No. of Recommendations: 0
SoccerDad9998: "After moving those deck chairs around… BofA will still have just under $40k at 27.98%. This can still go down. But, every call has been “at this time we can not offer you…”. So, the BT game can go on and on as I try to get everything under 20% by the end of the year and then I think… what about a HELOC?

Well, a HELOC is bad. It comes from the depths of where Evil is spawn and it will cause you to loose your Foolish badge of honor. The problem is that I can not remember exactly what is so bad about a HELOC as it seems that by December I should easily be able to transfer $40k of 20%+ debt to a fixed rate of no more than 9% and maybe as low as 6% or 7%."


First problem --- many people believe that they have paid the credit cards off with the HELOC, instead of jus re-arranged the debt, and charge the credit cards back-up.

IOW, the HELOC is a quick fix that does not address the underlying problem of LAYM.

IIRC, you have been paying down for awhile now and may have more or less resolved this issue.

Second problem --- a HELOC turns unsecured debt to a CC issuer into secured debt; in fact, secured by your house, and thus puts the house at risk.

Aside - I think you mean a HEL and not a HELOC.

"Why a HELOC sucks:
1) If we do not pay then bye-bye house. But, my state laws protect the home in BK and DW's trust would step in and make payments to save the house. Not to mention that I am mostly likely to pay the mortgage and HELOC before al other debts if it came to that."


What state are you in? Lenders who have liens on the house are usually protected in bankruptcy, even in states that have pro-homestead policies (at least up to the value of the house).

"2) We could become up-side down in our house. The market is bad and if we did need to move then this would be a big problem. But, we have been in the same area for 15 yrs and I have always been able to get a new job without moving."

I forget your state of residence. Texas limits cash-out HELs and HELOCS to no more than 80% LTV (including all senior secured debt in the calculation).

"3) We could have the problem of moving around debt and then running back up the credit cards. But, if that is the case then I will probably be a fugitive, divorced and living in another country running a gambling web site (or maybe a 7th Fire – eliminate debt now / cult web site)."

IIRC, you had some spending issues with your wife. Unless she is fully with the program, or you capture and control the credit cards and accounts numbers, or you close the CC accounts, this might be a risk.

Continued good luck with your efforts.

Regards, JAFO
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