Should I use home equity line to pay down debts? 3 Answers as of October 20, 2010

I owe over $100,000 in credit card and medical bills. I am trying not to ruin my credit so I want to avoid bankruptcy at all costs. Should I borrow from my home equity line to pay down some of my debts? If I cannot pay my bills I am afraid the debt collectors will try to take my house.

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Law Offices of Juan Dotson
Law Offices of Juan Dotson | Juan Dotson
No, it is a bad idea to "convert" unsecured debt to secured debt (home equity) because unsecured debts are harder to collect before or after a lawsuit. Your best chances of lower your unsecured debt is to negotiate with the creditors to arrange for payments or a forbearance.
Answer Applies to: California
Replied: 10/20/2010
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Well, the only benefit you get from using your home equity line is if the interest rate you get on that is less than what you are paying (or could pay after negotiating settlements) with your other creditors. Otherwise, what you're doing is trading secured debt for unsecured debt and if you default on the payments on your home equity line, they can foreclose.
Answer Applies to: California
Replied: 10/19/2010
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
I do not advice to borrow equity from your house. Seek legal advice before you borrow against your home.
Answer Applies to: California
Replied: 10/19/2010
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