California Debt Relief Program
Debt plagues many Americans, and Californians are no exception. Fortunately, the state of California has strict laws in place to ensure that debt relief companies operate within ethical boundaries, so that consumers don’t end up in even deeper financial hardship.
The information on this website is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.
Laws that govern debt relief companies in California
Of these laws, one of the most crucial is the California Debt Settlement Services Act. This law requires debt relief companies to provide specific disclosures to consumers regarding their services and fees. Additionally, this law stipulates that debt relief companies are prohibited from charging upfront fees before providing any services.
Another important law is the Federal Trade Commission's Telemarketing Sales Rule. This rule requires debt relief companies to provide specific disclosures during telemarketing calls, including the total cost of their services, how long it will take to achieve results, and any negative consequences that may result from using their services, among other things.
The JG Wentworth Debt Relief Program
Fortunately, Californians can take comfort in knowing that the JG Wentworth Debt Relief Program abides by all of their state’s rules and regulations. But what exactly does this program entail?**
- If you are $10,000 or more in debt — JG Wentworth can help
- Eligible clients make one monthly program payment into an account they control
- While this money is accrued, we negotiate with creditors to settle the debt
- Many of our customers can pay off their debt in two to four years
- Our clients save an average of up to 51% (before fees) on their total balance*
With that in mind, let’s go over some of the most common questions consumers have when it comes to pursuing debt relief in California...
California Debt Relief FAQs
First and foremost, it’s important to note that debt collectors in California cannot try to collect any debt indefinitely. The state has a statute of limitations on how long debt collectors can attempt to collect a debt. This timeframe, which is set forth in California’s Code of Civil Procedure s 337, is four years from the date of the first missed payment to a creditor. After four years, the debt is considered “time-barred,” meaning it can no longer be legally collected. Please note that there are circumstances which can stop or “toll” the statute of limitations clock under California state law. Because of the intricacies of this process, you should consult with an independent professional before making any decisions based on this information.
It’s important to keep in mind that even though the debt cannot be legally collected after the statute of limitations has passed, it will still remain on your credit report for seven years from the first date of delinquency.
As previously mentioned, the statute of limitations on debt in California is four years from the date of missed payment. It’s important to note that this statute of limitations can vary depending on the type of debt you have. For example, the statute of limitations on oral contracts (verbal agreements not put in writing) is two years in California. The two-year limit begins from the date of the last payment or activity on the account, so if the creditor or debt collector does not file a lawsuit within two years, the debt is considered time-barred and cannot be legally collected.
It's also important to note that the statute of limitations can be extended if you make a payment on the debt after it has become time-barred. This is known as "re-aging" the debt, and it can reset the clock on the statute of limitations.
In California, community property is considered any asset or debt that was acquired during the marriage. This means that if your spouse accrued a debt before or during your marriage, you may still be responsible for it, even if you had no direct involvement.
It’s important to note that even if your spouse is the primary account holder for a debt, if it’s considered community property, you are still liable for it. This can be a tricky area of the law, so it’s important to consult with a qualified attorney if you have questions about your liability for your spouse’s debts.
When someone passes away, their debts do not simply disappear. In California, the estate of the deceased is responsible for paying off any outstanding debts. The estate includes any property or assets that the deceased owned at the time of their death. These assets will be used to pay off any outstanding debts, and if there are not enough assets to cover the debts, the remaining balance will be forgiven.
If you are concerned about leaving behind debt for your loved ones to deal with after your death, it’s important to take steps to manage your debt while you are still alive. This may include working with a debt relief company or a financial advisor to develop a plan for paying off your debts over time.
Debt collectors in California can only garnish your wages under certain circumstances. They must first obtain a court order to do so, and even then, there are limits to how much they can take. Typically, they can only garnish up to 25% of your disposable income. If you are facing a wage garnishment, it’s important to seek legal advice as soon as possible. An attorney can help you understand your rights and options for dealing with the garnishment.
The Fair Debt Collection Practices Act prohibits debt collectors from threatening consumers with imprisonment. However, it’s important to note that there are some circumstances in which you can be held in contempt of court for failing to comply with a court order related to your debt. If you are facing legal action related to your debt, it’s important to seek legal advice to understand your rights and obligations.
The bottom line
Dealing with debt can be a stressful and overwhelming experience, so it’s important to know your rights as a consumer in California. Debt relief programs, and the laws which govern them, are designed to provide relief to those struggling with debt. If this includes you, consider reaching out to a debt relief company such as JG Wentworth to get your finances back on track.
If you’re committed to starting fresh, we’re committed to helping you.
* Clients who are able to stay with the program and get all their debt settled realize approximate savings of 51% before 25% program fee.
** Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NV, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
JG Wentworth does not pay or assume any debts or provide legal, financial, tax advice, or credit repair services. You should consult with independent professionals for such advice or services. Please consult with a bankruptcy attorney for information on bankruptcy.