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My credit score is poor and a lot of credit cards are pending. Should I refinance my home to consolidate the debts? Need advice. Thanks.

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i have a chance to refinance. I would rather not put credit cards
in my house loan, but pay them off one by one. And pay my current
loans off as loans not as some giant new loan

Like | Dislike | Share | Posted: Fri, 09/14/2007 - 20:18 | Post subject:

larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Dave,

I agree with you that it is always better not to put the funds of credit cards for the home loan.

Like | Dislike | Share | Posted: Fri, 09/14/2007 - 23:44 | Post subject:

wildstorm_films's picture
wildstorm_films | Joined: August 22, 2007 02:32 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I all I can say is make sure you can afford to do that. If you can't don't even go through with it. It is better to try and payoff what you can.

Like | Dislike | Share | Posted: Wed, 09/26/2007 - 21:41 | Post subject:

mtgfixit's picture
mtgfixit | Joined: April 13, 2009 02:11 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Making the decision to tackle your debt and put yourself on the path towards financial freedom is no small task. Before making any decisions you should know what your options are.

Debt Settlement - is when a third-party agent works for you to negotiate with your creditors and reduce the amount of debt that you owe. Debt settlement will put you on an aggressive payment plan that will allow you to tackle your debt in 2-5 years rather than taking more than 20 years to pay off growing balances and astronomically high interest rates that you are being charged.

Bankruptcy - might be the right solution for some individuals but can be both a financially and emotionally draining experience. A bankruptcy will remain on your credit for up to 10 years and is typically considered the last option. A bankruptcy attorney will typically require large up-front fees regardless of the outcome of bankruptcy court.

Chapter 7 - is referred to as liquidation. In liquidation, the debtor turns all of their assets over to the trustee who then sells everything and distributes the proceeds to creditors. This can be done once every 7 years.

Chapter 13 - is when the debtor presents a payment plan to the court which is reviewed by the court and your creditors. You must pay a court determined amount based on your income and the plan lasts up to 5 years. The Debtor must remain under court supervision for the life of the plan and is unable to take on new debt or sell assets without permission of the bankruptcy court.

Credit Counseling - is a program in which counselors reorganize your payment plans and give you a longer amortization period for your debt. With credit counseling you will pay back all of your debt plus interest and fees. With credit counseling, your agent is also working on behalf of the creditors and receiving payments from them, which can create a conflict of interest.

Debt Consolidation - involves taking out one loan to pay off multiple existing debts. This is done to achieve one low interest rate across all of your debts. It all sounds great, but finding a loan in this environment can be very difficult, not to mention all of the up-front fees that are built into these loans. In the past, it was common to tap the equity in your home, but given the recent mortgage crisis, this has become close to impossible in most circumstances.

Minimum Monthly Payments - making minimum monthly payments to your creditors is like being caught in the hamster wheel constantly running, but not getting anywhere. It will cost you thousands of dollars and can take up to 40 years to pay back the debt you owe. If you fall behind are unable to make your minimum payment one month or make the payment on time, your credit card company has the option to declare your account in default and raise your interest rate to over 20% in most cases.

Like | Dislike | Share | Posted: Mon, 04/13/2009 - 18:40 | Post subject:

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