How to Settle Debt in California

Debt settlement can help you quickly get out of debt. The California Department of Consumer Affairs reports that nonprofit credit counseling agencies in the state will manage debt settlement plans for residents of the state. You must deposit money into an account with the counseling agency, which then will negotiate settlement agreements with your unsecured creditors, such as credit card companies. The agency will charge you a fee for the service.

Instructions

1

Find a nonprofit credit counseling agency in California that is approved by the U.S. Department of Housing and Urban Development. Choose an agency from the HUD website listing financial management as a specialty. Call the firm to confirm that it offers debt settlement plans.

2

Gather a list of credit card or revolving debts you would like to settle by referring to old billing statements or collection letters. Take your list and the billing statements and letters to your appointment with the credit counseling agency. The SmartMoney website reports that current accounts must be at least three months behind before the card company will discuss debt settlement---with you or a counseling agency.

3

Agree to the terms of a debt settlement plan and sign the paperwork allowing the credit counseling agency to represent you. Retain the right to personally approve any settlement offer before the counseling agency makes payment to the credit card company or debt collector.

4

Meet with your credit counselor regularly to monitor progress.