couldn’t help but notice envision before taking out one of
there have been a few these types of loans. You get a
articles circulating around bigger house payment with the
espousing the merits of taking a borrowed money, your credit cards
home equity loan out to pay off get paid off but you don’t cut
your high interest credit card them up. Six months to a year
debt or other types of unsecured later, you have them maxed out
debt. Did you look to see that again but now you get laid off.
they are written by mortgage The cards may never be paid and
brokers? you have all the credit problems
associated with being unable to
Here is my problem with consumers pay them along with a higher
taking out these types of loans. mortgage payment. If you can’t
One, they are attempting to make the payment on it, you are
borrow their way out of debt, in more danger of losing your
which is impossible and overall, home than you were before you
just a terrible idea. Secondly, took it out. But most tragically,
they are borrowing from what is you have nothing to show for the
essentially the savings account thousands more you now owe on
of their home equity. For most your home. Thousands you may have
people, this is their single spent years paying down from the
biggest investment and financial original debt.
asset. So, this loan to pay off
unsecured debt is secured by the Even in the best case scenario,
roof over their heads which costs you are now years longer away
more each month when a loan is from paying the house off and if
taken out against it. you pay off the cards and cut
them up, you have less equity in
Here is a worst case scenario your home in exchange for items
that is all too common you might you bought with high interest
credit cards. In my opinion, it manageable level. In addition,
is a bad trade and only the you have the ability to dictate
credit card companies and the your terms to them!
companies that originate the home
equity loans win. You get stuck If you listen to the collectors,
with a higher house payment, less they will have you terrified into
money in your equity “savings thinking the only options are for
account” and unsecured creditors you to get a loan to pay them or
get paid with funds taken from to declare bankruptcy because
your most important asset. What they will have you convinced they
do you really have to show for will automatically get a judgment
borrowing more money to pay off against you and ruin your credit.
money you effectively borrowed at While a judgment certainly is a
18% to 29%? possibility and I don’t take the
threat of it lightly, it must be
What is the alternative? done through the courts and you
Negotiate with the credit card do have options to stop a
companies; that’s what! There are judgment. When you can’t make
ways to make the creditors and your house payments it is much
collections agencies stop harder to stop a foreclosure.
harassing you instantly and in Additionally, your credit can be
some cases they are trying to addressed with the credit
collect a debt from you that you reporting agencies and is not
no longer owe. Remember, you have necessarily going to cause you
the one thing they want: MONEY. problems for seven years as they
And even if you don’t have much would have you believe.
or any, you still can get them to
lower the interest rate, maybe So, take the time to think
even to 0% or knock off the late through all the ramifications of
fees and get the debt to a a home equity loan to pay off
credit cards and go to the solve or successfully live with
trouble to educate yourself on any problem you will ever have to
some of your rights along with face including credit card debt.
the protections offered to If you are committed to making a
consumers through federal laws plan, setting some goals, working
and statutes. You can get out your plan, and doing the things
from under the crushing load of that are proven to work, you will
credit card debt with a fresh end your credit card nightmare
start, without risking your home. without worrying about a
foreclosure nightmare.
Believe this! You can overcome or
About the Author:
Pat Hicks is the author of "The Negotiate Your Way to Financial Freedom from Credit Card Debt Ebook", located at http://www.Iwantafreecrediterport.com, a web site providing competitive priced credit reports and scores with no tricks or misleading advertising.
