Overview of Credit card settlement law progress in CA
If you are a resident of California and currently planning to opt for a debt settlement programs then you better be aware of a few details first. There are no such specific protections for consumers who are dealing with debt settlement companies in California right now. The only consumer protection available in California is a statute of limitations of four years on credit card debt. However it is being expected that the proposed new laws would change the debt settlement landscape in California and will address disclosure requirements as well as fee caps. Read the rest of the article and learn more extensively about debt settlement laws in California.
Statute of Limitations
The statute of limitations for credit card debt is four years in California. In case the debtor goes into default, the credit card company can file a lawsuit to compel the debtor to repay within four years from the default date. After four years, once the statute of limitations has passed, it is up to the creditor whether he wants to try his hands on the court system to recover the losses or he likes to contact the debtor by telephone or mail to retrieve the debt amount.
Marital Property and Debt Settlement
California law considers both partners in a married couple are equally responsible to pay the debt accrued during the course of a marriage. Therefore if one spouse owes money to creditor, the creditor can legally attempt to recover the debt from both the spouses. Under this scenario its better for married partners to jointly enroll in debt settlement program and settle their outstanding debts.
California Assembly Bill 350
According to Assembly Bill 350, new restrictions would be enforced upon debt settlement companies. This bill would require debt settlement companies to apply for licensure with the state commissioner. The debt settlement companies need to disclose the adverse effect of debt settlement on consumers' credit before entering an agreement. Moreover, the debt settlement companies should attempt to limit the fee charged from the consumers. To summarize, the debt settlement companies will remain obligated to prepare a financial analysis tailored for each consumer, a good-faith estimate of the fees, charges and probable length of the program and numerous other specific contractual and disclosure provisions. This law would come into effect from January 2012 onwards.
If you have at least $10k in unsecured debt resulting from financial hardship such as loss of job or medical issue, debt settlement can be your viable option and clearly a better alternative to filing bankruptcy. Therefore, getting out of debt through a debt settlement process has become much easier and consumer’s rights are fully protected during this entire process. Thanks to the debt settlement laws in California.
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