California Credit Card Debt Settlement Attorney

Assisting Clients With Credit Card Debt in Throughout California

If you're struggling with overwhelming credit card debt, Fitzgerald & Campbell can help. Our California credit card debt lawyers, we specialize in protecting consumers from aggressive creditors, lawsuits, and wage garnishments. We understand the complexities of debt defense and settlement, working to negotiate favorable results and provide a path toward financial relief. Whether you're facing collection harassment or need legal representation in court, we are here to fight for your rights and help you regain control of your financial future.

Call Fitzgerald & Campbell today at (844) 431-3851 or contact us online to schedule a consultation with our credit card debt lawyer in California.

WHAT IS CREDIT CARD DEBT?

Credit card debt refers to the money you owe to a credit card company for purchases made using a credit card. When you use a credit card to buy something, you're essentially borrowing money from the card issuer. If you don't pay off the full amount you've borrowed by the due date, the remaining balance accrues interest, which is the cost of borrowing that money.

This debt can accumulate if you consistently carry a balance from month to month without paying it off entirely. High interest rates on unpaid balances can make it challenging to get rid of this debt, especially if only minimum payments are made, leading to a cycle where the debt continues to grow.

WHAT IS CREDIT CARD DEBT SETTLEMENT?

A credit card debt settlement is an agreement between a debtor and a creditor where the creditor agrees to accept less than the full amount owed to settle the debt. In California, this typically involves negotiating with the creditor or collection agency to reduce the total debt and avoid bankruptcy. The settlement amount is usually a lump sum that is less than the total outstanding balance. This can help individuals manage their debt more effectively, but it's important to understand that settling a debt may have implications for your credit score and could potentially impact your tax obligations.

COMMON REASONS FOR CREDIT CARD DEBT

Credit card debt can arise from various reasons, often stemming from:

• Unplanned Expenses: Sudden or unexpected costs, like medical emergencies, car repairs, or home maintenance, might force individuals to rely on credit cards when they don't have enough savings to cover these expenses.
• Living Beyond Means: Using credit cards to fund a lifestyle beyond one's income level can lead to mounting debt. Overspending on non-essential items, luxury goods, or dining out frequently without the ability to pay the balance in full at the end of the month can contribute to this.
• High-Interest Rates: Credit cards often have high interest rates, and when balances aren't paid in full monthly, the interest charges can quickly accumulate, making it harder to pay off the debt.
• Minimum Payments: Paying only the minimum amount due each month might seem manageable, but it extends the repayment period and increases the total amount paid due to accrued interest, resulting in a cycle of debt.
• Financial Hardships: Job loss, reduced income, or unexpected financial challenges can lead individuals to rely on credit cards to cover everyday expenses when other sources of income are limited or unavailable.
• Balance Transfers or Cash Advances: Utilizing balance transfers or taking out cash advances from credit cards can seem like a quick solution. However, these often come with additional fees and higher interest rates, potentially exacerbating debt issues.
• Lack of Budgeting or Financial Planning: Without a proper budget or financial plan, it's easy to lose track of spending habits and fall into the trap of accumulating debt.

HOW DO CREDITORS SEEK PAYMENT?

Creditors have several options to seek repayment for debts owed to them, particularly in the case of credit card debt. Here are some common approaches:

• Payment Requests and Reminders: Initially, creditors typically send payment reminders through emails, letters, or phone calls to remind the debtor about the outstanding balance. They may provide information about the due amount, due date, and potential consequences of non-payment.
• Late Fees and Increased Interest Rates: When payments are missed or delayed, creditors often impose late fees and might increase the interest rates on the outstanding balance. This makes the overall debt grow faster.
• Debt Collection Agencies: After a certain period of delinquency, creditors may enlist the services of third-party debt collection agencies to pursue repayment. These agencies work on behalf of the creditor to collect the debt. They might use phone calls, letters, and other means to urge payment.
• Legal Action: If the debt remains unpaid for an extended period, the creditor might take legal action. This could result in a lawsuit, leading to a court judgment against the debtor. If the court rules in favor of the creditor, they could be granted the ability to garnish wages or access other assets to repay the debt.
• Settlement Offers: In some cases, creditors might offer to settle the debt for less than the full amount owed. Debt settlement involves negotiating with the creditor to reach a mutually acceptable lower payment to consider the debt resolved.
• Credit Reporting and Impact on Credit Score: Unpaid debts can significantly impact an individual's credit score. Creditors can report late payments or delinquent accounts to credit bureaus, affecting the debtor's creditworthiness and making it harder to obtain credit in the future.

HOW DOES THE DEBT SETTLEMENT PROCESS WORK?

In California, the debt settlement process generally starts with assessing your financial situation to determine how much you can afford to pay. Once you decide to pursue a settlement, you or your representative will negotiate with the creditor or collection agency to lower the total debt. If an agreement is reached, you will need to make a lump-sum payment or a series of payments as agreed. The creditor then reports the debt as settled to credit bureaus. It’s crucial to get the settlement agreement in writing and to ensure that all terms are clear before making any payments.

ARE THERE ANY LEGAL PROTECTSION FOR DEBTS DURING SETTLEMENT NEGOTIATIONS?

Yes, California law provides certain protections for debtors during settlement negotiations. For instance, the Fair Debt Collection Practices Act (FDCPA) and the California Rosenthal Fair Debt Collection Practices Act (RFDCPA) regulate how debt collectors can interact with debtors, ensuring that they do not use unfair or deceptive practices. Additionally, California has laws that protect certain assets from being seized in debt collections. However, it’s still advisable to work with a qualified attorney or a reputable debt settlement company to ensure that your rights are fully protected throughout the process.

WHAT ARE THE POTENTIAL DRAWBACKS OF SETTLING CREDIT CARD DEBT?

Settling credit card debt in California can have several drawbacks. Firstly, settling for less than the full amount owed can negatively impact your credit score, as creditors will report the debt as “settled” rather than “paid in full.” This can affect your ability to obtain new credit in the future. Additionally, the forgiven debt may be considered taxable income by the IRS, potentially resulting in a tax liability. Furthermore, settling debts might not stop creditors from pursuing collection actions or lawsuits until a settlement is finalized.

WHAT TO DO WHEN YOU ARE UNABLE TO PAY ALL YOUR BILLS

In terms of your legal obligations, Credit Card debt is the easiest of all debt to resolve- especially with the help of an experienced team of credit card lawyers on your side. That is because these creditors have the least rights against you. In other types of debt such as taxes, student loans and secured debts like homes and autos, the creditors have more rights. For example, tax and student loan creditors generally cannot be disposed of through bankruptcy. Home and auto loan creditors can get the property back. With credit cards, other than taking you to court (which they really don’t like to do) all the credit card creditor can do is ask you to pay them.

THAT DOESN'T MEAN CREDIT CARD CREDITORS ARE PUSHOVERS

Just because credit card creditors are among the least powerful creditors does not mean they are the easiest to deal with- even with the help of a credit card debt attorney. Because they have fewer rights, credit card companies must rely on more aggressive ways of demanding payment. As a result, they are many times the ones you hear from the most. They are also the ones charging higher interest rates and pile on tons of extra fees. They are in effect the “squeaky wheel hoping to get the most grease.”

YOU MUST PRIORITIZE DEBTS WHEN YOU SETTLE THEM

In terms of priority, virtually every other type of debt should be managed first. For example, if you must choose between paying taxes or credit card, pay the taxes as the government tax collector can be much more ruthless and expensive. Paying your credit card before your car payment may lead to the loss of the car. Also, individuals have more protection from abusive collection of consumer credit card debt.

In terms of what credit cards to resolve first, an experienced attorney is essential in order to become debt free at the lowest possible cost. For example, it may actually be best to accept American Express’ 50% settlement offer before accepting a Debt Buyers 20% offer. This is because it is much more likely AmEx will sue you and win than the Debt Buyer. The Debt Buyer will still be there in the future while AmEx offer may go up!

ALWAYS REMEMBER, IT’S JUST A “CLAIM!"

Always remember that until they go to court (and win); the credit card creditor merely has a “claim” against you. As far as the law is concerned, it is merely their word against yours as to what is owed. Unless they go to court to prove it (and win), they cannot garnish your wages, put liens on your house or bank accounts or do anything to you. They can only call/mail/text/email you and report you to the credit bureaus. If you have a lawyer, they can’t even contact you.

DON’T BUY INTO THE FEAR

Always remember you have rights and that you have what they want: money. They know that bankruptcy will wipe out their claim. They know that collection lawsuits are not profitable for them. Do not pay any amounts to anyone who won’t or can’t prove what is owed. Nor should you pay anyone to “get them off your back”. Fitzgerald & Campbell can get them off your back and help you decide who, what, when, or even IF, to pay.

Contact Fitzgerald & Campbell today to schedule a consultation with our credit card debt lawyer in California.