credit card debt consolidation

BSNtobe2009 · Nov 17, 2006

Has anybody done this? If so, how was your experience? My parents are drowning in it and I thought that this might be a good route to go.

Speaking as a former Senior Credit Manager, it depends on how much debt they have. If they have more than 50% of what they make yearly, they are better off filing for Chapter 7 Bankruptcy.

Companies that offer unsecured credit cannot place liens against your house unless they go through the liens process, which is extremely expensive and credit card companies rarely do. When you take out a loan against your home, you instantly take that debt that is currently unsecured, and you turn it into SECURED debt, you effectively TRIPLE the interest you are paying in a 30-year ammortization, and in the end, you aren't "saving" anything, you are paying FAR MORE. If you cannot pay the monthly payment, they can file for foreclosure and the process can move very quickly from there.

Chapter 7 was designed for people like this..but if you owe 50% or less, then find a reputable debt management company (some of them are finance companies in disguised). I have included a link to one that I know personally is reputable, and do what they say they will do, because once upon a time, I used them myself when I graduated from college and made a few stupid financial mistakes.

www.careonecredit.com

nurse2btracy · Nov 17, 2006

Thanks for the info. Right now they definitely owe more than 50% of what they bring in (pension and ss). My sister and her husband will be buying my parents house in the next couple of months. After that they might be in a position to use credit counseling.

Thanks