Latest Posts
Home > Ask The Get Out of Debt Experts > Should We Get a Debt Consolidation Loan or Borrow From IRA to Payoff Credit Cards? – Christine

Should We Get a Debt Consolidation Loan or Borrow From IRA to Payoff Credit Cards? – Christine

“Dear Steve,

CC debt 20,000. Mortgage 39,000. Equity about 300,000. credit score under 500. marrried one income $51,000. 4 kids in college. Turned down from first bank for refinance with credit payoff. Currently spending about $700.00/month on CC payments.

should we continue to try to get a loan or should we take the money out of our IRA and pay CC then repay IRA 500/month. as of january we are now having to pay 260 for health insurance and we are now straped making min payments and getting no were fast!!!

Christine”

Don’t miss our free Get Out of Debt – “How To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Should We Get a Debt Consolidation Loan or Borrow From IRA to Payoff Credit Cards?   Christine

Dear Christine,

I am no fan of taking money out of protected funds, especially when you may have some difficulty in repaying them.

You said you looked at refinancing but what about a Home Equity Line of Credit (HELOC)?

I recently answered a question for a WRAL viewer in which I talked about the advantages of a HELOC and what to look for, read Should We Get a Home Equity Loan for Improvements? – Pam.

Your credit score is really low and most lenders are not going to touch you and with that much equity bankruptcy might be a problem, depending on what state you live in.

But with that much equity getting approved for a HELOC might be a lot easier. Talk to your current bank about it.

At the very least it’s an option I’d like for you to explore before dipping into the retirement funds. And if you decided to hit the retirement funds, come back and give me an update in the comments. I’d have a plan on how to deal with it.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Should We Get a Debt Consolidation Loan or Borrow From IRA to Payoff Credit Cards?   Christine
Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Share This and Spread the Word

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • christine

    Thanks for the comment. Was turn down for heloc by 2 banks. Going for the IRA withdrawal

    • http://GetOutOfDebt.org Steve Rhode

      OK, before you do that I think we need to minimize the IRA withdrawal and think about settling the debt. I have someone who is willing to help you with that for free as long as they can anonymously chronicle your DIY debt settlement experience on the site.

      If that’s OK with you, let me know. It’s a hell of an offer.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.