How can I avoid defaulting on my credit card debts to save my home?

If you have equity in your home, your home may provide the solution. Are you familiar with what happens when you consolidate debt? When you do that, you take out one large loan to pay off and replace a number of smaller loans. Done properly, consolidation offers several advantages:

• Depending on the type of type and the prevailing interest rates, you may be able to lower your interest rate
• If you stretch out how long you have to repay, you will reduce monthly payments, making it more manageable—though be careful, because this could result in you paying more over the lifetime of the loan
• It lets you simplify your debts—one monthly payment is easier to track than several or many

It can be a particularly good idea to consolidate credit card debt, since credit card debt is typically among the higher-interest debts a consumer may have. And in particular, that’s where your home comes in: if you have equity in the home, a home equity loan can be a very advantageous way to consolidate credit card debt, since (1) home equity loans (since they are secured debt) are typically at lower interest rates; and (2) the interest on a home equity loan may be tax deductible, saving you more money.

Of course, there are risks to using a home equity loan to pay off other debt, since you are potentially putting your home at risk. You may wish to consult with an experienced attorney, one who’s familiar with helping debtors, to see what your best options are.