Should I Take Out A Mortgage To Pay Off My Credit Cards?
For the last 3 years I have been helping people who are being abused by the credit card companies, or they are in a hardship and they enroll in our debt settlement program as an alternative to bankruptcy.
People ask me all the time if it is wise to take out a mortgage to pay off the credit cards. I give them my opinion, which is be careful if you do, it might not be your best choice to pay off the credit cards with a mortgage; here’s why.
Several times a month someone calls and asks if I can be of help with their debt. They took out a mortgage to pay off the credit cards and now they can’t make the mortgage payments. I have to tell them no, we can’t help you; you should not have done that because you took unsecured debt, money given to you with just your signature, and rolled it into your home, which is secured debt.
There is a big difference between secured debt & unsecured debt.
Secured debt is your home, car, or other physical things that you finance. Unsecured debt are credit cards, personal or signature loans or lines of credit. If you miss a few secured loan payments, they just take the home or car.
With a credit card, they can’t take back the movie and popcorn you charged 2 weeks ago.
So if you lost your job or missed some payments, you could loose your home! If you didn’t roll the debt, they can’t do a lot except try and get a judgment or lien against any property or wage garnishment.
However, we have secret techniques we use to get a summons to appear dismissed using their own tactics.
And if you don’t cut up the cards, you will MAX them out again in a year or 2 if you don’t change your spending habits (spending more then you earn), and you will have the mortgage and the credit card payments. Those are the people who call me when it’s too late.
If you are thinking about taking out a 2nd or 3rd mortgage to pay off credit cards, think again.
If you need help with credit card debt, give me a call between 8-5 pacific.
Christopher Winkler
DebtChemotherapy.com
Tags: credit card debt, mortgage, pay off