Suze Orman...what do you think?

[jetset]

That is not true. Consolidating credit card to secured mortgage debt is usually more costly in the long run, people tend to not stop using their credit cards after they do the consolidation, and consolidating limits your options with the debt in the future.

I also don't believe in spreading your credit card bill over a thirty year period, but you kinda took my statement out of context. I do believe consolidating can help a lot of people avoid bankruptcy. Other people of course will not learn their lesson.

Like I said though, what good is consolidating if you are just going to end up losing your home in the end. There are pros and cons, but when your paying 28%-35% interest on credit card balances of 130k, and your sitting on a lot of equity, and at the same time facing bankruptcy, it's hard to find a reason not to tap that equity - IF you can afford the new mortgage payment.

[HHM]

That is kind-of the point. People have an unhealthy fear of BK, and Suze does propagate that fear.

BK is a financial tool like any other, it should not be feared.

[justplaintired]

That is kind-of the point. People have an unhealthy fear of BK, and Suze does propagate that fear.

BK is a financial tool like any other, it should not be feared.

Thanks HHM, that does make me feel a little better. It's like you said Suze does make me feel bad about our situation and filing BK.

[CindyLou]

depending on how long she has lived in texas and whether a good portion of her cc debt was business related (she was self employed) she may have been able to use the homestead exemption, keep her houseam and file a chapter 7.

I was cringing as I listened to suze's advice. Not to say it ws wrong? but it shoukd have included, "make an appt with a BK attorney to explore your options"

[epiphany]

I was giving a "WHAT-IF" scenario to explain why Suze advises her listeners never to refinance to pay off credit cards, and I was using that woman as an example. The woman cannot afford her bills as it stands. She wants to refinance her home to take the cash out. IF she can't afford the new higher mortgage payment - because she is borrowing additional money - and falls behind on her mortgage payments, she will go into foreclosure.

The credit cards are unsecured debt, therefore if you stop paying them, those banks cannot come after your home. But if you cannot make your mortgage, which is secured debt, you will be foreclosed on.

I'm kinda in the middle. I think consolidating credit card debt using your mortgage is something that helps a lot of people, but what good is getting out of your credit card debt if you now can't afford the higher mortgage.

Okay. I think you were just missing the segue...doesn't make sense the way you originally pieced it together.

I did hear Suze this morning on the radio and she advocated BK over refinancing a sub prime loan.

ep