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Should I Cash Out All My Home Equity to Pay My Credit Card Debt Off? – Jim

“Dear Steve,

Steve , Thanks for your time and advice . I have read many of your articles and still not sure which way to go . I’m down by 60G and need help . My first and second come to about 157.000 and I have enough equity based on todays market to clear out my debt . No one will lend you money when you are self employed and 60 years old . I know the payment would be less than I owe on my credit cards the problem is they don’t want to talk to you when you are in a slump.

Thanks

Jim

Dear Jim,

I had the following questions that I’d like for you to answer before I can answer your question. Please post your answers in the comments section of your question. I’m looking forward to helping you for free.

  1. How do you acquire $60K in credit card debt. What was it spent on in general?
  2. How much longer will you keep working?
  3. Do you have any other assets like retirement accounts, etc?
  4. When you say you are in a slump, what do you mean?

As soon as you can post the answers to my questions above I’ll be able to help.

If any reader wants to offer advice in the comments section please feel free to participate.

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About the author

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.

2 Comments

  • Steve , Part of the 60k was to finish my addition on my house of which I completed myself so all of my equity is sweat equity, part was for poor choices of wants and needs , and part was for materials that was not repaid after the jobs were complete. #2 I plan on working another 10 years I’m in very good health . #3 No I do not have any assets or retirement accts. #4 When I say I’m in a slump I do home improvement work and I’m off by 45% this year as my customers are not spending like they did last year . I’m looking for better times in the spring . I read your book Eliminate your Debt and I’m working on a plan . I do have one collection for sale that will get me 15k by months ends also I did get a PT job in the evenings to help out . My Best Jim .

  • Terrible idea. If you have built up that much debt it is due to being unable to control your spending.

    Here’s what is likely to happen:

    You cash out your equity and pay off the debt
    You don’t stop your spending
    Your debt returns due to spending more than you make
    A few years from now you are $60k in debt, no home equity, and nothing to show for it.

    You have to fix the spending problem first. It would probably be better to SELL the house and start over than to use a home equity loan.
    .-= No Debt Plan´s last blog ..Active Trading Can Ruin Your Investment Returns =-.

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