I would do a refi and put the bad loans on the house before doing bankruptcy. With bankruptcy I believe if you own a home they still make you pay back you loans in a certain number of years, less the finance/interest cost. If you refi, and borrow against the collateral in your house, all of it will be the same finance % as it is on the house.
The interest rates are really good right now and its possible your payments will be the same. THEN pay extra towards your house loan each month. I would personally get a 30 yr and pay 1/2 more of whatever the house loan payment is. Some people say it isn’t worth it and they are right IF you use credit cards again. If you can live with a cash only basis for 1-2 yrs before you refi, you can live without using CC’s again.
That is the key. That and paying extra on your new loan. Call the same place you have your house loan at now AND make sure they reappraise your house, its worth the few hundreds dollars cost in the long run. I did all of the above
and only owe about 5 more years on my house.!!!! Wont be long now.
One caution, beware the impact on your FICO score if you close out the accounts. Depending on what else you already have in your credit report, and how many other cards you have, you might be better off keeping the accounts open (or maybe just one of them) to maintain your credit history, even if you don’t plan on using them. (Provided of course you’re not worried about the temptation to spend and rack up more $$ if you leave them open).
From experience, I would (now) close the account first and then pay them off, unless you are very disciplined. I say that because I paid off a card 2 months ago thinking I would shred it and call and close it but a couple weeks later, due to very good procrastination on my part, I used it again thinking I really ‘needed’ what I charged. So…now here I am with that stupid card bill all over again!
Therefore if you default, the creditors will call you but basically cannot take anything of worth.
Home equity lines mean that debt is now secured to your HOME. If you default, you lose the roof over your head. Also there are many websites where you can get a loan fast without any collateral. Anyway, better to budget wisely, pay things off (high interest first), and then change your spending habits so you don’t get into the position again.
I do understand unsecured vs. secured.. but at this point, I feel as that this debt is too large to get rid of unless I do something dramatic. I am currently working on eliminating two credit card bills, so that they will be paid off by 12/05, but then I still have over 15 grand in credit card bills… but I was also thinking that if my new payment was say 350 on helic ( now it is 750) , then if I paid more than I can get rid of the debt quicker..
I still have a lot to think about here! thanks for your advice. I truly appreciate it!
At this point, I just feel as if this amount of debt is too high for me to pay off w/o any help… I have transferred some balances to a lower rate.. and by 12/05 I will have 2 more credit card bills paid off, and another one in 6/06.. but then I still have over 15 k in debt.. w/o my car payment.. I have a lot to think about here… I truly appreciate your insights.. 🙂
I used to get them from Capital one all the time, “guaranteed low interest rates” ….yeah as long as the amount owing is paid off at the end of the month, then if you don’t pay that completely and carry a balance over then interest goes up to 18%, then eventually you are paying 28%.
I called Capital One and told them to stop sending me the “deals” in the mail, and they have.
I advise to stay away, tempting as it is. Just double check the fine print.
Does anyone have any information re: these solicitations from credit card companies, i.e., Capital One offering to dismiss interest on debt w/a collection company and build credit with them if you are willing to accept the offer. I get these all the time.
Actually the wording is as such: “If you accept the offer outlined in the enclosed insert, ownership of your account will be transferred to Capital One. Your balance will be transferred to a new Capital One Visa Account. The initial balance will be “$$$” – it will not include the “$$$” in interest and fees that have built up since your account charged off”.
It says you will earn $25 credit limit increase for every $100 of charged-off debt you repay.
How legitimate is this? Or should I ask how reasonable is this? What happens to debt once its charged off? What will my report state once this occurs? Will it say XYZ company is paid in full and show a new opened account with Capital One?
Try Scott Bilker’s website www.debtsmart.com He gives a lot of information on credit cards. And you can negotiate with your credit cards. Speak to supervisors up the chain of command and ask for fees to be waived and lower interest rates! Consumers can fight back!
One more thing. You can check out and complain to the better business bureau regarding abusive practices against the companies that have your cards www.bbb.org and also www.lawyersandsettlements.com regarding class actions against credit card companies and others.
My husband and I know exactly what you mean. The best advice I can offer at this time is to hand all your problems over to God.
Deal with what you can and don’t stress over what you can’t. Stressing yourself out is not taking care of the problems either. Hope you can use this advice and good luck with your credit.