California Debt Relief

Consumer Debt in California

Consumers get themselves trapped into personal debt for all sorts of reasons – in many cases no fault of their own. And with today’s super high interest rates it’s no wonder why people feel overwhelmed with the amounts they owe.

Here’s some of the biggest reasons Californians are seeking debt relief.

  • Credit cards with 25-35% interest rates
  • Private student loans
  • Medical and hospital bills
  • Income loss (especially due to COVID)
  • Medical issues causing work loss
  • Divorce or separation
  • Family expenses – birth, death, rehab, etc.

California is undoubtably one of the worst states to be in debt. The cost-of-living is estimated to be 33% higher than the national average, and typical rent prices are even higher than that.

Additionally, California has an 11-percent unemployment rate – the 3rd highest U.S. state in 2020; beaten only by Hawaii and Nevada.Ā [1]

The upside for those living California are the many consumer debt protection laws and regulations. They’re an expansions on federal laws and are more advantageous for California residents with insurmountable debt. For example, one law outlines exactly when you can refuse to pay off a credit card bill.

If you’re overburdened by debt there’s a few options available.

Credit Card Debt in California

When it comes to credit card debt, people in California are slightly above average vs. other U.S. states. In 2019 the average Californian carried $6,222 in credit card debt (with the nationwide average of $6,194). [2]

Credit Card Debt by U.S. State

State20182019
Alabama$5,557$5,672
Alaska$7,974$8,026
Arizona$5,909$6,053
Arkansas$5,298$5,327
California$5,998$6,222
Colorado$6,273$6,416
Connecticut$6,893$7,082
Delaware$6,176$6,335
District of Columbia$6,896$7,077
Florida$6,236$6,460
Georgia$6,400$6,569
Hawaii$6,441$6,673
Idaho$5,102$5,213
Illinois$6,112$6,253
Indiana$5,174$5,254
Iowa$4,685$4,774
Kansas$5,719$5,769
Kentucky$5,060$5,140
Louisiana$5,712$5,811
Maine$5,143$5,442
Maryland$6,770$6,946
Massachusetts$6,022$6,213
Michigan$5,310$5,399
Minnesota$5,367$5,489
Mississippi$4,998$5,134
Missouri$5,544$5,601
Montana$5,383$5,482
Nebraska$5,308$5,423
Nevada$6,036$6,220
New Hampshire$6,094$6,235
New Jersey$6,907$7,084
New Mexico$5,804$5,851
New York$6,309$6,491
North Carolina$5,732$5,832
North Dakota$5,162$5,265
Ohio$5,494$5,560
Oklahoma$5,756$5,848
Oregon$5,319$5,498
Pennsylvania$5,735$5,840
Rhode Island$6,042$6,177
South Carolina$5,765$5,938
South Dakota$5,131$5,235
Tennessee$5,579$5,688
Texas$6,596$6,753
Utah$5,456$5,600
Vermont$5,278$5,466
Virginia$6,822$6,969
Washington$5,998$6,156
West Virginia$5,074$5,144
Wisconsin$4,908$4,961
Wyoming$5,754$5,782

As expected, major cities like San Diego and San Francisco had higher vs. average credit card debt, but Napa had the highest debt among California cities.

Credit card debt in major cities

  • San Francisco: $6,659
  • San Diego: $6,825
  • Oxnard: $6,588
  • Napa: $7,240
  • Vallejo-Fairfield: $6,584

Consumer Debt in California

In addition to credit card debt, California residents predictably also have significant amounts of student loan debt, home mortgage, and car loan debt.

Student Loan Debt in California

As college tuition continues to rise, young people are finding themselves trapped in hundreds of thousands of dollars in debt. In many cases students graduate with over $100,000 owed.

In 2019 the average student loan debt was $35,359. Students in California were right at the average mark at $35,238 – Washington D.C. had the highest average student debt at $52,684. [3]

Student Loan Debt by U.S. State

State20182019
Alabama$33,742$35,674
Alaska$30,085$32,096
Arizona$32,705$34,740
Arkansas$30,345$32,203
California$35,238$37,468
Colorado$33,521$35,658
Connecticut$34,203$36,025
Delaware$34,000$36,098
District of Columbia$52,684$55,729
Florida$33,833$36,706
Georgia$37,644$40,692
Hawaii$33,084$35,009
Idaho$31,121$32,351
Illinois$34,821$36,975
Indiana$30,218$31,992
Iowa$27,886$29,416
Kansas$29,409$31,239
Kentucky$30,134$32,174
Louisiana$32,516$34,508
Maine$30,864$32,521
Maryland$38,496$40,630
Massachusetts$34,671$36,181
Michigan$33,243$35,307
Minnesota$30,395$32,052
Mississippi$32,431$35,478
Missouri$31,752$33,607
Montana$29,250$31,030
Nebraska$28,183$30,013
Nevada$31,629$33,863
New Hampshire$31,931$34,072
New Jersey$35,104$37,370
New Mexico$30,884$33,610
New York$36,032$37,753
North Carolina$33,959$36,257
North Dakota$27,779$29,267
Ohio$32,575$34,365
Oklahoma$29,884$31,673
Oregon$35,047$36,989
Pennsylvania$32,698$34,840
Rhode Island$31,739$33,373
South Carolina$34,515$36,552
South Dakota$27,082$28,782
Tennessee$32,788$35,016
Texas$30,677$32,441
Utah$30,244$31,671
Vermont$32,083$34,221
Virginia$34,930$36,885
Washington$31,978$34,193
West Virginia$29,931$31,222
Wisconsin$28,955$30,556
Wyoming$27,780$28,974

When compared to the rest of the country, California’s graduates tend to pay down their loans slower, but also more responsibly over the years. In general, California’s students are able to make their monthly payments and have fewer delinquencies.

Mortgage Debt in California

According to an Experian report in 2019, the average Californian owed $363,537 inĀ mortgage debt, the 2nd highest in the country – the average mortgage debt in the U.S. was $202,284 . The highest mortgage debt goes to Washington D.C. residents which have, on average, $418,555 in debt. [4]

Mortgage Debt by U.S. State

State20182019
Alabama$137,854$140,659
Alaska$221,505$223,430
Arizona$199,421$202,148
Arkansas$126,218$128,842
California$356,892$363,537
Colorado$250,003$258,026
Connecticut$225,792$225,386
Delaware$182,953$185,452
Florida$183,733$187,440
Georgia$170,848$174,275
Hawaii$337,060$344,819
Idaho$164,628$169,603
Illinois$176,001$177,150
Indiana$118,017$120,354
Iowa$128,447$131,709
Kansas$135,741$137,542
Kentucky$122,949$126,310
Louisiana$145,922$151,763
Maine$134,213$136,963
Maryland$250,713$252,583
Massachusetts$244,838$252,207
Michigan$130,558$132,523
Minnesota$171,919$175,085
Mississippi$119,078$121,608
Missouri$136,259$139,320
Montana$175,909$180,926
Nebraska$136,432$139,626
Nevada$219,989$225,095
New Hampshire$175,915$178,409
New Jersey$235,917$239,362
New Mexico$162,079$160,967
New York$230,791$236,093
North Carolina$159,133$162,366
North Dakota$159,748$162,702
Ohio$120,903$122,765
Oklahoma$131,702$134,244
Oregon$219,542$224,503
Pennsylvania$142,621$145,206
Rhode Island$181,006$185,646
South Carolina$155,673$159,359
South Dakota$148,732$150,913
Tennessee$151,692$155,844
Texas$170,521$176,736
Utah$207,090$213,771
Vermont$146,059$147,236
Virginia$239,954$242,794
Washington$254,833$262,641
Washington, D.C.$410,961$418,555
West Virginia$109,030$110,729
Wisconsin$137,574$138,935
Wyoming$183,456$184,625

The good news is that even though California is the highest, it also has one of the highest average home values. The data is also skewed because large cities such as Los Angeles and San Francisco have average home values well over $1,000,000. In a way the average for the entire state is a bit biased.

California Statute of Limitations

California actually has an advantageous statute of limitations for people and businesses that are unable to pay off their debt. For all unsecured debts (i.e. credit card debt), the California statute of limitations is 4 years (for most debt) – excludes those made with an oral contract.[5]

Oral statute of limitations in California is 2 years.

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