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URL:  https://boards.fool.com/doubloon1214-quotim-looking-for-some-advice-on-28664390.aspx

Subject:  Re: I'm Drowning...advice on refinancing mortgag Date:  7/28/2010  8:41 PM
Author:  JAFO31 Number:  298675 of 312702

doubloon1214: "I'm looking for some advice on refinancing a HELOC to pay off a huge amount of credit card debt. Several years ago we paid off the mortgage ($53,000) with a HELOC for a total line of $100,000. The bank closed the remainder of the HELOC because of declining home values."

I infer that you borrowed $53k of a 100k HELOC to pay a then existing mortgage. Did you borrow any additional funds from the HELOC before it was closed? What is the current balance of the HELOC? How much is your home worth today?

"Brief description of situation is: DH has not worked in the past 5 years (he's 61) and is not/will not return to work citing health reasons/mental reasons but has not/will not go to get any kind of medical help. In addition, my eldery parents (no siblings for me) moved in with us about the time he quit working. Bad decision, didn't work out - they ended up in assisted living. Over the past 5 years, my dad passed away, mom ran out of money, and until she passed last year, I was helping her fund her living expenses which were VERY large."

I am sorry that you had all these troubles.

"Bottom line is: I'm broke. I'm still working (I'm 59), but it just isn't enough to cover all the debt I've accumulated to keep it all going. Basically I was taking cash advances to pay my mother's caregivers. The debt is now roughly $60,000, which is more than my annual income."

I infer that you mean CC debt of roughly $60k, plus the current balance of the HELOC.

"All but 3 of the cards are in my name alone."

How many cards are there?

"So, I have two choices - file Chapter 13 or try to refinance (I'm talking with a broker this week) to get out from under the $2,500 or so I pay each month to creditors, in addition to regular living expenses."

Refinancing does not get you out from under the debt; it may lessen the current payment obligations (though that is not entirely clear to me). Refinancing also turns all the unsecured debt into secured debt. I am even less clear why that seems to be a good idea, BWDIK?

"And one more very important item - DH is unaware of the extent of all this as I just can't bring myself to mouth the words to him yet."

That is extremely unfortunate. Who owns the house? If your DH also owns the house, what makes you believe that he will agree to refiance?

"My concern is that the house will not appraise high enough,"

If refinancing were a good idea, then this might be an issue.

"and that at our age should we really shouldn't be taking on more mortgage debt."

You already have the debt; it is not more debt (unless you roll the costs of refinancing into the loan). Refinancing in your situtation is mostly re-arranging the form of the debt.

I would speak to a bankrupcty attorney and a quilified debt counselor (which will be required before any bankruptcy filing anyway).

You did not post many numbers (and no budget numbers), but from what little you post, it appears to me to be relatively bleak, unless you can enlist your DH in the battle and have him create some income. Any idea what his SS will be if he starts collecting at the earliest possible age?

Best Wishes (and sorry to be so blunt),
JAFO
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