania Ave. San Francisco, California
Central California Food Bank
- 4010 E Amendola Dr. Fresno, California
- 3333 3rd Ave. Sacramento, California
Los Angeles County (Long Beach area)
- 1444 San Francisco Ave. Long Beach, California
Alameda County (Oakland area)
- 7900 Edgewater Dr. Oakland, California
Kern County (Bakersfield area)
- 5005 Business Park N. Bakersfield, California
Riverside County (serving Riverside and San Bernardino Counties)
Second Harvest Food Bank
- 2950-B Jefferson St. Riverside, California
For a more comprehensive list of food banks in the state, check the California Department of Social Services’ website. Another option is to go to Feeding America’s website for their list of food banks and pantries in the country.
The California Department of Financial Protection and Innovation (DFPI) is responsible for protecting consumers from potentially predatory financial service providers. This includes deferred deposit lenders (i.e., payday lenders), investment advisors, and other lenders.
The DFPI oversees the licensing process for financial service businesses. It also enforces regulations on licensees. If the Department finds that a financial service provider has violated the law, it can revoke the business’s right to operate, impose financial penalties, or file civil suits against them.
There’s also a comprehensive online database of licensed lenders in the state of California. Before borrowing from a lender, confirm they have the right to practice by running their business name through the database.
Where to Make a Complaint
The best place to file a complaint about a payday or other predatory lender is through the DFPI. Even if you’ve registered a complaint with another agency, it’s a good idea to notify the DFPI, too.
Here’s the contact information:
- Regulator: Department of Financial Protection and Innovation
- Address: Office of the Ombuds, 2101 Arena Boulevard, Sacramento, CA 95834
- Phone: (866) 275-2677 or (916) 327-7585
- Email: Ask.DFPI@dfpi.ca.gov
- Link to website: https://docqnet.dfpi.ca.gov/complaint/
Or you can submit the complaint to the Consumer Financial Protection Bureau (CFPB), a federal organization that protects individuals from predatory financial institutions, including payday lenders.
Debt Collection in California
There are several state protections in place for California residents. If you’re being harassed by debt collectors, here’s what you need to know.
The Department of Financial Protection and Innovation (DFPI) regulates and oversees California debt collection practices. It also handles licensing and complaints. The Department operates under the following:
- California Consumer Financial Protection Law – in effect since January 1, 2021
- Debt Collection Licensing Act – in effect since January 1, 2022
Both of these help protect consumers and create a more level playing field in the financial service industry.
What is the Statute of Limitations on Debt in California?
The statute of limitations is the time in which a debt collector can legally sue you for unpaid debts. In California, it is as follows:
- Four years on most types of consumer debt
- 20 years for state tax debt
- Two years on oral agreements
California’s statute of limitations begins with the first missed payment. Once the statute of limitations expires, the court can no longer order you to repay the old debt. Debt collectors also can’t garnish your wages or place a lien against your vehicle or home.
You will still legally owe these debts, though. Debt collectors can also still send letters or call to try to get you to pay.
In California, other state laws may apply to certain debts. For example, Chase, Discover, and Bank of America credit cards follow the laws of Delaware. Capital One follows the laws of Virginia. Always check with the lender or creditor to see what their exact policies are.
If You’re Being Harassed by Debt Collectors
If debt collectors are harassing you, file a complaint with all three of the following:
- California’s Attorney General office
- Federal Trade Commission (FTC)
- Consumer Financial Protection Bureau (CFPB)
Filing for Bankruptcy in California
Sometimes, bankruptcy can offer a fresh start to those suffering from extreme financial hardship. Always consult a lawyer before filing for bankruptcy. Many law firms will offer a free or low-cost consultation to determine if this is the best option for you.
There are two main types of personal bankruptcy:
- Chapter 7: This is the most common type. It costs $299 to file in California. More than 60% of non-business filings are for a Chapter 7.
- Chapter 13: Slightly less common, filing for a Chapter 13 costs $274.
In a Chapter 7, the debtor’s (person filing) assets are sold, or liquidated, to repay any creditors. After this, most remaining debt is erased. It usually takes four to six months to complete the process.
In a Chapter 13, the debtor gets to keep most of their assets, including any property like a house or car. However, they must set up a court-approved payment plan with their creditors to pay as much of their debt as possible. These plans usually last three to five years.
Those who file for bankruptcy don’t necessarily get to choose between Chapter 7 and Chapter 13. To qualify for a Chapter 7, for example, you must pass a means test. Some judges will also examine the filer’s ability to pay as part of the “totality of circumstances” test. The result can determine which bankruptcy you qualify for, regardless of income.
Here are the Means Test guidelines for California:
- 1 Member Household – $47,798.00
- 2 Member Household – $62,009.00
- 3 Member Household – $66,618.00
- 4 Member Household – $75,111.00
- 5 Member Household – $83,211.00
- 6 Member Household – $91,311.00
- 7 Member Household – $99,411.00
- 8 Member Household – $107,511.00
- 9 Member Household – $115,611.00
- 10 Member Household – $123,711.00
For a complete list of California bankruptcy resources, go here: https://www.cacb.uscourts.gov/cmecf-resources
Payday lending laws in California: Legal
- Maximum loan amount: $300 in principal and fees
- Maximum Interest Rate (APR): 460% APR on a 14-day loan for $100
- Minimum loan term: N/A
- Maximum loan term: 31 days
- Number of rollovers allowed: None
- Number of outstanding loans allowed: One
- Installment option: No
- Cooling-off period: None
- Finance charges: 15% of the face amount of the loan check
- Collection charges: $15 non-sufficient funds (NSF) fee
- Criminal action: Prohibited
Unlike in some states, the California payday loan laws are straightforward. There are clear limitations on how much a person can borrow and the finance charges. This makes it easy to determine the total cost of the loan.
Unfortunately, it’s difficult to fully regulate the payday loan industry. Because of this, some lenders can still legally charge triple-digit interest rates.
How to file for Unemployment in California
Californians who’ve recently lost their job or had their work hours drastically reduced may be eligible for unemployment benefits. You can file an unemployment claim and check your eligibility online. You can also get an estimate of how much you could receive in benefits.
The Bottom Line
California debt relief options exist for those struggling with large amounts of consumer debt. These include debt consolidation, debt settlement, credit counseling, and local and government-run agencies.
If you’re being harassed by debt collectors or dealing with suspicious lenders, contact the California Department of Financial Protection and Innovation.
California Debt Statistics
|Total Debt||$143 billion|
|Debt Per Capita||$12,823|
|Debt Per Capita Rank||6|
Source: World Population Review
California Credit Card Debt Statistics
|Average Credit Card Balance||$5,120|
|Average Credit Score||721|
|Avg Credit Card Balance Rank (1 = Highest Balance)||26|
|Avg Credit Score Rank (1=Highest Score)||25|
Mortgage Debt in California
|Mortgage Debt Per Capita||$396,229|
|Average 30 year Mortgage Rate||6.175%|
|Average 15 year Mortgage Rate||4.802%|
|Median Home Value||$790,475|
|Average Outstanding Mortgage Debt||$396,229|
|Difference Between Value and Mortgage Debt||$394,246|
|Average Homeowner FICO Score||730|
Source: Federal Reserve, Value Penguin, Experian
Payday Loan Debt in California
|Payday Loan Legal Status||Legal|
|Maximum Payday Loan Amount||300|
|Max Payday Loan Term||31 days|
|Max Payday Loan APR||460%|
Source: California Government Website
Unemployment and the Economy of California
|Poverty Rate – Population||12.58%|
|Poverty Rate – Population – Rank||26|
|Poverty Rate – Family||16.4%|
|Poverty Rate – Family – Rank||16|
|Unemployment Rate (June 2022)||4.6|
|Economic Growth Rank||3|
Source: US Census, Bureau of Labor Statistics
Student Loan Debt in California
|Percentage of Population with Student Loans||46%|
|Average Student Loan debt||$21,125|
|Average Debt of New Graduates (2017-18)||$22,585|
|Average Debt Rank||N/A|
|Percent of Graduates with Debt (2017-18)||49%|
|Percent with Debt Rank||N/A|
|Usable Institutions (BA-Granting)||61|
|Percent of Graduates at Schools with Usable Data||77%|
|Nonfederal debt of graduates, as percent of total debt||13%|
|Fall enrollment – Undergraduate total (IPEDS)||2,462,911|
|Tuition and Fees (in-district/in-state)||$10,411|
|Total Cost of Attendance (on-campus)||$35,543|
|Percent of Institutional Grants that are Need-Based||87%|
Source: Value Penguin, TICAS
Cost of Living in California
|Annual Mean Wage (All Occupations)||$66,417|
|Median Monthly Rent||$1,844|
|Value of a Dollar||$0.87|
|Cost of Living||149.9|
|Cost of Living Rank||49|
|Grocery Cost Index||105.1|
|Housing Cost Index||239.1|
|Utilities Cost Index||102.4|
|Transportation Cost Index||133.1|
|Miscellaneous Cost Index||103.7|
Source: World Population Review