As interest charges soar, more and more people are struggling to keep up with their credit card and auto loan payments. For some, a single unexpected expense can plunge them into an inescapable debt cycle.

Whether it's a credit counseling program or a debt consolidation in California, there are practical ways and achievable solutions to reduce and eliminate your debt if you're struggling to make ends meet.

So, let's look at the best debt relief programs in California and other tried-and-tested debt reduction strategies to help you regain control of your finances.

Are debt relief programs legitimate?

Yes, many economic debt relief programs are credible. But before signing up, research, read reviews, and ask questions to understand the associated fees.

Pro tip: Legitimate debt relief agencies will be accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

Be wary of organizations or programs that make unrealistic promises, are not licensed in Los Angeles, or demand an upfront fee (this is illegal, according to the Federal Trade Commission (FTC)).

Companies that offer guaranteed results or overnight success are likely scammers. Run for the hills if they say they can reduce your debt by a certain percentage.

Remember, even the best organizations can’t provide such promises, and not all creditors accept debt relief payment plans. As per the FTC, average debt relief program completion rates are only around 45% - 50%.

Different debt relief options in California

Let's explore the ins and outs of California debt relief options and strategies as well as professional company recommendations so you can make an informed decision.

Debt management programs

Nonprofit credit counseling agencies offer debt management plans that help you create a budget with a set monthly payment so you can pay off high-interest debt over a period of three to five years.

A credit counselor will secure lower interest rates for you. After that, you send just one payment each month to the agency, which will then divide and distribute the funds to pay off your creditors.

Best nonprofit debt management program—Incharge Debt Solutions

If you are struggling with credit cards or other unsecured debt, InCharge Debt Solutions is a great option. So far, they have helped over three million people clear $3 billion in debt.

On top of tailored economic debt relief solutions, InCharge Debt Solutions also offers an array of free resources, such as books and financial workshops, to help achieve better financial health.

Furthermore, their "Less Than Full Balance Program" lets you pay less than what you owe on your credit cards over 36 months, after which the remaining balance is forgiven.

Debt management program fee$33 per month plus a one-time set-up fee of $75
Average settlement amountUp to $100,000 debt
Accreditations / recognitionA+ BBB rating
National Foundation for Credit Counseling (NFCC)
Council on Accreditation (COA)
Customer reviewsA 4.7 star average on over 2,000 reviews on Trustpilot

Debt consolidation

Debt consolidation is a type of financial strategy involving combining multiple debts into a single loan to minimize the overall interest paid on all debts.

For example, if you have a total of $20,000 on four cards, you can apply for a $20,000 consolidation loan and use it to clear all your credit cards. The repayment terms would depend on the lender.

Most banks, credit unions, and online lenders can provide debt consolidation loans as long as you fulfill the necessary credit score requirements.

Best lender for debt consolidation: Upgrade

Upgrade Bank's debt consolidation loans are ideal for anyone looking to pay off high-interest debts with a fixed rate and term and no early payment penalties.

With fast and easy online applications, minimal paperwork, no obligation cost, or impact on your credit score, you can get a personalized rate in minutes.

You'll appreciate the convenience of a predetermined pay-off date and potential savings. Applying for a loan with Upgrade Bank is a straightforward way to manage your debt and get back on track.

Loan amount$1,000 to $50, 000
APR8.49% - 34.99%
Accreditations / recognitionA+ BBB rating
Customer reviewsA 4.5 star average on over 39,000 reviews on Trustpilot

Debt settlement

Debt settlement is a process whereby you agree to pay your creditors a one-time lump-sum payment that is less than the full amount of debt in exchange for a complete release of your debt.

Because this involves negotiation skills, most people hire debt settlement companies to negotiate on their behalf. Note that not all card companies accept debt settlement.

Moreover, debt settlement companies charge fees - a percentage of your total debt. This process may also reduce your credit score by up to 200 points, and any forgiven debt of more than $600 is taxable.

Best debt settlement company: Pacific Debt

Based in LA, Pacific Debt Relief has helped thousands of clients settle over $300 million in debt over the past two decades. There’s no upfront cost, and their fees are performance-based.

They have been voted one of the best debt settlement companies by websites such as Best Debt Company', US News and World Reports, and Bankrate.

On average, most of their clients resolve their debts within two to four years. They offer free consultations with a certified debt counselor to all potential clients.

Average settlement amountUnspecified
Accreditations / recognitionA+ BBB rating
International Association of Professional Debt Arbitrators
Consumer Debt Relief Initiative
Customer reviewsA 4.8 stars average based on over 1,400 reviews on Trustpilot


If you are in a situation where paying off your debts is not feasible, filing for bankruptcy may be the best route. There are two types of bankruptcy: Chapter 7 and Chapter 13.

In Chapter 7, non-exempt assets, such as vacation homes, cars, artwork, and jewelry, are sold to pay off debts. Most assets, including your home, car, and personal work items, are exempt from liquidation.

In Chapter 13, you create a repayment plan where you keep your assets by making regular payments to pay down debt. This usually lasts three to five years.

Once you’ve completed making regular payments, your unsecured debts, such as credit cards, are discharged. If you keep up with payments, you can keep your house, car, and other assets.

Bankruptcy has consequences; your credit score may drop by 100-200 points. It will also stay on your credit report for seven to 10 years, making it difficult to get credit for future car or home loans.

Student loans, tax debt, and alimony will also not be discharged. If bankruptcy is your only choice, you should hire an attorney to guide you through the bankruptcy process.

Best bankruptcy law firm: Wadhwani & Shanfeld

Wadhwani & Shanfeld is a distinguished bankruptcy law firm in Los Angeles that has helped over 25,000 clients through the complexities of bankruptcy law.

Through analysis of a person’s income, property, and debts, they will decide whether Chapter 7 or Chapter 13 will provide the best outcome for you.

Overall, this bankruptcy law firm is known for its expertise, client satisfaction, and commitment to providing exceptional legal services in the field of bankruptcy law.

When to consider emergency debt relief in California

You should opt for debt management, debt settlement, or bankruptcy if:

  • You cannot repay unsecured debts within five years, even with drastic spending reductions
  • Your total unsecured debt exceeds half of your gross income

However, if you believe you can pay off your debts within five years with the budget adjustments, you may want to explore more DIY options, like debt consolidation, creditor pleas, and budgeting.

Final thoughts: Should you handle debt relief yourself?

Paying off debt yourself is possible if you stick to a budget, contact creditors for lower interest rates, and prioritize which debt to pay down first.

On the other hand, there could be times when having third-party help is the better option. For example, if you are overwhelmed by debt, objective support from an economic debt relief specialist may be the right choice.

They will help you focus on your goals and stay disciplined without getting discouraged or overwhelmed.