Refinancing Mortgage to include HELOC, what about CC?

[NBrazil]

What is the name of your state (only U.S. law)? Georgia

While comparing Mortgage Refinancing options (she said a refi is fine before or after Bankruptcy, I'm rushing to do it before while my FICO score is great) a national organization is pushing me to roll as much of my CC debt into it, ostensibly to lower monthly payments. I did not mention my plan to BK because I intend to reaffirm the home loan(s). The national organization (Quicken Loans) is "pressuring" me to roll the debt into it and wants to know right away (with the "interest rates change twice daily" line).

Okay: I was cautioned not to apply for NEW debt, but a refi is fine. Is rolling CC debt using equity "new debt." Frankly I don't want to, but it might be a good idea because, ethically, I get to pay back more by lowering the interest rate and paying over time.

But that is neither here nor there. Question remains, how does refinancing including CC debt affect the outcome of a Bankruptcy? Good or bad idea (doing it beforehand).

Asking here because my attorney is on vacation, won't be back for a week, and only then can we schedule the office visit. I'm in the filling out paperwork stage - and Quicken is kind of being like their "name."

 

[Zigner]

What is the name of your state (only U.S. law)? Georgia

While comparing Mortgage Refinancing options (she said a refi is fine before or after Bankruptcy, I'm rushing to do it before while my FICO score is great) a national organization is pushing me to roll as much of my CC debt into it, ostensibly to lower monthly payments. I did not mention my plan to BK because I intend to reaffirm the home loan(s). The national organization (Quicken Loans) is "pressuring" me to roll the debt into it and wants to know right away (with the "interest rates change twice daily" line).

Okay: I was cautioned not to apply for NEW debt, but a refi is fine. Is rolling CC debt using equity "new debt." Frankly I don't want to, but it might be a good idea because, ethically, I get to pay back more by lowering the interest rate and paying over time.

But that is neither here nor there. Question remains, how does refinancing including CC debt affect the outcome of a Bankruptcy? Good or bad idea (doing it beforehand).

Asking here because my attorney is on vacation, won't be back for a week, and only then can we schedule the office visit. I'm in the filling out paperwork stage - and Quicken is kind of being like their "name."

These are questions for your attorney. If you are being pressured to apply for MORE credit, then maybe you ought to stop answering their calls.

 

[NBrazil]

Unfortunately she won't be back for a week.

The "pressuring" I think is part of their product line IMO. As they said, it would lower monthly outflow another $250 (at the "cost" of securing the debt). Maybe it would be a way to avoid BK, I don't know.

Guess I'll have to say thanks, I'm still shopping - but boy they are pushy.

Still, I kind of wanted a feel for this as I make the crucial decisions for proceeding with the bankruptcy. No ill intent, I'm not moving. Just using the resources I still have.

 

[FlyingRon]

You've completely lost me. Great FICO and contemplating bankruptcy aren not compatible. If you're in a position that you're contemplating bankruptcy turning unsecured debt into secured debt would be foolhardy. You should talk to your bankruptcy lawyer about strategies. This isn't a LEGAL issue.

 

[quincy]

You've completely lost me. Great FICO and contemplating bankruptcy aren not compatible. If you're in a position that you're contemplating bankruptcy turning unsecured debt into secured debt would be foolhardy. You should talk to your bankruptcy lawyer about strategies. This isn't a LEGAL issue.

Following is a link to NBrazil's other recent thread, where the questions he posed here would have been better placed:

https://forum.freeadvice.com/consumer-bankruptcy-2/chapter-7-souvenirs-folk-art-religious-items-have-vpp-but-pennies-dollar-618037.html

 

[NBrazil]

You've completely lost me. Great FICO and contemplating bankruptcy aren not compatible. If you're in a position that you're contemplating bankruptcy turning unsecured debt into secured debt would be foolhardy. You should talk to your bankruptcy lawyer about strategies. This isn't a LEGAL issue.

Over the months while I considered this I've been able to pay my bills, but I knew at some point the health issues would get me. I was advised NOT to pay them. I personally feel that BK is an option only when you cannot pay them, and not until then. Within 60 days forward I won't be able to keep them current.

A co-worker also did a proactive BK when after a divorce she was paying the bills, her ex lost his job and started NOT paying his part. She immediately filed for BK before she could get behind. That is what I'm doing, before I can get behind. She went from FICO of 725 to 500 overnight, but is now back in less than 3 years.

I'm going to see how a cash out refi affects my budget, but, yeah... doesn't feel like the answer unless it will enable me to pay bills forward IF I can stay employed (see below).

It may sound flippant, but I'm dead serious. If it wasn't for health issues, and my running up CC to pay for ongoing treatments (that didn't work), I wouldn't be where I'm at.

When it looked like I might not be able to work, I was advised that should I be forced to retire (on SS only), not to BK but to default instead as my SS couldn't be touched. But I'm still working (although I could be fired any day because my performance is poor for health issues, and I would become unemployable).

So, in a nutshell - can't take the collection calls, can't pay the bills within 2 months, best take the hit now before collection calls. Damage will be substantial, of course, but less starting from where I'm at.

Obviously I'm going to discuss all the issues when I follow up and have my meeting(s).

Chronic illness is a harsh mistress.

 

[quincy]

Over the months while I considered this I've been able to pay my bills, but I knew at some point the health issues would get me. I was advised NOT to pay them. I personally feel that BK is an option only when you cannot pay them, and not until then. Within 60 days forward I won't be able to keep them current.

A co-worker also did a proactive BK when after a divorce she was paying the bills, her ex lost his job and started NOT paying his part. She immediately filed for BK before she could get behind. That is what I'm doing, before I can get behind. She went from FICO of 725 to 500 overnight, but is now back in less than 3 years.

I'm going to see how a cash out refi affects my budget, but, yeah... doesn't feel like the answer unless it will enable me to pay bills forward IF I can stay employed (see below).

It may sound flippant, but I'm dead serious. If it wasn't for health issues, and my running up CC to pay for ongoing treatments (that didn't work), I wouldn't be where I'm at.

When it looked like I might not be able to work, I was advised that should I be forced to retire (on SS only), not to BK but to default instead as my SS couldn't be touched. But I'm still working (although I could be fired any day because my performance is poor for health issues, and I would become unemployable).

So, in a nutshell - can't take the collection calls, can't pay the bills within 2 months, best take the hit now before collection calls. Damage will be substantial, of course, but less starting from where I'm at.

Obviously I'm going to discuss all the issues when I follow up and have my meeting(s).

Chronic illness is a harsh mistress.

As you were advised in your other thread, discuss all of this with your attorney, NBrazil.

 

[NBrazil]

Couple of weeks away.

Okay.

 

[despritfreya]

NB,

Refinancing to pay off debt that you can discharge is just, sorry to say, dumb. In addition, payment to an unsecured creditor in an amount that is $600 or more, within 90 days prior to filing bk is a "preference" that 1) must be disclosed and 2) will be recovered by the Chapter 7 Trustee from the unsecured creditor.

So, if you are going to file I do not think increasing your mortgage by the amount of the debt you can discharge would be in your best interest. Just refi what is owed on the home. . . period.

If the mortgage broker is pushy, find another lender.

Des.